Naval Sea Systems Command awards $153M contract for submarine digital systems, with General Dynamics Mission Systems as prime

Contract Overview

Contract Amount: $33,078,993 ($33.1M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2001-10-01

End Date: 2008-09-30

Contract Duration: 2,556 days

Daily Burn Rate: $12.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200207!015799!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6235 !A!N! !N! !20010508!20020508!153245857!153245857!153245857!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000004823000!N!N!000000000000!1904!SUBMARINES !A7 !ELECTRONICS AND COMMUNICATION !2SDN!SUBMARINE NUCLEAR-SSN !541330!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!U!U!1!001!N!1B!Z!N!Z! ! !N!B!N!N! ! !A! !A!A!000!D!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200207!015799!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6235 !A!N! !N! !20010508!20020508!153245857!153245857!153245857!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRF… Key points: 1. Contract awarded to General Dynamics Mission Systems, Inc. for submarine digital systems. 2. Significant funding allocated for a critical defense capability. 3. Contract duration spans over 7 years, indicating a long-term need. 4. The contract type is 'Cost Plus Fixed Fee', which can carry cost overrun risks. 5. Focus on submarine systems highlights a specialized area within naval defense. 6. The award value is substantial, reflecting the complexity and importance of the systems.

Value Assessment

Rating: fair

The contract value of $153,245,857 over approximately 7 years suggests a significant investment in submarine digital systems. Benchmarking this against similar contracts for complex defense systems is challenging without more specific details on the scope of work. However, the Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher costs than fixed-price contracts if not managed tightly. The absence of a clear per-unit cost makes direct value assessment difficult, but the overall investment indicates a high perceived value by the agency for the capabilities delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. Sole-source awards are typically justified when only one vendor possesses the necessary capabilities, technology, or security clearances, or in cases of urgent need. The lack of competition means that the government did not benefit from a competitive bidding process, which could potentially lead to less favorable pricing and reduced innovation compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing offers, there is less assurance that the price reflects the best possible value achievable in the market.

Public Impact

The primary beneficiaries are the U.S. Navy's submarine fleet, enhancing their operational capabilities. Services delivered include the development and integration of digital systems crucial for submarine operations. The geographic impact is national, supporting naval readiness and defense infrastructure. Workforce implications include specialized engineering and technical roles within General Dynamics Mission Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risks of cost overruns if not closely monitored.
Lack of detailed public information on performance metrics makes it difficult to assess effectiveness.
Long contract duration could lead to technology obsolescence if not managed proactively.

Positive Signals

Award to a known defense contractor, General Dynamics Mission Systems, suggests established capabilities.
Focus on critical submarine systems indicates support for a high-priority national security asset.
Contract duration implies a stable, long-term commitment to developing and maintaining essential capabilities.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on IT and engineering services for naval platforms. The market for specialized defense systems, particularly for submarines, is highly concentrated, with a few large prime contractors dominating. Spending in this area is driven by national security priorities and the need for advanced technological capabilities. Comparable spending benchmarks would likely be found within other major naval shipbuilding and systems integration contracts, which often run into hundreds of millions or billions of dollars.

Small Business Impact

The contract data indicates that this was not a small business set-aside. As a sole-source award to a large prime contractor, there is a potential for subcontracting opportunities for small businesses. However, the extent to which small businesses will participate depends on the prime contractor's subcontracting plan and the specific needs of the digital system development. Without explicit set-aside goals, the direct impact on the small business ecosystem is uncertain and relies heavily on the prime's procurement practices.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) and the Naval Sea Systems Command (NAVSEA). Accountability measures would include contract performance reviews, milestone tracking, and financial audits, particularly given the Cost Plus Fixed Fee structure. Transparency is limited due to the sole-source nature and the classified aspects often associated with submarine technology. Inspector General involvement would be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Submarine Modernization Programs
Defense IT Systems Development
General Dynamics Mission Systems Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award may limit price competition.
Cost Plus Fixed Fee contract type carries potential for cost overruns.
Limited public information on specific system details and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200207!015799!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6235 !A!N! !N! !20010508!20020508!153245857!153245857!153245857!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000004823000!N!N!000000000000!1904!SUBMARINES !A7 !ELECTRONICS AND COMMUNICATION !2SDN!SUBMARINE NUCLEAR-SSN !541330!E! !3! ! ! ! ! !99990909!B

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 $33.1 million.

What is the period of performance?

Start: 2001-10-01. End: 2008-09-30.

What specific digital systems are being developed or integrated under this contract?

The provided data indicates the contract is for 'DIGITAL SYSTEM RESOURCES, INC' and relates to 'SUBMARINES'. While the specific nature of the digital systems is not detailed in the extract, it likely pertains to command, control, communication, computer, intelligence, surveillance, and reconnaissance (C4ISR) systems, combat systems, or platform management systems essential for modern submarine operations. These systems are critical for navigation, threat detection, weapons deployment, and overall mission effectiveness. The 'SUBMARINES' and 'SUBMARINE NUCLEAR-SSN' classifications suggest a focus on advanced capabilities for attack submarines.

How does the $153 million award value compare to other submarine digital system contracts?

Direct comparison of the $153 million award value is difficult without knowing the precise scope and duration of comparable contracts. However, major defense programs, especially those involving complex platforms like submarines, often involve multi-year contracts worth hundreds of millions or even billions of dollars. This $153 million contract, spanning from 2001 to 2008 (approximately 7 years), represents a significant but not extraordinary investment for a specific subsystem or technology area within the broader submarine program. It suggests a substantial upgrade or development effort for critical digital components.

What are the risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this program?

The CPFF contract type means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. The primary risk for the government is that the final cost can exceed initial estimates, as the contractor is incentivized to incur costs to achieve the fixed fee, without a direct cap on total expenditure unless specific ceiling clauses are included. This can lead to cost overruns if the project scope expands or unforeseen technical challenges arise. Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are crucial to mitigate these risks and ensure value for money.

What is the track record of Digital System Resources, Inc. in similar defense contracts?

The provided data lists 'DIGITAL SYSTEM RESOURCES, INC' as the contractor with a specific address in Fairfax, VA. However, the extract does not provide details on their historical performance, past contracts, or specific expertise beyond what can be inferred from this single award. To assess their track record, one would need to examine their contract history, past performance evaluations (if publicly available), and their overall financial stability and technical capabilities in delivering complex digital systems for defense applications, particularly within the naval sector.

What are the implications of this contract being sole-source for future competition?

A sole-source award suggests that for this specific requirement, there were limited or no viable alternative sources identified by the agency at the time of award. This could be due to proprietary technology, unique expertise, or specific integration requirements. For future procurements related to these digital systems, the agency might continue with sole-source awards if the situation persists, or they might actively work to broaden the competitive base by encouraging new entrants or developing alternative solutions. However, a history of sole-source awards can sometimes make it harder to introduce competition later.

How does this spending align with overall trends in naval defense spending on digital systems?

Spending on digital systems, including C4ISR, cybersecurity, and platform automation, has been a growing trend in naval defense for decades. This contract, awarded in the early 2000s, reflects the increasing reliance on digital technology for modern warfare capabilities. The investment in submarine digital systems aligns with the broader naval strategy of maintaining technological superiority in critical areas. Trends indicate a continued and likely increasing allocation of defense budgets towards advanced digital and cyber capabilities across all military branches.

Industry Classification

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

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 12450 FAIR LAKES CIR STE 800, FAIRFAX, VA, 22033

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline