Air Force awards $19.9M for Ground Sustainment, exceeding prior contract by $654K

Contract Overview

Contract Amount: $19,923,818 ($19.9M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-10-01

End Date: 2026-07-31

Contract Duration: 1,034 days

Daily Burn Rate: $19.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: MOBILE USER OBJECTIVE SYSTEM, GROUND SUSTAINMENT

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $19.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: MOBILE USER OBJECTIVE SYSTEM, GROUND SUSTAINMENT Key points: 1. Value for money appears fair, with a slight increase over previous contract duration. 2. Competition was robust, indicating potential for competitive pricing. 3. Performance risk is moderate, given the cost-plus award fee structure. 4. This contract supports critical ground systems for the Air Force. 5. The contractor has a significant presence in defense IT and engineering services. 6. Spending on similar sustainment services is substantial across the DoD.

Value Assessment

Rating: fair

The total award amount of $19.9 million for a period of approximately 3 years represents a modest increase compared to the previous contract's value, adjusted for duration. Benchmarking against similar ground sustainment contracts within the Department of Defense suggests that the pricing is within a reasonable range, though the cost-plus award fee structure necessitates careful monitoring of expenditures to ensure value. The contractor's historical performance on similar contracts will be a key indicator of future value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which suggests that while competition was sought, certain sources may have been excluded based on specific criteria. The number of bidders is not explicitly stated, but the designation implies a more controlled competitive environment than a purely open solicitation. This could potentially limit the breadth of price discovery compared to a truly open process.

Taxpayer Impact: Taxpayers benefit from a structured competition that aims to balance access to specialized capabilities with cost control. The exclusion of certain sources may be justified by specific technical requirements, ensuring the best fit for the mission while still seeking competitive proposals.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel who rely on the operational readiness of ground systems. Services delivered include sustainment, maintenance, and potentially upgrades for critical ground-based equipment. The geographic impact is likely concentrated at Air Force installations where these ground systems are deployed. Workforce implications may include the need for specialized technical personnel for sustainment and support activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can incentivize cost overruns if not managed tightly.
The 'exclusion of sources' in competition warrants scrutiny to ensure fairness and optimal pricing.
Sustainment contracts can become sole-source over time if competition is not actively pursued.

Positive Signals

The contract is awarded to a large, established defense contractor with significant experience.
The duration of the contract provides stability for sustainment operations.
The award fee mechanism, if structured correctly, can incentivize contractor performance.

Sector Analysis

The defense engineering services sector is a significant component of the federal contracting landscape, with substantial annual spending. This contract falls within the broader category of defense IT and systems sustainment, a market characterized by long-term relationships and specialized technical expertise. Comparable spending benchmarks for similar ground system sustainment contracts within the DoD often range from tens to hundreds of millions of dollars annually, depending on the complexity and scale of the systems involved.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of the services and the prime contractor, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans detailed in the award, the direct impact on the small business ecosystem is unclear. Analysis of subcontracting reports would be necessary to assess the extent of small business involvement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the Cost Plus Award Fee (CPAF) structure, which ties a portion of the contractor's profit to performance metrics. Transparency is generally maintained through contract reporting requirements, though specific details of performance evaluations may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD Ground Systems Sustainment
Air Force IT Infrastructure Support
Defense Engineering Services
Logistics and Maintenance Contracts

Risk Flags

Potential for cost growth under CPAF structure.
Limited competition due to source exclusion requires justification.
Sustainment contracts can be prone to scope creep if not managed.
Dependence on a single contractor for critical system sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. MOBILE USER OBJECTIVE SYSTEM, GROUND SUSTAINMENT

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 $19.9 million.

What is the period of performance?

Start: 2023-10-01. End: 2026-07-31.

What is General Dynamics Mission Systems, Inc.'s track record with similar ground sustainment contracts for the Air Force?

General Dynamics Mission Systems, Inc. (GDMS) has a substantial history of performing complex sustainment and support contracts for the Department of Defense, including the Air Force. Their experience often spans a wide range of systems, from command and control to communication and intelligence platforms. For ground sustainment specifically, GDMS has been involved in maintaining and upgrading various types of infrastructure and equipment critical to Air Force operations. Performance on past contracts, as reflected in contract award histories and performance evaluations (if publicly available), would indicate their capability to meet the technical and operational requirements of this current award. A review of their past performance ratings and any significant issues or successes on comparable contracts would provide a clearer picture of their reliability and effectiveness in this domain.

How does the $19.9 million award compare to historical spending on this specific "MOBILE USER OBJECTIVE SYSTEM, GROUND SUSTAINMENT"?

The current award of $19.9 million for the "MOBILE USER OBJECTIVE SYSTEM, GROUND SUSTAINMENT" contract, spanning from October 1, 2023, to July 31, 2026 (approximately 34 months), represents a slight increase compared to the previous contract's value. While the exact prior contract value isn't provided in the abbreviated data, the 'br' field indicates a prior value of $19,269, which is likely a placeholder or error given the current award size. Assuming the 'br' field is not representative, a more accurate comparison would require accessing historical contract data for this specific system. However, if we infer that the $19.9M is a continuation or expansion, and considering the duration, the annual spend is roughly $7 million. This figure should be benchmarked against annual sustainment costs for similar complex ground systems within the Air Force and DoD to assess if it aligns with market expectations and efficiency goals.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for ground sustainment?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract for ground sustainment revolve around cost control and performance incentivization. While CPAF aims to motivate contractors to exceed minimum performance standards by offering award fees, it also carries the risk of cost growth if the base cost plus fee exceeds initial projections. The contractor is reimbursed for allowable costs and receives a fixed fee plus an award fee based on performance against defined criteria. The risk for the government lies in ensuring that the performance criteria are well-defined, measurable, and truly incentivize desired outcomes without encouraging unnecessary spending. If the criteria are vague or easily met, the award fee may not effectively drive superior performance, and costs could escalate. Conversely, if the criteria are too stringent or unattainable, the contractor may be disincentivized. Effective oversight and robust performance monitoring are crucial to mitigate these risks and ensure value for money.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact price discovery and potential savings?

The 'Full and Open Competition After Exclusion of Sources' procurement method represents a nuanced approach to competition. While it starts with the principle of full and open competition, the subsequent 'exclusion of sources' signifies that specific potential bidders were deliberately removed from consideration. This exclusion is typically based on predefined criteria, such as unique capabilities, past performance, or specific security requirements. The impact on price discovery is that it narrows the competitive field, potentially reducing the number of proposals received and the intensity of price competition compared to a truly unrestricted full and open process. This could lead to less downward pressure on prices. However, if the exclusions are justified by essential technical requirements that only a limited number of contractors can meet, the resulting competition among the remaining qualified bidders might still yield a fair price. The key is whether the exclusions were necessary and appropriately justified to ensure the best value for the government.

What are the implications of this contract's duration (1034 days) on long-term sustainment strategy and contractor investment?

A contract duration of 1034 days (approximately 2.8 years) for ground sustainment provides a moderate but not extensive period of stability. For the government, this duration allows for consistent support and maintenance of the "MOBILE USER OBJECTIVE SYSTEM" without the immediate need for a full recompete. It enables the contractor, General Dynamics Mission Systems, Inc., to plan resources, personnel, and potentially make targeted investments in tooling or training necessary for effective sustainment. However, for longer-term strategic planning and significant capital investments by the contractor (e.g., in new technologies or infrastructure upgrades), a longer contract duration or clear options for extension would be more beneficial. This duration strikes a balance, ensuring continuity while still allowing for periodic reassessment of requirements and market conditions.

What is the significance of the 'na' (NAICS code 541330 - Engineering Services) and 'nd' (Engineering Services) designations for this contract?

The designation of NAICS code 541330, 'Engineering Services,' and the description 'Engineering Services' for this contract indicate that the primary focus of the work involves the application of engineering principles to the sustainment of the "MOBILE USER OBJECTIVE SYSTEM, GROUND SUSTAINMENT." This typically encompasses a range of activities such as technical analysis, design support, system integration, testing, and potentially modifications or upgrades to ensure the system's continued operational effectiveness and reliability. It suggests that the contract requires specialized engineering expertise beyond basic maintenance or repair, focusing on the technical integrity and performance of the ground systems. This classification helps in categorizing the spending for statistical purposes and understanding the type of technical capabilities being procured.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS AWARD FEE (R)

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: $23,794,801

Exercised Options: $23,794,801

Current Obligation: $19,923,818

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $2,859,801

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003920D0146

IDV Type: IDC

Timeline