DoD awards $34.6M for high-assurance encryption and space ground equipment, with General Dynamics Mission Systems as prime

Contract Overview

Contract Amount: $34,618,757 ($34.6M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-01-17

End Date: 2027-07-16

Contract Duration: 1,276 days

Daily Burn Rate: $27.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: COMBINED TERRESTRIAL HIGH ASSURANCE INTERNET PROTOCOL ENCRYPTION AND SPACE GROUND OPERATING EQUIPMENT SOLUTION ON COMMON HARDWARE SUPPORTING CRYPTO MODERNIZATION 2 REQUIREMENTS

Place of Performance

Location: LAS CRUCES, DONA ANA County, NEW MEXICO, 88007

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $34.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: COMBINED TERRESTRIAL HIGH ASSURANCE INTERNET PROTOCOL ENCRYPTION AND SPACE GROUND OPERATING EQUIPMENT SOLUTION ON COMMON HARDWARE SUPPORTING CRYPTO MODERNIZATION 2 REQUIREMENTS Key points: 1. Contract focuses on critical crypto modernization for secure communications. 2. General Dynamics Mission Systems, a major defense contractor, is the prime. 3. The contract type is Cost Plus Incentive Fee, suggesting performance-based incentives. 4. Delivery order awarded under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. Performance period spans over three years, indicating a sustained need. 6. The contract is for 'Other Communications Equipment Manufacturing', a broad category.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the scope of the overarching IDIQ contract. However, the total award amount of $34.6 million over approximately 3.5 years suggests a significant investment in advanced communication technology. The Cost Plus Incentive Fee (CPIF) structure implies that pricing is tied to performance, which can be a value driver if managed effectively. Further analysis would require comparing unit costs for similar encryption hardware and ground equipment against industry benchmarks and other government contracts.

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. This competitive process is generally favorable for price discovery and ensuring the government receives competitive pricing. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition was sought.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The Department of the Air Force benefits from enhanced secure communication capabilities. Services delivered include the provision of high-assurance internet protocol encryption and space ground operating equipment. The contract supports the modernization of cryptographic systems, crucial for national security. Workforce implications may include specialized roles in engineering, manufacturing, and cybersecurity within General Dynamics Mission Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can lead to cost overruns if not closely monitored.
The broad 'Other Communications Equipment Manufacturing' category makes specific performance benchmarking difficult.
Reliance on a single prime contractor for a critical solution warrants close oversight.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Focus on crypto modernization addresses a critical national security need.
Long-term performance period allows for sustained development and integration.

Sector Analysis

This contract falls within the broader defense communications and electronics manufacturing sector. The market for high-assurance encryption and space ground equipment is specialized, driven by stringent security requirements and technological advancements. Spending in this area is critical for maintaining secure command and control capabilities for military operations. Comparable spending benchmarks would typically be found within other large defense contracts for secure communication systems and satellite ground infrastructure.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside. This suggests that the prime contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist within the execution of this contract, but this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the Cost Plus Incentive Fee (CPIF) structure, which links contractor profit to performance metrics. Transparency is facilitated by the contract being awarded under full and open competition, with details typically available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Cryptographic Modernization Programs
Space Ground Systems
Secure Network Equipment

Risk Flags

Potential for cost overruns due to CPIF structure.
Risk of obsolescence if technology evolves rapidly.
Need for rigorous testing to ensure security and interoperability.
Dependence on a single prime contractor for critical capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. COMBINED TERRESTRIAL HIGH ASSURANCE INTERNET PROTOCOL ENCRYPTION AND SPACE GROUND OPERATING EQUIPMENT SOLUTION ON COMMON HARDWARE SUPPORTING CRYPTO MODERNIZATION 2 REQUIREMENTS

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 $34.6 million.

What is the period of performance?

Start: 2024-01-17. End: 2027-07-16.

What is the specific nature of the 'COMBINED TERRESTRIAL HIGH ASSURANCE INTERNET PROTOCOL ENCRYPTION AND SPACE GROUND OPERATING EQUIPMENT SOLUTION' being procured?

The contract aims to procure a comprehensive solution that integrates high-assurance Internet Protocol (IP) encryption capabilities with essential space ground operating equipment. This implies a need for secure data transmission over terrestrial networks and robust ground infrastructure to manage and operate space assets. The 'common hardware' aspect suggests a move towards standardization and potentially reduced lifecycle costs. The 'crypto modernization' requirement indicates an upgrade to existing encryption standards to counter evolving threats and ensure the confidentiality, integrity, and authenticity of sensitive defense communications, particularly those involving space-based systems.

How does the Cost Plus Incentive Fee (CPIF) structure typically work, and what are its implications for this contract?

A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and also receives a fee that is adjusted based on performance against pre-determined targets. For this contract, the fee earned by General Dynamics Mission Systems will likely be tied to achieving specific cost, schedule, or performance objectives related to the delivery and functionality of the encryption and ground equipment. This structure incentivizes the contractor to control costs and meet or exceed performance expectations, as higher performance can lead to a higher fee. Conversely, underperformance could result in a reduced fee. Effective oversight is crucial to ensure the incentive targets are appropriate and that the contractor is genuinely motivated to achieve them.

What are the potential risks associated with procuring 'Other Communications Equipment Manufacturing' solutions for critical defense applications?

Procuring solutions under the broad 'Other Communications Equipment Manufacturing' category (NAICS code 334290) can present several risks. Firstly, the lack of specificity in the NAICS code might obscure the exact nature of the technology or its maturity. Secondly, it could imply that the equipment is not a standard, off-the-shelf item, potentially leading to higher development costs and longer lead times. For critical defense applications, risks include potential interoperability issues with existing systems, cybersecurity vulnerabilities if the equipment is not rigorously tested, and challenges in ensuring long-term sustainment and upgrades. The government must ensure detailed technical specifications and robust testing protocols are in place to mitigate these risks.

What does the contract's duration of 1276 days (approximately 3.5 years) signify for the Department of Defense?

The contract duration of approximately 3.5 years signifies a substantial, long-term commitment by the Department of Defense (DoD) to acquire and integrate the specified high-assurance encryption and space ground operating equipment. This extended period suggests that the solution is not a short-term fix but rather a critical component intended for sustained use and integration into the DoD's communication infrastructure. It implies a need for ongoing support, potential upgrades, and a stable operational environment. Such a duration also allows for phased deployment and testing, reducing the risk of large-scale implementation failures and enabling the contractor to refine the solution based on operational feedback.

How does this contract align with broader trends in defense spending, particularly regarding technology modernization?

This contract aligns directly with the broader trend of defense spending focused on technology modernization, especially in areas critical to national security like cybersecurity and space capabilities. The emphasis on 'high assurance' encryption and 'crypto modernization' reflects the DoD's strategic priority to counter sophisticated cyber threats and ensure the integrity of its communication networks. Furthermore, the inclusion of 'space ground operating equipment' underscores the increasing importance of space as a warfighting domain and the need for robust infrastructure to support satellite operations. This type of investment is indicative of a shift towards more advanced, secure, and resilient systems necessary for maintaining a technological edge.

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

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $64,909,674

Exercised Options: $62,503,678

Current Obligation: $34,618,757

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $5,723,206

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