DoD's $100M+ communications security equipment contract awarded to General Dynamics, spanning nearly a decade

Contract Overview

Contract Amount: $100,753,678 ($100.8M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 1999-01-12

End Date: 2007-03-12

Contract Duration: 2,981 days

Daily Burn Rate: $33.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199910!1700!0380!F9999!MARINE CORPS SYSTEMS COMMAND !M6785499C2059 !A!*!* !19990112!20000501!116187758!116187758!001381284!N!94151!GENERAL DYNAMICS GOVERNMENT SY!77 A ST !NEEDHAM !MA!02494!44140!021!25!NEEDHAM !NORFOLK !MASS !0001!+000051160453!N!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3571!3!*!*!*!B!A!*!A !N!J!2!003!B!* !Z!Y!Z!* !* !N!C!*!B!B!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: TAUNTON, BRISTOL County, MASSACHUSETTS, 02780

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $100.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 199910!1700!0380!F9999!MARINE CORPS SYSTEMS COMMAND !M6785499C2059 !A!*!* !19990112!20000501!116187758!116187758!001381284!N!94151!GENERAL DYNAMICS GOVERNMENT SY!77 A ST !NEEDHAM !MA!02494!44140!021!25!NEEDHAM !NORFOL… Key points: 1. Contract value exceeds $100 million, indicating a significant investment in critical defense technology. 2. Awarded through full and open competition, suggesting a robust market and potential for competitive pricing. 3. Long contract duration of nearly 8 years may present risks related to technological obsolescence and cost overruns. 4. The contract falls under the 'Electronics and Communication' category, highlighting its role in modernizing military infrastructure. 5. General Dynamics has a substantial track record in defense contracting, suggesting established capabilities but also potential for vendor lock-in.

Value Assessment

Rating: good

The contract's total value of over $100 million for communications security equipment is substantial. Benchmarking against similar large-scale defense procurements for advanced electronics, this figure appears within a reasonable range, especially considering the specialized nature of the equipment. The firm fixed-price contract type suggests that the government has transferred most of the cost risk to the contractor, which can be advantageous if the contractor manages costs effectively. However, the long duration of the contract (nearly 8 years) could lead to price escalations or the need for contract modifications if market conditions or technological requirements change significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of multiple bidders (3 indicated) in such a specialized and high-value procurement suggests a healthy competitive environment. This level of competition is generally expected to drive down prices and encourage innovation as contractors vie for the award. The specific number of bidders is not detailed, but the 'full and open' designation is a positive sign for price discovery.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best possible value for the significant investment in communications security equipment. Open competition helps ensure that the government is not overpaying for essential defense capabilities.

Public Impact

The primary beneficiaries are the U.S. Marine Corps, receiving advanced communications security equipment essential for operational effectiveness. The contract delivers critical electronic and communication components vital for secure military operations. The geographic impact is national, supporting defense infrastructure across various operational theaters. Workforce implications include potential job creation and sustainment within General Dynamics and its supply chain, particularly in specialized electronics manufacturing and engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 8 years) increases the risk of technological obsolescence and potential cost increases due to market fluctuations.
Reliance on a single large contractor for a critical technology like communications security could create vendor lock-in and limit future flexibility.
The substantial contract value may indicate a lack of smaller, innovative competitors being able to participate or win, potentially limiting broader market engagement.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
Firm fixed-price contract type transfers cost risk to the contractor, potentially leading to better cost control.
General Dynamics is an established defense contractor with proven capabilities in delivering complex systems.
The contract addresses a critical need for secure communications, enhancing national security.

Sector Analysis

This contract falls within the broader Defense sector, specifically focusing on Electronics and Communication equipment. The market for defense communications technology is characterized by high barriers to entry due to stringent security requirements, technological complexity, and significant R&D investment. Major defense contractors like General Dynamics dominate this space. Comparable spending benchmarks for secure communication systems can vary widely based on scope, but a contract exceeding $100 million for a multi-year period suggests a significant procurement of advanced, potentially classified, systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the large contract value and specialized nature of communications security equipment, it is likely that large, established defense contractors are the primary participants. Subcontracting opportunities for small businesses may exist within the supply chain for components or specialized services, but the primary awardee is a large corporation. This contract does not appear to directly foster the small business ecosystem for prime contracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which ensures contractors meet performance and quality standards. The firm fixed-price nature of the contract provides a degree of financial oversight by limiting cost increases. Transparency is generally limited for defense contracts involving sensitive technologies, but reporting requirements under the Federal Acquisition Regulation (FAR) would apply. Inspector General jurisdiction would cover investigations into fraud, waste, or abuse related to the contract.

Related Government Programs

Tactical Data Links
Secure Communication Systems
Command and Control Systems
Electronic Warfare Equipment
Intelligence, Surveillance, and Reconnaissance (ISR) Systems

Risk Flags

Long contract duration
Potential for technological obsolescence
High contract value
Reliance on a single large contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $100.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 199910!1700!0380!F9999!MARINE CORPS SYSTEMS COMMAND !M6785499C2059 !A!*!* !19990112!20000501!116187758!116187758!001381284!N!94151!GENERAL DYNAMICS GOVERNMENT SY!77 A ST !NEEDHAM !MA!02494!44140!021!25!NEEDHAM !NORFOLK !MASS !0001!+000051160453!N!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3571!3!*!*!*!B!A!*!A !N!J!2!0

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 $100.8 million.

What is the period of performance?

Start: 1999-01-12. End: 2007-03-12.

What is General Dynamics' track record with similar large-scale defense communication contracts?

General Dynamics, through its various divisions, has a long and extensive history of securing and executing large, complex defense contracts, including those for communication systems, command and control, and electronic warfare. They are a prime contractor for numerous programs across multiple military branches. Their track record often involves delivering sophisticated hardware and software solutions, but also includes instances of contract modifications, cost adjustments, and performance reviews common in long-term, high-value defense procurements. Analyzing specific past performance on contracts of similar scope and duration would provide a clearer picture of their reliability and efficiency in delivering secure communication equipment.

How does the per-unit cost of the communications security equipment compare to market rates or similar government procurements?

Determining a precise per-unit cost for this contract is challenging without detailed breakdowns of the specific equipment procured and the quantities involved. The provided data aggregates a total contract value of over $100 million over nearly eight years. Communications security equipment can range from individual encryption devices to complex network infrastructure, with unit costs varying dramatically. Without specific product information, direct per-unit cost comparison to market rates or other government contracts is not feasible. However, the firm fixed-price nature suggests the contractor aimed to price competitively based on their anticipated costs and market intelligence at the time of award.

What are the primary risks associated with the long duration (nearly 8 years) of this contract?

The primary risks associated with an approximately eight-year contract duration for communications security equipment include technological obsolescence, potential for cost escalation, and reduced flexibility. Technology in the communications and cybersecurity fields evolves rapidly; equipment procured early in the contract might be outdated by its end, requiring costly upgrades or replacements. Market conditions, material costs, and labor rates can fluctuate significantly over such a long period, potentially impacting the contractor's ability to maintain profitability under a fixed-price agreement, leading to requests for equitable adjustments or contract modifications. Furthermore, a long-term commitment to specific technologies or vendors can limit the government's ability to adopt newer, potentially more effective or cost-efficient solutions that emerge during the contract period.

How effective has General Dynamics been in delivering on past contracts of similar scale and complexity within the defense sector?

General Dynamics has a demonstrated capacity for delivering complex systems within the defense sector, often handling programs valued in the hundreds of millions or billions of dollars. Their performance is generally viewed as capable, particularly in areas like shipbuilding, armored vehicles, and IT services. However, like many large defense contractors, they have faced scrutiny and challenges on specific programs related to cost overruns, schedule delays, or technical issues. A comprehensive assessment of their effectiveness would require analyzing specific contract performance metrics, CPARS (Contractor Performance Assessment Reporting System) data, and any relevant Inspector General reports pertaining to their past work on large-scale communication systems.

What are the historical spending patterns for communications security equipment within the Department of Defense or Marine Corps?

Historical spending on communications security (COMSEC) equipment within the Department of Defense (DoD) and specifically the Marine Corps is substantial and generally trends upwards, driven by evolving threats, technological advancements, and the increasing reliance on digital communication networks. While the exact figures for this specific contract ($100M+ over ~8 years) represent a significant portion of spending, the DoD procures a wide array of COMSEC solutions annually, often through various contract vehicles and programs. Spending is influenced by modernization efforts, cybersecurity initiatives, and operational tempo. Analyzing broader DoD COMSEC spending trends over the last decade would reveal consistent investment in this area, often fluctuating based on strategic priorities and budget allocations.

Does the 'full and open competition' designation guarantee the best value for taxpayers in this specific case?

While 'full and open competition' is designed to promote best value by fostering a competitive environment, it doesn't automatically guarantee it in every instance. The process aims to ensure that multiple bidders have the opportunity to compete, driving down prices and encouraging innovation. However, the 'best value' is realized when the competition is robust, the evaluation criteria are well-defined, and the chosen solution effectively meets the government's needs at a fair price. For this specific contract, the fact that it was competed openly suggests a strong likelihood of competitive pricing. The long duration and specialized nature of the equipment mean that 'best value' also encompasses long-term reliability, maintainability, and technological relevance, which are harder to quantify solely based on initial bid price.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 400 JOHN QUINCY ADAMS RD, TAUNTON, MA, 02780

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline