DoD's $80.6M RRK Modernization contract awarded to General Dynamics Mission Systems, Inc. shows fair value

Contract Overview

Contract Amount: $80,637,096 ($80.6M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-12-23

End Date: 2019-09-01

Contract Duration: 3,904 days

Daily Burn Rate: $20.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: Defense

Official Description: RRK MODERNIZATION

Place of Performance

Location: DEDHAM, NORFOLK County, MASSACHUSETTS, 02026

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $80.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: RRK MODERNIZATION Key points: 1. The contract demonstrates a reasonable price point given the duration and scope of the modernization effort. 2. Competition was robust, indicating a healthy market for these specialized telecommunications services. 3. The contract's long duration presents potential risks related to technological obsolescence and cost overruns. 4. Performance context is limited due to the nature of modernization projects, which are often complex and evolving. 5. This contract falls within the broader Defense sector, specifically supporting telecommunications infrastructure. 6. The absence of small business set-asides suggests larger prime contractors dominated this procurement.

Value Assessment

Rating: fair

The total award amount of $80.6 million over approximately 10.7 years suggests a moderate annual spend. Benchmarking against similar large-scale telecommunications modernization projects is challenging due to the unique nature of military systems. However, the cost-no-fee pricing structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if managed effectively. The absence of detailed cost breakdowns makes a precise value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a competitive environment, though the exact number of proposals received is not specified. A competitive process generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces. It provides assurance that the selected contractor offers the best value available in the marketplace.

Public Impact

The Department of Defense is the primary beneficiary, receiving modernized telecommunications capabilities. Services delivered include the modernization of the RRK system, crucial for defense communications. The geographic impact is likely national, supporting defense operations across various locations. Workforce implications may include specialized technical roles for installation, maintenance, and support of the modernized system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) increases the risk of technological obsolescence.
Cost-no-fee contract type shifts cost overrun risk to the contractor, but could lead to performance compromises if not monitored.
Lack of specific performance metrics makes it difficult to assess the effectiveness of the modernization.
The 'All Other Telecommunications' NAICS code is broad, potentially obscuring specific technological risks.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
General Dynamics Mission Systems, Inc. is a large, established defense contractor with significant experience.
The contract aims to modernize critical telecommunications infrastructure, which is a positive step for defense readiness.

Sector Analysis

This contract falls within the Information Technology and Defense sectors, specifically focusing on telecommunications infrastructure modernization. The market for defense telecommunications is characterized by high barriers to entry, specialized requirements, and significant government investment. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of military systems, but large-scale modernization efforts often run into tens or hundreds of millions of dollars.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of small business subcontracting requirements. This suggests that the prime contractor, General Dynamics Mission Systems, Inc., is expected to perform the majority of the work. The absence of small business participation could limit opportunities for smaller innovative firms in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the contract terms, particularly the cost-no-fee structure which places financial risk on the contractor. Transparency is facilitated by the contract's public award data, but detailed performance reports and cost breakdowns are generally not publicly available for national security reasons.

Related Government Programs

Defense Communications Systems
Military Telecommunications Modernization
Command and Control Systems
Network Infrastructure Upgrades

Risk Flags

Long contract duration may lead to technological obsolescence.
Cost-No-Fee structure could incentivize corner-cutting if not properly monitored.
Lack of detailed performance metrics hinders effectiveness assessment.
Broad NAICS code limits specificity of technological risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. RRK MODERNIZATION

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $80.6 million.

What is the period of performance?

Start: 2008-12-23. End: 2019-09-01.

What is the track record of General Dynamics Mission Systems, Inc. on similar large-scale telecommunications modernization contracts?

General Dynamics Mission Systems, Inc. (GDMS) has a long history of supporting the Department of Defense and other government agencies with complex C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems. They are known for their expertise in areas such as secure communications, network modernization, and satellite systems. While specific details on past 'RRK Modernization' type contracts are not readily available in the public domain, GDMS's extensive experience in delivering large, integrated systems suggests a strong capability to handle such projects. Their track record generally indicates successful execution of complex defense programs, though like any large contractor, they have faced scrutiny on specific projects regarding cost and schedule performance. Independent reviews and government performance ratings would provide a more granular assessment of their past performance on comparable efforts.

How does the awarded amount compare to the estimated value or initial budget for the RRK Modernization project?

The provided data indicates a final award amount of $80,637,095.73 for the RRK Modernization contract. However, information regarding the initial estimated value or budget allocated for this project is not publicly available in this dataset. Without this baseline, it is difficult to definitively state whether the final award represents a cost saving, an overrun, or a value that aligns with initial expectations. Typically, such information would be found in pre-solicitation notices or budget documents released by the Department of Defense. The fact that it was awarded under 'Full and Open Competition' with two bidders might suggest that the final price was competitive and potentially within a reasonable range of what the government anticipated, but this is speculative without explicit budget data.

What are the primary risks associated with a Cost-No-Fee (CNF) contract structure for a project of this magnitude and duration?

A Cost-No-Fee (CNF) contract structure, like the one used for the RRK Modernization, places the financial risk of cost overruns entirely on the contractor. While this can be advantageous for the government by preventing additional costs beyond the agreed-upon ceiling, it introduces specific risks. The primary concern is that the contractor, facing potential losses, might cut corners on quality, reduce scope, or delay delivery to manage expenses. This could lead to a system that does not fully meet performance requirements or is prone to future issues. For a long-duration project like this (over 10 years), the risk of the contractor becoming financially strained or even defaulting is also present, especially if unforeseen technical challenges or market shifts occur. Effective government oversight is crucial to mitigate these risks and ensure the contractor remains incentivized to deliver a functional and reliable system despite the financial structure.

What specific telecommunications capabilities does the RRK Modernization project aim to improve or replace?

The 'RRK Modernization' contract, awarded to General Dynamics Mission Systems, Inc., focuses on upgrading or replacing the Radio Relay Kit (RRK) system within the Department of Defense's telecommunications infrastructure. While the specific technical details of the RRK system and its modernization are often classified or considered sensitive operational information, it is generally understood that such systems are critical for secure voice and data communications across various military branches and operational theaters. Modernization efforts typically aim to enhance capabilities such as bandwidth, transmission security, interoperability with newer technologies, reliability, and potentially reduce the system's physical footprint or power requirements. The goal is to ensure that the DoD maintains a robust and secure communication network capable of supporting current and future operational demands in a rapidly evolving technological landscape.

How has spending on telecommunications modernization within the Department of Defense trended over the past decade?

Spending on telecommunications modernization within the Department of Defense (DoD) has been a consistent priority over the past decade, driven by the need to maintain a technological edge, enhance network security, and improve interoperability across services and with allies. While specific figures for 'telecommunications modernization' as a distinct category can fluctuate and are often embedded within broader IT or C4ISR budgets, overall DoD spending in these areas has remained substantial. Factors influencing this spending include the aging of legacy systems, the emergence of new communication technologies (e.g., 5G, satellite communications, cloud integration), and the increasing threat landscape requiring more resilient and secure networks. Periods of significant global engagement or shifts in strategic focus often lead to increased investment in communication infrastructure. The trend generally shows a sustained, high level of investment, with specific modernization programs like RRK being funded as critical components of the overall defense communications architecture.

What is the significance of the NAICS code 517919 (All Other Telecommunications) in understanding the scope of this contract?

The North American Industry Classification System (NAICS) code 517919, 'All Other Telecommunications,' is a broad category used for establishments primarily engaged in providing telecommunications services, except those classified elsewhere (like wired/wireless telecommunications carriers, satellite telecommunications, or cable/other program distribution). For the RRK Modernization contract, this NAICS code suggests that the services procured fall outside the more defined telecommunications sub-sectors. This could encompass specialized, niche, or integrated telecommunications solutions that don't fit neatly into standard industry classifications. While it indicates the general area of work, it provides limited insight into the specific technologies or services involved. This broadness might be intentional to cover a wide range of potential modernization needs or could indicate a less common type of telecommunications service critical to the DoD's operations.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 150 RUSTCRAFT RD, DEDHAM, MA, 02026

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

Financial Breakdown

Contract Ceiling: $83,975,826

Exercised Options: $82,209,701

Current Obligation: $80,637,096

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline