DoD's $32.2M BICES-X network development contract awarded to General Dynamics raises value and competition concerns

Contract Overview

Contract Amount: $32,218,905 ($32.2M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-03-01

End Date: 2022-02-28

Contract Duration: 729 days

Daily Burn Rate: $44.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: US BICES-X CORE TRUSTED NETWORK ENVIRONMENT DEVELOPMENT

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $32.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: US BICES-X CORE TRUSTED NETWORK ENVIRONMENT DEVELOPMENT Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize cost overruns. 2. Lack of competition limits price discovery and potentially inflates costs. 3. The contract's duration and cost warrant scrutiny for efficiency. 4. Performance context is limited due to the nature of development work. 5. This contract falls within the IT services sector, specifically computer systems design. 6. The award was a delivery order under a larger contract, details of which are not provided. 7. The sole-source nature of this award warrants further investigation into its necessity.

Value Assessment

Rating: questionable

Benchmarking the value of this $32.2 million contract is challenging without comparable sole-source awards for similar network development. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex development, can lead to higher costs if not managed tightly, as the contractor is reimbursed for all allowable costs plus a fixed fee. Without competitive bidding, it's difficult to assess if the fixed fee represents a fair profit margin or if the overall cost is aligned with market rates for such specialized services. The absence of a competitive process means there's no external validation of the price's reasonableness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, General Dynamics Mission Systems, Inc., was solicited. The data does not provide justification for this sole-source award, such as a specific urgent need or the unavailability of other qualified sources. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. This approach limits the government's ability to explore alternative solutions or achieve the best possible price.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competition. Without a bidding process, there is less assurance that the contract price reflects the most economical option available.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who rely on secure and advanced network environments. The contract delivers development services for the BICES-X CORE TRUSTED NETWORK ENVIRONMENT, crucial for military communications. The geographic impact is likely global, supporting DoD operations worldwide. The contract supports a specialized workforce within General Dynamics Mission Systems, Inc., in areas like network engineering and cybersecurity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award lacks competitive pressure to ensure optimal pricing.
Cost-plus-fixed-fee contract type can incentivize higher costs if not rigorously overseen.
Limited transparency on the justification for sole-source procurement.
Absence of performance metrics or outcome-based evaluations in the provided data.
The contract's duration (729 days) is substantial, increasing the risk of cost escalation over time.

Positive Signals

General Dynamics Mission Systems, Inc. is a known entity in defense contracting, suggesting potential for established expertise.
The contract addresses a critical need for secure network infrastructure within the Department of Defense.
The fixed fee component of the CPFF contract provides some level of cost predictability for the contractor's profit.
The award is a delivery order, implying it might be part of a broader, potentially more competitive, indefinite-delivery/indefinite-quantity (IDIQ) contract.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under Computer Systems Design Services (NAICS code 541512). The market for defense IT infrastructure development is characterized by high barriers to entry, specialized technical requirements, and significant government investment. Companies like General Dynamics are major players in this space, often holding large, long-term contracts. Benchmarking spending in this area is difficult without specific details on the scope and complexity of the BICES-X network environment, but it represents a critical component of national security infrastructure.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). General Dynamics Mission Systems, Inc. is a large corporation. There is no information available regarding subcontracting plans or opportunities for small businesses within this specific award. Therefore, the direct impact on the small business ecosystem from this particular contract appears minimal, and there is no indication of specific efforts to engage small businesses.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. As a Department of Defense contract, it would typically fall under the purview of the Defense Contract Management Agency (DCMA) for performance oversight and the relevant Inspector General (e.g., DoD IG) for audit and investigation. Transparency regarding the justification for the sole-source award and the specific performance metrics used to manage the Cost Plus Fixed Fee structure would be crucial for effective accountability.

Related Government Programs

DoD Network Modernization Programs
Secure Communication Systems Development
Information Technology Infrastructure Services
Defense Enterprise IT Services

Risk Flags

Sole-source award without clear justification.
Potential for cost overruns due to CPFF structure.
Lack of competitive bidding limits price reasonableness assessment.
Absence of detailed performance metrics in public data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. US BICES-X CORE TRUSTED NETWORK ENVIRONMENT DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS MISSION SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $32.2 million.

What is the period of performance?

Start: 2020-03-01. End: 2022-02-28.

What is the specific justification for awarding this contract on a sole-source basis to General Dynamics Mission Systems, Inc.?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as urgent and compelling needs, the unavailability of other sources, or when a specific technology or capability is only available from a single provider. Without this justification, it is difficult to assess whether the government adequately explored competitive options or if this was the only viable path to meet the requirement. Further investigation into the contract file or agency justifications would be necessary to understand the rationale behind bypassing the competitive bidding process.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar IT development projects within the DoD?

Cost Plus Fixed Fee (CPFF) contracts are often used for research and development or complex projects where the scope is not fully defined at the outset, allowing for flexibility. However, they carry a higher risk of cost growth compared to fixed-price contracts, as the contractor is reimbursed for all allowable costs. For IT development, fixed-price or firm-fixed-price contracts are generally preferred when requirements are well-defined, as they incentivize efficiency and cost control. The CPFF structure here suggests a high degree of uncertainty in the project's development path or a need for significant flexibility. Benchmarking against similar sole-source CPFF contracts for network development would be necessary to assess if the fee and estimated costs are reasonable.

What are the key performance indicators (KPIs) or milestones associated with this contract, and how is performance being measured?

The provided data does not specify the key performance indicators (KPIs) or milestones for this contract. For a development contract, especially one using a CPFF structure, performance is typically measured against the achievement of defined technical objectives, delivery of specific network components or functionalities, adherence to schedules, and effective cost management. Without access to the contract's statement of work (SOW) or performance work statement (PWS), it's impossible to detail the specific metrics. Robust oversight would involve regular reviews of progress against these unstated milestones and deliverables.

What is the historical spending pattern for the BICES-X CORE TRUSTED NETWORK ENVIRONMENT development, and how does this $32.2M award fit within that trend?

The provided data only details this specific $32.2 million award for the BICES-X CORE TRUSTED NETWORK ENVIRONMENT development, covering a period from March 1, 2020, to February 28, 2022. It does not offer historical spending data for this program prior to or beyond this period. Therefore, it's not possible to establish a spending trend or determine how this particular award fits into a larger historical context. To understand the pattern, one would need access to previous contract awards related to BICES-X development or sustainment.

What is the track record of General Dynamics Mission Systems, Inc. in delivering complex IT network development projects for the Department of Defense?

General Dynamics Mission Systems, Inc. (GDMS) has a significant track record in providing complex IT and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) solutions to the Department of Defense and other government agencies. They are a major defense contractor involved in various aspects of network infrastructure, cybersecurity, and systems integration. While their overall experience is extensive, the success and value of specific projects can vary. A detailed review of GDMS's past performance on similar sole-source, CPFF contracts for network development would be needed to fully assess their performance in this specific context.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 8201 E MCDOWELL ROAD, SCOTTSDALE, AZ, 85257

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,266,065

Exercised Options: $33,266,065

Current Obligation: $32,218,905

Actual Outlays: $13,779,905

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA714618D0360

IDV Type: IDC

Timeline