DoD awards $59.6M for cryptographic units, with General Dynamics Mission Systems securing the contract

Contract Overview

Contract Amount: $59,585,137 ($59.6M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-06-30

End Date: 2026-05-31

Contract Duration: 1,796 days

Daily Burn Rate: $33.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MEDIUM/LARGESAT COMMON SOLUTIONS END CRYPTOGRAPHIC UNITS

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $59.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: MEDIUM/LARGESAT COMMON SOLUTIONS END CRYPTOGRAPHIC UNITS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is for a significant duration, spanning over 1700 days, indicating a long-term need. 3. Firm Fixed Price contract type helps mitigate cost overrun risks for the government. 4. The specific product category, 'Other Communications Equipment Manufacturing,' points to specialized hardware. 5. Awarded by the Department of the Air Force, aligning with defense communication needs. 6. The contract value is substantial, reflecting the importance and scale of the cryptographic units required.

Value Assessment

Rating: good

The contract value of $59.6 million for cryptographic units appears reasonable given the duration and the nature of defense-grade equipment. Benchmarking against similar contracts for specialized communication hardware is challenging without more specific technical details. However, the firm fixed-price structure provides cost certainty. The award to a large, established defense contractor like General Dynamics Mission Systems suggests a focus on reliability and proven performance, which can justify the investment.

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 multiple bidders, though not explicitly stated, is implied by this competition type. A competitive process generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value by encouraging multiple vendors to offer their most competitive pricing and solutions for essential cryptographic equipment.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the Department of Defense requiring secure communication capabilities. The contract delivers critical cryptographic units essential for maintaining secure data transmission and communication networks. The geographic impact is primarily within the United States, with potential deployment to various operational theaters. Workforce implications may include specialized manufacturing, engineering, and logistics roles within General Dynamics Mission Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the cryptographic units are highly proprietary or integrated into existing systems.
Long contract duration could lead to obsolescence if technology evolves rapidly.
Dependence on a single large contractor for critical security hardware.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm Fixed Price contract type provides cost predictability.
General Dynamics Mission Systems is a well-established defense contractor with a track record in complex systems.
The contract addresses a critical national security need for secure communications.

Sector Analysis

The 'Other Communications Equipment Manufacturing' sector encompasses a wide range of specialized electronic equipment used for communication. This contract falls within the broader defense industrial base, which relies on advanced technology for secure and reliable operations. Spending in this area is often driven by evolving threats and the need for state-of-the-art encryption and communication security. Comparable spending benchmarks are difficult without knowing the exact specifications of the cryptographic units, but defense spending on secure communications is consistently high.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major defense contractor, there may be opportunities for small businesses to participate as subcontractors. However, the primary awardee is a large corporation, suggesting direct small business participation might be limited unless specifically mandated or pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The firm fixed-price nature of the contract simplifies some aspects of financial oversight. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Cryptographic Equipment Procurement
Secure Network Infrastructure
Tactical Communication Systems
National Security Technology

Risk Flags

Long contract duration may lead to technology obsolescence.
Potential for vendor lock-in with specialized cryptographic hardware.
Dependence on a single large contractor for critical security components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. MEDIUM/LARGESAT COMMON SOLUTIONS END CRYPTOGRAPHIC UNITS

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 $59.6 million.

What is the period of performance?

Start: 2021-06-30. End: 2026-05-31.

What is the specific type and technical capability of the cryptographic units being procured?

The provided data classifies the procurement under NAICS code 334290, 'Other Communications Equipment Manufacturing,' and the description mentions 'SAT COMMON SOLUTIONS END CRYPTOGRAPHIC UNITS.' This suggests the units are likely related to satellite communications and are designed for end-to-end encryption. However, specific technical specifications, such as encryption algorithms supported, data throughput, form factor, environmental hardening, and interoperability standards, are not detailed in the provided summary. Understanding these technical aspects is crucial for assessing the units' suitability for current and future operational needs and for comparing their capabilities against market alternatives.

How does the unit cost of these cryptographic units compare to similar commercially available or government-procured items?

Without specific unit counts or detailed technical specifications, a precise per-unit cost comparison is not feasible. The total contract value is $59.6 million over approximately 1796 days. If we assume a significant number of units are procured, the average cost per unit could range widely. General Dynamics Mission Systems is a reputable defense contractor, and defense-grade cryptographic equipment often carries a premium due to stringent security certifications, ruggedization, and specialized features not found in commercial off-the-shelf (COTS) products. A detailed analysis would require knowing the quantity and exact specifications to benchmark against other government contracts or high-security commercial offerings.

What is the track record of General Dynamics Mission Systems in delivering similar cryptographic or secure communication systems?

General Dynamics Mission Systems (GDMS) has a long-standing and extensive track record in providing complex defense systems, including secure communication solutions, command and control systems, and electronic warfare capabilities. They are a major prime contractor for the U.S. military and allied nations. Their experience encompasses the design, development, manufacturing, and integration of secure hardware and software, often involving cryptographic technologies. GDMS has consistently been awarded large, critical defense contracts, indicating a perceived capability and reliability by the Department of Defense to handle sensitive and complex procurements like this one.

What are the potential risks associated with the long duration of this contract (over 4 years)?

The contract duration of approximately 1796 days (nearly 5 years) presents several potential risks. Firstly, technological obsolescence is a significant concern; cryptographic standards and threats evolve rapidly. The technology procured today might be less effective or vulnerable by the end of the contract period. Secondly, there's a risk of vendor lock-in, where the government becomes heavily reliant on GDMS for these specific units, potentially limiting future flexibility or the ability to adopt newer, more cost-effective solutions. Lastly, long-term contracts can sometimes mask inefficiencies or reduce the urgency for the contractor to innovate if they are guaranteed revenue over an extended period, although the firm fixed-price nature mitigates some financial risk.

How does this spending compare to historical trends in cryptographic equipment procurement by the Department of Defense?

The Department of Defense (DoD) consistently invests heavily in secure communications and cryptographic technologies due to the nature of its global operations and the constant threat landscape. A $59.6 million contract for cryptographic units is substantial but likely falls within the typical range of spending for such critical systems, especially when considering large-scale procurements or multi-year delivery orders. Historical data would show significant and ongoing investment in this area, often fluctuating based on modernization programs, new threat assessments, and specific platform integration needs. This contract appears to be part of that continuous effort to maintain secure communication capabilities.

What are the implications of this contract being a Firm Fixed Price (FFP) award?

A Firm Fixed Price (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience. This is generally advantageous for the government as it provides the highest level of cost certainty and shifts the risk of cost overruns entirely to the contractor. For GDMS, it means they must accurately estimate their costs for design, manufacturing, and delivery to remain profitable. This contract structure incentivizes the contractor to control costs and perform efficiently to maximize their profit margin, while the government knows the final price upfront, assuming no contract modifications.

Industry Classification

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

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $67,048,405

Exercised Options: $67,048,405

Current Obligation: $59,585,137

Subaward Activity

Number of Subawards: 50

Total Subaward Amount: $15,685,164

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