DoD's $33.8M contract for data encryption systems awarded to General Dynamics Mission Systems

Contract Overview

Contract Amount: $33,859,872 ($33.9M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-06-15

End Date: 2026-03-31

Contract Duration: 1,385 days

Daily Burn Rate: $24.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CLASSIFIED DATA AT REST INLINE MEDIA ENCRYPTOR

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $33.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: CLASSIFIED DATA AT REST INLINE MEDIA ENCRYPTOR Key points: 1. Value for money appears fair given the specialized nature of classified data encryption. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with performance dependent on advanced technology integration. 4. Performance context is tied to the Department of the Air Force's need for secure data handling. 5. Sector positioning is within defense IT, a critical area for national security. 6. The contract duration of over three years suggests a significant, ongoing requirement.

Value Assessment

Rating: fair

Benchmarking the value of this specific classified data encryption system is challenging due to its specialized nature and the limited public data available for comparable systems. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight to manage costs effectively. Without detailed cost breakdowns or comparisons to similar classified systems, a precise value-for-money assessment is difficult, but the award to a known defense contractor suggests a baseline level of expected performance and quality.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a degree of competition, which is generally positive for price discovery. However, the specialized nature of classified data encryption may limit the pool of qualified bidders, potentially impacting the intensity of the competition.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, is generally favorable for taxpayers as it provides a mechanism for competitive pricing and encourages contractors to offer their best terms.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving advanced data encryption capabilities. Services delivered include the manufacturing and potential integration of classified data encryption hardware. The geographic impact is primarily within the United States, with potential deployment to various Air Force installations. Workforce implications include specialized roles in engineering, manufacturing, and cybersecurity within General Dynamics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
Dependence on a single contractor for a critical national security technology.
Ensuring the technology remains cutting-edge throughout the contract lifecycle.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Contract awarded to a reputable defense contractor with a track record in complex systems.
Clear end date provides a defined period for delivery and performance.

Sector Analysis

The defense IT sector is characterized by high demand for secure and advanced technological solutions, particularly for data protection and cybersecurity. Spending in this area is substantial, driven by evolving threats and the need to maintain technological superiority. This contract for classified data encryption fits within the broader category of defense communications and information assurance, a critical sub-sector where specialized manufacturers like General Dynamics play a key role.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the specialized nature of classified data encryption technology and the prime contractor being a large defense firm, the direct impact on small businesses may be limited unless they are involved as subcontractors. Further analysis would be needed to determine subcontracting opportunities and their adherence to small business utilization goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency may be limited due to the classified nature of the technology, but internal audits and performance reviews by the agency are expected. The Inspector General's office would have jurisdiction for investigating fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Cybersecurity Technology Procurement
Information Assurance Equipment
Classified Systems Manufacturing

Risk Flags

Potential for cost overruns due to CPFF contract type.
Security risks associated with classified data handling.
Technological obsolescence if not updated.
Dependence on a single supplier for critical technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. CLASSIFIED DATA AT REST INLINE MEDIA ENCRYPTOR

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 $33.9 million.

What is the period of performance?

Start: 2022-06-15. End: 2026-03-31.

What is the specific type of classified data this encryptor is designed to protect, and what are the security standards it must meet?

The provided data does not specify the exact classification level or the specific security standards (e.g., TEMPEST, FIPS, specific NSA requirements) the 'CLASSIFIED DATA AT REST INLINE MEDIA ENCRYPTOR' must meet. However, given it's for the Department of Defense and designated for classified data, it is expected to adhere to stringent government security protocols, likely involving National Security Agency (NSA) certifications and compliance with directives like the Cryptographic Module Validation Program (CMVP) for cryptographic modules. The 'inline media' aspect suggests it protects data stored on or transmitted through various media types, requiring robust protection against unauthorized access and tampering.

How does the pricing structure (Cost Plus Fixed Fee) compare to other similar classified encryption system contracts?

Cost Plus Fixed Fee (CPFF) contracts are common in defense procurement for complex systems where the final costs are difficult to estimate precisely at the outset. This structure involves the government reimbursing the contractor for allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility for the government if requirements change but carries a higher risk of cost overruns if not managed diligently. Benchmarking against similar classified encryption systems is difficult due to proprietary information and the niche market. However, the fixed fee component aims to incentivize efficiency by capping the contractor's profit regardless of cost escalation beyond a certain point, though the overall cost is still variable.

What is General Dynamics Mission Systems' track record with similar classified technology contracts for the Department of Defense?

General Dynamics Mission Systems (GDMS) is a well-established defense contractor with extensive experience in developing and delivering complex, secure communication and information systems for the U.S. military, including the Department of Defense. They have a history of working on classified programs and providing advanced encryption, cybersecurity, and secure networking solutions. Their portfolio includes a range of products and services designed to meet stringent government security requirements. While specific details of past classified contracts are not publicly available, GDMS's long-standing presence and significant role in defense technology suggest a strong capability and a generally positive track record in handling such sensitive projects.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators for this contract would likely focus on technical performance, reliability, security compliance, and delivery timelines. Specific KPIs might include data encryption/decryption speed, successful integration with existing Air Force networks, uptime and availability of the encryption service, adherence to security protocols and successful completion of security audits, and timely delivery of hardware and associated documentation. The fixed fee component of the contract may also tie performance bonuses or penalties to the achievement of certain critical KPIs, ensuring the contractor is incentivized to meet or exceed expectations.

What is the historical spending trend for similar 'Other Communications Equipment Manufacturing' contracts within the Department of the Air Force?

Historical spending trends for 'Other Communications Equipment Manufacturing' within the Department of the Air Force are substantial, reflecting the continuous need for advanced communication and data security technologies. While specific figures for this exact sub-category are not readily available without detailed database access, the broader defense communications and IT procurement budgets are in the billions annually. The Air Force consistently invests in upgrading its communication infrastructure, including encryption capabilities, to counter evolving cyber threats. Spending in this area tends to be stable or increasing, driven by technological advancements and the critical nature of secure communications for military operations.

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: FA830722R0029

Offers Received: 2

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: $34,091,779

Exercised Options: $34,091,779

Current Obligation: $33,859,872

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $3,899,895

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