DoD's $34.8M IT contract for battlefield intelligence systems awarded to General Dynamics without competition

Contract Overview

Contract Amount: $34,859,187 ($34.9M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-02-25

End Date: 2024-02-29

Contract Duration: 734 days

Daily Burn Rate: $47.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: UNITED STATES BATTLEFIELD INFORMATION COLLECTION & EXPLOITATION SYSTEM EXTENDED TRUSTED NETWORK ENVIRONMENT DEVELOPMENT TASK ORDER

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $34.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: UNITED STATES BATTLEFIELD INFORMATION COLLECTION & EXPLOITATION SYSTEM EXTENDED TRUSTED NETWORK ENVIRONMENT DEVELOPMENT TASK ORDER Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The sole-source award limits price discovery and potentially reduces competitive pressure on the contractor. 3. A long performance period of 734 days suggests a complex and potentially evolving requirement. 4. The contract is for development tasks, indicating a focus on building or enhancing existing systems. 5. The geographic location of the contractor in Arizona may have implications for local economic impact. 6. The absence of small business set-aside suggests larger prime contractors are expected to manage this effort.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific IT development focus. The cost-plus-fixed-fee (CPFF) pricing structure means the government pays the contractor's allowable costs plus a fixed fee, which can be less predictable than fixed-price contracts. Without competitive bids, it's difficult to ascertain if the fixed fee represents a fair profit margin or if the overall costs are optimized. Further analysis would require comparing the labor rates and overhead applied to similar development efforts within the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means the government did not benefit from a bidding process that could have driven down prices or spurred innovation from a wider range of companies.

Taxpayer Impact: Taxpayers may not be receiving the best possible value as the absence of competition limits the government's ability to negotiate lower prices or secure more favorable terms.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, through enhanced battlefield information collection and exploitation capabilities. The contract supports the development and enhancement of trusted network environments for critical intelligence data. This initiative directly impacts military operations by improving situational awareness and decision-making on the battlefield. The contract may indirectly benefit the defense technology workforce employed by General Dynamics and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost-plus-fixed-fee contract type introduces risk of cost overruns if not closely monitored.
Lack of transparency in the sole-source justification process can obscure the rationale for not competing.
Extended performance period may indicate evolving requirements or potential for scope creep.
Specific details on performance metrics and deliverables are not readily available for independent assessment.

Positive Signals

Awarded to a known defense contractor with established experience in complex systems.
Focus on 'trusted network environment' suggests adherence to stringent security and reliability standards.
Development task order implies investment in critical national security capabilities.
Contract duration allows for thorough development and integration of complex systems.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on defense-related software and systems design. The market for defense IT solutions is substantial, driven by the continuous need for advanced intelligence, surveillance, and reconnaissance (ISR) capabilities. Comparable spending benchmarks would involve analyzing other development contracts for similar battlefield management or intelligence exploitation systems awarded by the DoD, though direct comparisons are difficult due to the specialized nature of this requirement and its sole-source award.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. As a sole-source award to a large prime contractor, General Dynamics Mission Systems, it is likely that any subcontracting opportunities would be managed by the prime. The extent to which small businesses will participate as subcontractors is not specified, but large sole-source contracts often involve significant subcontracting to specialized firms.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Given the CPFF structure, rigorous oversight of incurred costs, progress, and adherence to the fixed fee is crucial. Transparency is limited by the sole-source nature, but contract performance reports and milestone reviews would be key accountability measures. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Battlefield Management Systems
Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Command and Control (C2) Systems
Defense Information Technology Modernization Programs
Tactical Data Links
Network-Centric Warfare Systems

Risk Flags

Sole-source award
Cost-plus contract type
Extended performance period
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. UNITED STATES BATTLEFIELD INFORMATION COLLECTION & EXPLOITATION SYSTEM EXTENDED TRUSTED NETWORK ENVIRONMENT DEVELOPMENT TASK ORDER

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 $34.9 million.

What is the period of performance?

Start: 2022-02-25. End: 2024-02-29.

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

The provided data indicates the contract was awarded as 'NOT COMPETED'. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations (FAR). Common reasons include the existence of unique capabilities or proprietary technology held by only one source, urgent and compelling needs where competition is not feasible, or when a specific system is only available from a particular contractor. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), the precise rationale remains unknown. This lack of competition means the government did not explore potential alternatives or leverage market competition to achieve better pricing or terms.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing structures in terms of risk and value for the government?

The CPFF contract type involves the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex projects where the scope is not well-defined, making fixed-price contracts difficult. For the government, the primary risk is cost overrun, as the contractor is incentivized to incur costs to complete the work, and the fee is fixed regardless of the final cost. However, it can facilitate innovation and flexibility. Compared to fixed-price contracts, CPFF offers less cost certainty but potentially better adaptability. Compared to Cost Plus Incentive Fee (CPIF), the fee is not adjusted based on performance targets, potentially reducing the contractor's incentive to control costs beyond what is necessary to meet the fixed fee.

What are the potential performance risks associated with a 734-day development task order for battlefield information systems?

A 734-day (approximately two-year) performance period for a development task order presents several potential risks. Firstly, the technology landscape in battlefield information systems can evolve rapidly; by the time development is complete, the system might be based on outdated technology or require significant updates. Secondly, requirements can change during such a long development cycle, leading to scope creep, cost increases, and schedule delays if not managed effectively. Thirdly, maintaining contractor focus and performance over an extended period can be challenging. Finally, the complexity of integrating new systems into existing battlefield networks introduces technical risks that may not be fully apparent at the outset.

What is the historical spending pattern for similar 'Computer Systems Design Services' (NAICS 541512) within the Department of Defense?

The Department of Defense is a significant spender on Computer Systems Design Services (NAICS 541512), reflecting the critical role of IT in modern military operations. Historical spending in this category is substantial, often running into billions of dollars annually across various branches and agencies. This includes services for system design, integration, development, and maintenance. The DoD frequently awards large contracts for complex IT solutions, including those for intelligence, command and control, and cybersecurity. Analyzing specific historical spending patterns for similar 'development task orders' within the DoD would require access to detailed contract databases, allowing for comparison of contract values, durations, and performance outcomes for systems with comparable objectives and complexity.

What are the implications of awarding a development task order without a small business set-aside?

Awarding a development task order without a small business set-aside typically means the contract is not specifically reserved for small businesses. In this case, the contract was awarded sole-source to General Dynamics Mission Systems, a large business. This implies that the primary contractor is expected to possess the necessary capabilities and resources to execute the work. While the prime contractor may engage small businesses as subcontractors, the absence of a set-aside means there's no direct government mandate for small business participation at the prime contract level. This can limit opportunities for small businesses to directly compete for and win prime contracts in this specific area, potentially impacting their growth and revenue streams.

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 › IT AND TELECOM - APLLICATIONS

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: Wico Limited

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: $37,926,978

Exercised Options: $34,891,395

Current Obligation: $34,859,187

Actual Outlays: $26,157,339

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA714618D0360

IDV Type: IDC

Timeline