Naval Sea Systems Command awards $169M contract for AN/SQQ-89 Sonar systems, with a significant portion for R&D

Contract Overview

Contract Amount: $44,903,007 ($44.9M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2001-09-29

End Date: 2008-12-31

Contract Duration: 2,650 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200112!018634!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6316 !A!N!*!N!BASIC !20010929!20061230!153245857!153245857!153245857!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000001429982!N!N!000000000000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2GSS!AN/SQQ-89 SONAR !541330!*!*!3! ! ! !*!*!*!B!*!*!N!Z!A !N!U!2!001!K! !A!Y!Z! ! !N!B!N!N! ! !A! !B!A!000!D!B!N! ! ! !Y! ! !0001!

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $44.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200112!018634!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6316 !A!N!*!N!BASIC !20010929!20061230!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 focuses heavily on research, development, testing, and evaluation (RDTE) for advanced sonar capabilities. 2. The contract was awarded under full and open competition after exclusion of sources, indicating a competitive process. 3. A substantial portion of the contract value is allocated to research and development, suggesting innovation and future capability development. 4. The primary contractor, Digital System Resources, Inc., is tasked with delivering complex electronic and communication equipment. 5. The contract duration spans nearly 9 years, indicating a long-term need for these sonar systems. 6. The contract value of $169.46 million represents a significant investment in naval defense technology.

Value Assessment

Rating: good

The contract value of $169.46 million for a nearly 9-year duration appears reasonable given the R&D component. Benchmarking against similar complex defense systems development contracts would provide further insight into value for money. The cost-plus-fixed-fee (CPFF) pricing structure allows for flexibility in R&D but requires careful oversight to manage costs effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This suggests that while the initial solicitation may have had specific requirements that excluded some potential bidders, the subsequent competition was open to all qualified sources. The number of bidders is not specified, but this type of competition generally fosters price discovery and encourages competitive pricing.

Taxpayer Impact: This competitive approach aims to ensure that taxpayer funds are used efficiently by driving down costs through market forces, leading to better value for the government.

Public Impact

The primary beneficiaries are the U.S. Navy, which will receive advanced sonar systems for its vessels. The contract supports the development and delivery of critical electronic and communication equipment, specifically the AN/SQQ-89 Sonar system. The geographic impact is primarily within the United States, with the contractor located in Fairfax, Virginia. The contract implies a need for skilled labor in research, development, engineering, and manufacturing of advanced defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed diligently.
The long duration of the contract increases the risk of scope creep or changes in technological requirements.
Reliance on a single primary contractor for such a critical system warrants close monitoring of performance and financial stability.

Positive Signals

The contract is awarded under full and open competition, suggesting a robust selection process.
The significant R&D component indicates investment in cutting-edge technology for national security.
The contract duration suggests a stable, long-term commitment to a critical defense capability.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the development and procurement of advanced electronic and communication equipment for naval applications. The market for defense electronics, particularly sonar and related systems, is characterized by high technological barriers to entry, significant R&D investment, and long procurement cycles. Comparable spending benchmarks would involve other major defense acquisition programs for naval platforms and their associated sensor systems.

Small Business Impact

The provided data indicates that small business participation was not a primary set-aside for this contract (ss: false, sb: false). While there's no explicit small business set-aside, the prime contractor may engage small businesses as subcontractors for specialized components or services. The impact on the small business ecosystem would depend on the extent of subcontracting opportunities generated by Digital System Resources, Inc.

Oversight & Accountability

Oversight for this contract would typically be managed by the Naval Sea Systems Command (NAVSEA) and potentially the Defense Contract Management Agency (DCMA). Accountability measures would be embedded in the contract's terms, including performance metrics, delivery schedules, and financial reporting. Transparency is generally maintained through contract awards databases and reporting requirements, though specific R&D details may be sensitive.

Related Government Programs

AN/SQQ-89 Sonar System
Naval Combat Systems
Defense Research and Development
Electronic Warfare Systems
Naval Ship Modernization Programs

Risk Flags

Cost Overrun Risk (CPFF contract type)
Long Contract Duration Risk
Technological Obsolescence Risk
Contractor Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200112!018634!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6316 !A!N!*!N!BASIC !20010929!20061230!153245857!153245857!153245857!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000001429982!N!N!000000000000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2GSS!AN/SQQ-89 SONAR !541330!*!*!3! ! ! !*!*!*!B!*!*!N!

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 $44.9 million.

What is the period of performance?

Start: 2001-09-29. End: 2008-12-31.

What is the historical spending trend for the AN/SQQ-89 Sonar system program?

Analyzing historical spending for the AN/SQQ-89 Sonar system program requires access to detailed contract databases beyond the single award provided. However, the duration of this contract (2001-2008) suggests a sustained investment in this capability. Typically, such programs involve multiple contract awards over their lifecycle for development, production, upgrades, and sustainment. Without broader data, it's difficult to establish a precise trend, but the significant value and long duration of this specific award indicate a consistent and substantial commitment by the Navy to this sonar technology over that period.

How does the per-unit cost of the AN/SQQ-89 Sonar system compare to similar systems?

Determining a precise per-unit cost for the AN/SQQ-89 Sonar system is challenging with the provided data, as the contract value ($169.46 million) covers research, development, and potentially a limited number of units over a long period, rather than a straightforward production run. Furthermore, the 'AN/SQQ-89' designation likely encompasses various configurations and upgrades. To benchmark effectively, one would need to identify comparable sonar systems procured by other naval forces or for different platforms, and then compare their total contract values against the number of units delivered or the scope of work. This contract's R&D focus suggests its cost structure may differ significantly from purely production-oriented contracts.

What are the key performance indicators (KPIs) for this contract, and how has the contractor performed against them?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific contract. However, for a contract involving Research, Development, Testing, and Evaluation (RDTE) of complex electronic systems like the AN/SQQ-89 Sonar, typical KPIs would likely include adherence to technical specifications, successful completion of testing phases, on-time delivery of prototypes or system components, and effective management of research objectives. Performance against these would be documented in contract performance reports, which are not publicly available in this dataset. The contract's completion within its scheduled timeframe (2001-2008) suggests a degree of successful performance, but detailed metrics would require access to official performance evaluations.

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

Digital System Resources, Inc. (DSR) has a history of engaging in defense-related contracts, particularly in the realm of electronics and communication systems. While this specific award for the AN/SQQ-89 Sonar is substantial, DSR's broader track record would need to be assessed through comprehensive contract databases. Information regarding their performance on previous contracts, their financial stability, and their technical expertise in areas relevant to sonar technology would be crucial. A review of past performance ratings, any contract disputes, and the types of systems they have previously developed or supplied would provide a clearer picture of their capabilities and reliability as a contractor for complex defense programs.

What are the potential risks associated with the cost-plus-fixed-fee (CPFF) pricing structure used in this contract?

The Cost-Plus-Fixed-Fee (CPFF) pricing structure, used in this contract, presents specific risks. While it allows flexibility for research and development where costs can be uncertain, it shifts some of the cost risk to the government. The 'cost-plus' element means the government reimburses the contractor for allowable costs incurred. The 'fixed-fee' is the contractor's profit, which is fixed regardless of the final cost. The primary risk for the government is that the contractor may have less incentive to control costs rigorously compared to a fixed-price contract, potentially leading to higher overall expenditures. Effective oversight, detailed cost accounting, and clear definition of allowable costs are critical to mitigate this risk.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: YES

Timeline