Navy awards $36.3M for F/A-18E/F production support, with General Dynamics-OTS as sole provider

Contract Overview

Contract Amount: $36,292,190 ($36.3M)

Contractor: General Dynamics-Ots, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-06-15

End Date: 2024-04-30

Contract Duration: 2,146 days

Daily Burn Rate: $16.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY17 GUNS SYSTEMS IN SUPPORT OF F/A-18E/F PRODUCTION

Place of Performance

Location: WILLISTON, CHITTENDEN County, VERMONT, 05495

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $36.3 million to GENERAL DYNAMICS-OTS, INC. for work described as: FY17 GUNS SYSTEMS IN SUPPORT OF F/A-18E/F PRODUCTION Key points: 1. Contract awarded to a single supplier suggests limited market competition. 2. Fixed-price contract type may offer cost certainty for the government. 3. Long contract duration (over 6 years) indicates sustained program needs. 4. Focus on production support for a major aircraft platform highlights strategic importance. 5. Lack of competition raises questions about potential price efficiencies. 6. Small business participation is not explicitly detailed in this award.

Value Assessment

Rating: fair

The contract value of $36.3 million for F/A-18E/F production support appears to be a standard allocation for such specialized components. Without specific benchmarks for similar ordnance and accessories for this aircraft, a direct value-for-money assessment is challenging. However, the absence of competition suggests that the government may not have achieved the most competitive pricing possible. The fixed-price nature of the contract provides some predictability, but the overall value is contingent on the necessity and market rates for these specific components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics-OTS, Inc., was considered. This approach is typically used when a unique capability or proprietary technology is required, or when only one source is available. The lack of a competitive bidding process means that potential alternative suppliers were not evaluated, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive pricing that could arise from multiple bids, potentially resulting in a higher overall expenditure for this requirement.

Public Impact

The primary beneficiaries are the U.S. Navy and its F/A-18E/F Super Hornet program, ensuring continued operational readiness. Services delivered include the manufacturing and supply of critical ordnance and small arms components necessary for aircraft production. The geographic impact is primarily centered around the contractor's facilities in Vermont, contributing to local employment and economic activity. Workforce implications include the sustained employment of skilled labor at General Dynamics-OTS, Inc. involved in defense manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long-term contract duration may not reflect evolving market conditions or technological advancements.
Lack of transparency in the justification for sole-sourcing.
Potential for cost overruns if market prices for raw materials fluctuate significantly.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Ensures a consistent supply of critical components for a key defense platform.
Contractor has a direct role in supporting a vital military aircraft program.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of ordnance and related accessories. The market for such specialized components is often consolidated due to high barriers to entry, including technical expertise, manufacturing capabilities, and security clearances. Spending in this area is directly tied to defense appropriations and the sustainment of active military fleets like the F/A-18E/F. Comparable spending benchmarks are difficult to establish without detailed cost breakdowns and market analysis for similar defense-critical components.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. General Dynamics-OTS, Inc. is a large business. This means that the direct economic benefit to the small business ecosystem from this specific award is likely minimal, unless the prime contractor voluntarily engages small businesses for subcontracting opportunities not detailed in this award notice.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, but specific oversight mechanisms beyond standard contract administration are not detailed in the provided data.

Related Government Programs

F/A-18E/F Super Hornet Program
Naval Aviation Support Contracts
Ordnance and Ammunition Manufacturing
Defense Production Act Investments

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.3 million to GENERAL DYNAMICS-OTS, INC.. FY17 GUNS SYSTEMS IN SUPPORT OF F/A-18E/F PRODUCTION

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS-OTS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $36.3 million.

What is the period of performance?

Start: 2018-06-15. End: 2024-04-30.

What is the specific justification for awarding this contract on a sole-source basis to General Dynamics-OTS, Inc.?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other responsible sources. For defense-critical components like ordnance for specific aircraft platforms, there may be stringent technical specifications, existing integration, or long-standing relationships that make a competitive procurement impractical or excessively costly in terms of time and resources. A formal Justification for Other Than Full and Open Competition (JOFOC) would normally be required and would detail these reasons. Without access to that document, the precise rationale remains speculative, but it likely relates to the specialized nature of the components and the contractor's established role in the F/A-18E/F supply chain.

How does the pricing of this contract compare to similar ordnance and accessories for other naval aircraft or defense platforms?

Direct comparison of pricing for this contract is challenging without access to detailed cost breakdowns and market intelligence on similar components across different platforms. The $36.3 million value is for a multi-year supply of unspecified ordnance and accessories for the F/A-18E/F. Factors influencing price include material costs, manufacturing complexity, required certifications, and the volume of production. Given the sole-source nature, it is difficult to ascertain if the pricing reflects competitive market rates. Benchmarking would require identifying contracts for comparable items (e.g., ammunition, weapon system parts) on other platforms like the F-35, F-16, or naval gun systems, and then normalizing for quantity, specifications, and contract type.

What are the potential risks associated with a sole-source contract of this duration for critical defense components?

Sole-source contracts, especially those with long durations like this 6-year award, carry several risks. Firstly, the lack of competition can lead to complacency from the contractor, potentially resulting in reduced innovation or less rigorous cost control, which could inflate prices over time. Secondly, the government becomes heavily reliant on a single supplier, creating a vulnerability if the contractor experiences production issues, financial instability, or decides to exit the market. Thirdly, without competitive pressure, the government may not benefit from potential cost savings or technological advancements that alternative suppliers might offer. Finally, the long duration means the contract price might not adequately reflect future market fluctuations in raw materials or labor costs, potentially leading to unfavorable adjustments.

What is the historical spending pattern for F/A-18E/F production support, and how does this contract fit within that trend?

Historical spending data for F/A-18E/F production support, particularly for specific components like ordnance and small arms, would reveal trends in demand and pricing. This $36.3 million contract, spanning from June 2018 to April 2024, represents a significant but likely recurring expenditure for sustaining the Super Hornet fleet's production line. Without prior contract data for the same items, it's difficult to definitively state if this represents an increase, decrease, or stable spending trend. However, the F/A-18E/F program has been in production for many years, suggesting that support contracts of this nature are essential for ongoing manufacturing and fleet readiness. This award likely continues a pattern of necessary investment in the platform's lifecycle.

What are the implications of this contract for the overall readiness and sustainment of the F/A-18E/F fleet?

This contract is crucial for the operational readiness and sustainment of the F/A-18E/F Super Hornet fleet. By ensuring the supply of necessary ordnance and small arms components, it directly supports the continued production of new aircraft and potentially the sustainment of existing ones. The F/A-18E/F is a key platform for the U.S. Navy, and disruptions in the supply chain for critical parts can impact deployment schedules, training, and overall combat capability. Therefore, securing a consistent supply through this contract is vital for maintaining the fleet's effectiveness and meeting the Navy's strategic objectives.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 326 IBM ROAD BUILDING 862, WILLISTON, VT, 05495

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: $36,292,190

Exercised Options: $36,292,190

Current Obligation: $36,292,190

Actual Outlays: $6,031,393

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $1,184,216

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline