DoD Awards General Dynamics $8.75M for NSA-Certified Media Encryptor, Facing Limited Competition
Contract Overview
Contract Amount: $8,749,801 ($8.7M)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-06-04
End Date: 2027-06-03
Contract Duration: 1,094 days
Daily Burn Rate: $8.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: DESIGN, DEVELOPMENT, INTEGRATION, TESTING, AND NATIONAL SECURITY AGENCY CERTIFICATION OF A MC CDAR INLINE MEDIA ENCRYPTOR (IME) IN ACCORDANCE WITH CONTRACTORS STATEMENT OF WORK (CSOW), SYSTEM REQUIREMENTS DOCUMENT (SRD), AND SRD ANNEX A.
Place of Performance
Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $8.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: DESIGN, DEVELOPMENT, INTEGRATION, TESTING, AND NATIONAL SECURITY AGENCY CERTIFICATION OF A MC CDAR INLINE MEDIA ENCRYPTOR (IME) IN ACCORDANCE WITH CONTRACTORS STATEMENT OF WORK (CSOW), SYSTEM REQUIREMENTS DOCUMENT (SRD), AND SRD ANNEX A. Key points: 1. The contract focuses on designing, developing, and certifying a media encryptor for national security applications. 2. General Dynamics Mission Systems, Inc. is the sole awardee, raising questions about competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. The sector is Other Communications Equipment Manufacturing, a critical area for defense technology.
Value Assessment
Rating: fair
The award amount of $8.75M for a specialized NSA-certified encryptor appears reasonable given the complexity and security requirements. However, without detailed cost breakdowns or benchmarks for similar, highly specialized secure communication devices, a definitive value assessment is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under a 'Full and Open Competition' designation, but the data indicates only one awardee, General Dynamics Mission Systems, Inc. This suggests that while the opportunity was open, only one entity was capable or chose to bid, potentially limiting price discovery and competitive pressure.
Taxpayer Impact: The taxpayer impact is moderate, with an $8.75M expenditure for a critical national security asset. The Cost Plus Fixed Fee structure necessitates close oversight to ensure costs remain within reasonable bounds and do not escalate unnecessarily.
Public Impact
Enhances national security by providing certified media encryption capabilities. Supports the Department of the Air Force's communication infrastructure. Potential for technological advancements in secure media handling. Ensures compliance with stringent NSA security standards.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may lead to higher costs.
- Cost Plus Fixed Fee contracts require robust oversight.
- Sole awardee raises questions about market availability of solutions.
Positive Signals
- Critical national security capability.
- Award to established defense contractor.
- Clear statement of work and requirements.
Sector Analysis
This contract falls within the 'Other Communications Equipment Manufacturing' sector, which is vital for secure data transmission in defense and intelligence. Spending in this niche area is often characterized by high R&D costs, stringent certification processes, and a limited number of specialized providers.
Small Business Impact
The data indicates that this contract was not awarded to a small business. Given the specialized nature of NSA certification and advanced encryption technology, it is common for such contracts to go to larger, established defense contractors with the necessary expertise and infrastructure.
Oversight & Accountability
The Cost Plus Fixed Fee contract type requires diligent oversight from the Department of the Air Force to manage costs effectively and ensure the contractor adheres to the Statement of Work and System Requirements Document. Regular audits and performance reviews will be crucial for accountability.
Related Government Programs
- Other Communications Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost overrun potential due to CPFF structure
- Limited competition may result in suboptimal pricing
- Dependence on a single contractor for critical technology
- Potential for scope creep without strict oversight
Tags
other-communications-equipment-manufactu, department-of-defense, az, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $8.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. DESIGN, DEVELOPMENT, INTEGRATION, TESTING, AND NATIONAL SECURITY AGENCY CERTIFICATION OF A MC CDAR INLINE MEDIA ENCRYPTOR (IME) IN ACCORDANCE WITH CONTRACTORS STATEMENT OF WORK (CSOW), SYSTEM REQUIREMENTS DOCUMENT (SRD), AND SRD ANNEX A.
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 $8.7 million.
What is the period of performance?
Start: 2024-06-04. End: 2027-06-03.
What is the projected return on investment for this media encryptor in terms of enhanced national security capabilities?
Quantifying the ROI for national security assets like this encryptor is challenging. Its value lies in mitigating risks associated with data breaches, espionage, and unauthorized access to sensitive information. The investment is justified by the prevention of potentially catastrophic intelligence failures or compromises, safeguarding classified communications and operational integrity.
What are the primary risks associated with the Cost Plus Fixed Fee contract structure for this project?
The primary risks with a Cost Plus Fixed Fee (CPFF) structure are potential cost overruns and reduced incentive for the contractor to control expenses. If the government's oversight is insufficient, the contractor may incur higher costs than necessary, increasing the final price. Ensuring strict adherence to the SOW and rigorous cost tracking is paramount to mitigate this risk.
How effective is the 'Full and Open Competition' designation when only one awardee is identified?
The 'Full and Open Competition' designation indicates the solicitation was publicly advertised, allowing any responsible source to submit an offer. However, if only one bid is received, it suggests a lack of market interest, insufficient contractor capability, or a highly specialized requirement that only one entity could meet. This limits the competitive benefits, potentially impacting price and innovation.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
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: $24,373,221
Exercised Options: $24,373,221
Current Obligation: $8,749,801
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $1,222,740
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
Start Date: 2024-06-04
Current End Date: 2027-06-03
Potential End Date: 2027-06-03 00:00:00
Last Modified: 2025-12-04
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