DoD awards $15.4M for KIV-78 modification, a communications equipment manufacturing contract

Contract Overview

Contract Amount: $15,405,167 ($15.4M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-04-02

End Date: 2026-03-31

Contract Duration: 2,189 days

Daily Burn Rate: $7.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: KIV-78 MODIFICATION

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $15.4 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: KIV-78 MODIFICATION Key points: 1. Contract awarded to General Dynamics Mission Systems, Inc. for modification of KIV-78 equipment. 2. The contract has a duration of 2189 days, spanning from April 2020 to March 2026. 3. This is a Delivery Order under a larger contract, indicating a phased approach to procurement. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. The procurement was conducted under full and open competition, suggesting a competitive bidding process. 6. The contract is not set aside for small businesses, nor does it indicate specific subcontracting goals. 7. The primary place of performance is Arizona, a state with a significant defense industrial base.

Value Assessment

Rating: fair

The contract value of $15.4 million for a modification of existing equipment over nearly six years appears reasonable, but a direct comparison is difficult without knowing the specific modifications and their scope. The Cost Plus Fixed Fee (CPFF) contract type introduces risk, as the final cost is not fixed upfront and depends on actual costs incurred plus a predetermined fee. Benchmarking this specific modification's value against similar upgrades or new procurements for cryptographic equipment would provide a clearer picture of value for money. Without more granular data on the KIV-78's capabilities and the nature of the modification, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding environment, which typically leads to better price discovery and potentially more competitive pricing for the government. The fact that it was competed openly implies that the government sought the best value from the market. However, the number of bidders is not specified, which would provide further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The Department of the Air Force benefits from this contract through the modification and potential enhancement of its KIV-78 cryptographic equipment. This modification is crucial for maintaining the security and operational effectiveness of communication systems used by the Air Force. The primary beneficiaries are the military personnel who rely on secure communication channels for mission success. The contract's place of performance in Arizona may have implications for local employment within the defense manufacturing sector. The upgrade ensures that communication security standards remain current with evolving threats and technological advancements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
Lack of specific details on the modification scope makes it difficult to assess true value for money.
No indication of small business participation or subcontracting goals may limit opportunities for smaller enterprises.

Positive Signals

Awarded under full and open competition, suggesting a competitive process and potential for good pricing.
Long contract duration (2189 days) indicates a significant, ongoing need for the KIV-78 modification.
Modification of cryptographic equipment is essential for maintaining national security and secure communications.

Sector Analysis

The defense communications sector is characterized by high technological requirements and stringent security protocols. Contracts for cryptographic equipment and modifications are critical for maintaining secure communication networks essential for military operations. The market for such specialized equipment is often dominated by a few key defense contractors with the necessary expertise and security clearances. Spending in this area is driven by the need to stay ahead of evolving cyber threats and to ensure interoperability across various defense platforms. Comparable spending benchmarks would typically involve other modifications or upgrades to secure communication systems within the DoD.

Small Business Impact

This contract does not appear to have been set aside for small businesses, nor is there explicit information regarding small business subcontracting goals. This suggests that the primary award went to a large business, General Dynamics Mission Systems, Inc. While large prime contractors often engage small businesses as subcontractors, the absence of specific set-aside provisions or reporting requirements means the direct impact on the small business ecosystem is not immediately clear from this data alone. Further analysis would be needed to determine if subcontracting opportunities were pursued.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Air Force contracting and program management offices. As a Delivery Order under a larger contract, it likely inherits existing oversight mechanisms. Transparency is generally maintained through contract databases like FPDS, which provide basic award details. Specific accountability measures would be detailed in the contract's terms and conditions, including performance metrics and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

KIV-78 Cryptographic Equipment
Secure Communications Systems
Defense Communications Modernization
Air Force Information Technology Contracts
General Dynamics Mission Systems Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Lack of specific performance metrics or outcome data makes value assessment challenging.
Limited information on small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.4 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. KIV-78 MODIFICATION

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 $15.4 million.

What is the period of performance?

Start: 2020-04-02. End: 2026-03-31.

What is the specific nature of the KIV-78 modification, and what are the expected performance improvements?

The provided data does not detail the specific nature of the KIV-78 modification or the expected performance improvements. The KIV-78 is a family of cryptographic equipment used for secure voice and data communications. Modifications typically aim to enhance security features, improve compatibility with newer systems, increase data throughput, or extend the operational lifespan of the equipment. Without access to the contract's statement of work (SOW) or technical exhibits, it is impossible to ascertain the precise technical objectives or the anticipated benefits of this particular modification. Further investigation into the contract documentation would be required to understand the technical scope and expected outcomes.

How does the $15.4 million contract value compare to previous modifications or procurements of KIV-78 equipment?

A direct comparison of the $15.4 million contract value to previous modifications or procurements of KIV-78 equipment is not feasible with the provided data alone. Historical spending patterns for this specific modification or similar upgrades would need to be analyzed. Factors such as inflation, technological advancements, changes in scope, and market conditions can significantly influence contract values over time. To conduct a meaningful comparison, one would need to access historical contract databases (e.g., FPDS) and filter for similar KIV-78 related actions, noting the award dates, contract types, and scopes of work to establish a relevant benchmark. The current data only provides a snapshot of this single delivery order.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of modification?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for this modification is the potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. If the contractor's costs exceed initial estimates, the government bears the burden of these increased expenses, while the contractor's fee remains unchanged. This can lead to the final contract price being higher than anticipated. Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are crucial to mitigate these risks. Without stringent management, CPFF contracts can be less cost-effective than fixed-price agreements.

What is the track record of General Dynamics Mission Systems, Inc. in delivering similar cryptographic equipment modifications?

General Dynamics Mission Systems, Inc. (GDMS) is a major defense contractor with extensive experience in developing and supporting secure communication systems, including cryptographic equipment. They have a long history of working with the Department of Defense and other government agencies on complex technology programs. While specific details on their track record for KIV-78 modifications are not provided in this data, GDMS is generally recognized for its capabilities in this domain. Assessing their performance on this specific contract would require reviewing past performance evaluations, delivery records, and any reported issues or successes on similar projects within their portfolio.

What is the significance of this contract within the broader context of Air Force communication security modernization efforts?

This contract for the modification of KIV-78 equipment is significant as it contributes to the ongoing efforts of the Air Force to maintain and enhance the security of its communication networks. Cryptographic modernization is a continuous process driven by evolving threats and technological advancements. Upgrading existing equipment like the KIV-78 ensures that the Air Force can continue to transmit sensitive information securely, protecting critical data and operational integrity. Such modifications are essential components of a larger strategy to ensure resilient and secure command and control capabilities across the service.

Given the full and open competition, how many bids were likely received, and what does this imply for price competition?

The data indicates 'FULL AND OPEN COMPETITION' but does not specify the number of bids received. Full and open competition means that any responsible source could submit an offer. The implication for price competition is generally positive, as a larger pool of potential bidders typically leads to more competitive pricing. However, the actual intensity of price competition depends on the number of bids submitted and the capabilities of the bidding firms. If only a few firms could meet the technical requirements, the competition might be less robust than if many firms were capable. Without the number of bidders, it's difficult to definitively assess the degree of price competition achieved.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA830720R0007

Offers Received: 1

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: $15,417,652

Exercised Options: $15,417,652

Current Obligation: $15,405,167

Actual Outlays: $534,723

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $34,238

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA830717D0006

IDV Type: IDC

Timeline