DoD's $40.5M engineering services contract for clean space facilities awarded to General Dynamics

Contract Overview

Contract Amount: $40,537,170 ($40.5M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-05-18

End Date: 2020-12-31

Contract Duration: 958 days

Daily Burn Rate: $42.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES: THIS TASK WILL ACQUIRE AND INSTALL BUILDING 2 FACILITIES ISO CLASS III CLEAN SPACE FOR A 200 MM WAFER CAPABLE TOOL SET BUILD ACTIVITIES.

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55431

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $40.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: ENGINEERING SERVICES: THIS TASK WILL ACQUIRE AND INSTALL BUILDING 2 FACILITIES ISO CLASS III CLEAN SPACE FOR A 200 MM WAFER CAPABLE TOOL SET BUILD ACTIVITIES. Key points: 1. Contract awarded for specialized clean space facilities crucial for advanced semiconductor manufacturing. 2. General Dynamics Mission Systems, Inc. secured the contract, indicating established capabilities in complex engineering projects. 3. The contract's duration of 958 days suggests a significant and multi-phased project. 4. The cost-plus-fixed-fee pricing structure allows for flexibility but requires careful oversight to manage costs. 5. This award falls under engineering services, a critical sector supporting defense and technological advancement. 6. The project's focus on a 200 mm wafer capable tool set highlights its role in supporting advanced microelectronics production.

Value Assessment

Rating: good

The contract value of $40.5 million for specialized clean space facilities appears reasonable given the complexity and duration. Benchmarking against similar large-scale cleanroom construction and engineering projects would provide a more precise value-for-money assessment. The cost-plus-fixed-fee structure necessitates diligent oversight to ensure costs remain within expected parameters and that the fixed fee adequately compensates the contractor for their efforts without excessive profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust bidding process. While the specific number of bidders is not provided, this method generally fosters competitive pricing and encourages a wide range of qualified contractors to participate. The open competition is a positive indicator for achieving fair market value and selecting the most capable provider for this specialized engineering task.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and ensures that the government receives the best value for its investment by leveraging a broad market.

Public Impact

The Department of Defense benefits from enhanced capabilities in semiconductor manufacturing infrastructure. Services delivered include the acquisition and installation of specialized clean space facilities. The project's location in Minnesota (ST, SN) has implications for local construction and engineering workforces. The enhanced clean space facilities will support the integration of advanced semiconductor manufacturing tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus-fixed-fee contracts requires vigilant financial oversight.
Ensuring the final clean space meets stringent ISO Class III standards is critical for tool functionality.
Dependency on a single contractor for this specialized build could pose risks if performance issues arise.

Positive Signals

Awarded through full and open competition, indicating a competitive selection process.
General Dynamics Mission Systems has a track record in complex defense-related engineering projects.
The project addresses a critical need for advanced semiconductor manufacturing infrastructure within the defense sector.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced manufacturing and facility construction. The market for specialized cleanroom construction and engineering is highly technical, often involving a limited number of experienced firms. The value of this contract is significant within this niche, reflecting the high costs associated with creating and maintaining ultra-clean environments essential for semiconductor fabrication.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. Therefore, there are no direct subcontracting implications for small businesses mandated by this award. However, the prime contractor, General Dynamics, may engage small businesses as subcontractors for various support services, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates rigorous financial monitoring to control costs and verify the reasonableness of expenditures. Transparency is generally maintained through contract reporting requirements and potential audits by the Inspector General.

Related Government Programs

Defense Microelectronics Activity
Semiconductor Manufacturing Infrastructure
Advanced Facility Construction
DoD Research and Development Facilities

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage potential cost escalations.
Complexity of ISO Class III clean space standards necessitates stringent quality control and verification.
Dependence on specialized engineering services highlights potential single-source risks if key personnel or expertise are limited.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. ENGINEERING SERVICES: THIS TASK WILL ACQUIRE AND INSTALL BUILDING 2 FACILITIES ISO CLASS III CLEAN SPACE FOR A 200 MM WAFER CAPABLE TOOL SET BUILD ACTIVITIES.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $40.5 million.

What is the period of performance?

Start: 2018-05-18. End: 2020-12-31.

What is the historical spending pattern for similar clean space facility engineering services within the Department of Defense?

Historical spending on similar clean space facility engineering services within the Department of Defense can vary significantly based on project scope, technological requirements, and facility size. Large-scale projects, such as those involving semiconductor fabrication capabilities, can range from tens to hundreds of millions of dollars. The DoD has a strategic interest in securing domestic microelectronics manufacturing capabilities, which has led to increased investment in specialized facilities. Analyzing past awards for cleanroom construction, advanced manufacturing support, and specialized engineering services over the last 5-10 years would reveal trends in contract values, durations, and the types of contractors typically engaged. This specific $40.5 million award for a 200mm wafer-capable clean space appears to be a substantial investment, likely reflecting the advanced nature of the required ISO Class III environment and the integration of complex tool sets.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar engineering projects, and what are the associated risks?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for complex engineering and development projects where the scope may evolve or unforeseen challenges are anticipated. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing their profit. This differs from fixed-price contracts, where the price is set upfront, and from cost-reimbursement contracts without a fixed fee. The primary advantage of CPFF is flexibility, allowing for adjustments as the project progresses. However, it carries risks for the government, including potential cost overruns if initial estimates are inaccurate or if scope creep occurs without proper control. The contractor has less incentive to control costs compared to a firm-fixed-price contract, as their profit is fixed regardless of the final cost. Robust oversight, detailed cost tracking, and clear change management processes are crucial to mitigate these risks and ensure value for money.

What is General Dynamics Mission Systems' track record with large-scale engineering and facility construction contracts for the DoD?

General Dynamics Mission Systems, Inc. (GDMS) has a substantial track record of delivering complex engineering, technology, and integration solutions for the Department of Defense and other government agencies. While their primary focus often lies in C4ISR systems, cyber security, and platform integration, they also possess capabilities in managing large-scale infrastructure and facility projects that support these core missions. Their experience typically involves intricate system integration, adherence to stringent security protocols, and managing multi-year, multi-million dollar programs. For facility construction and specialized environments like cleanrooms, GDMS would likely leverage their program management expertise and potentially partner with specialized subcontractors. Reviewing their contract history for projects involving secure facilities, advanced technology integration, or specialized manufacturing environments would provide further insight into their suitability for this specific clean space acquisition.

What are the performance metrics and key performance indicators (KPIs) used to evaluate the success of this clean space facility contract?

Performance metrics and Key Performance Indicators (KPIs) for a contract like this, focused on acquiring and installing ISO Class III clean space facilities, would likely center on several critical areas. These would include adherence to the specified cleanroom classification standards (ISO Class III), verified through rigorous air particle count testing and certification. Schedule adherence, measured by milestones met and the final delivery date, is crucial. Cost control, ensuring expenditures align with the estimated costs and managing the fixed fee appropriately, is another key KPI. The successful integration and operational readiness of the '200 mm wafer capable tool set' within the new facility would be a paramount performance indicator. Furthermore, quality assurance metrics, such as defect rates during construction and installation, and compliance with all safety and environmental regulations, would be essential for evaluating overall contract success.

What is the strategic importance of this clean space facility to the DoD's broader goals in semiconductor manufacturing and supply chain resilience?

This clean space facility is strategically vital to the DoD's broader goals concerning semiconductor manufacturing and supply chain resilience. The increasing reliance on advanced microelectronics for defense systems, coupled with global supply chain vulnerabilities and geopolitical risks, has made domestic production capabilities a national security imperative. By investing in facilities capable of supporting advanced semiconductor manufacturing tools (like those for 200mm wafers), the DoD aims to reduce dependence on foreign sources, ensure a secure supply of critical components, and foster innovation within the U.S. defense industrial base. This project directly contributes to building the necessary infrastructure to support these objectives, potentially enabling the production or advanced packaging of chips essential for next-generation defense platforms.

Industry Classification

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

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

Solicitation ID: HQ072715R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8800 QUEEN AVE S, BLOOMINGTON, MN, 55431

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,537,170

Exercised Options: $40,537,170

Current Obligation: $40,537,170

Actual Outlays: $1,640,625

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $29,636,651

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ072716D0003

IDV Type: IDC

Timeline