DoD's $945M R&D Contract for Electronics Equipment Shows Questionable Value and Limited Competition
Contract Overview
Contract Amount: $23,318,187 ($23.3M)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2003-10-21
End Date: 2010-06-30
Contract Duration: 2,444 days
Daily Burn Rate: $9.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: 200511!049950!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002404C6201 !A!N! !N! !P00008!20050817!20080930!945837219!945837219!945837219!N!PROGENY SYSTEMS CORPORATION !9500 INNOVATION DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !+000000100000!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541710!E! !3! ! !C! ! !20200930!B! ! !N!Z!D!N!V!1!001!N!5A!Z!Y!Z! ! !N!B!N!N! ! !Z! !A!A!000!D!B!N! ! ! ! !1700!N00024!0001! !
Place of Performance
Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $23.3 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200511!049950!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002404C6201 !A!N! !N! !P00008!20050817!20080930!945837219!945837219!945837219!N!PROGENY SYSTEMS CORPORATION !9500 INNOVATION DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANA… Key points: 1. The contract awarded to PROGENY SYSTEMS CORPORATION for $945,837,219 over 2444 days raises concerns about value for money given the R&D nature. 2. Competition was limited, with a 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method, potentially impacting price discovery. 3. The sector is Research and Development, specifically for Electronics and Communication Equipment, a critical but often high-cost area. 4. Risk factors include potential cost overruns and the effectiveness of R&D outcomes, especially with a Cost Plus Incentive Fee structure.
Value Assessment
Rating: questionable
The contract's value of over $945 million for R&D in electronics and communication equipment is substantial. Benchmarking is difficult without specific deliverables, but the cost per day is high, suggesting a need for rigorous oversight to ensure value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The competition method, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicates that while the process was intended to be open, specific sources were excluded. This limits the competitive landscape and may have influenced the final price.
Taxpayer Impact: The significant expenditure on R&D necessitates careful justification to ensure taxpayer funds are used effectively and efficiently, with clear deliverables and demonstrable technological advancements.
Public Impact
Taxpayers are funding advanced research and development in critical defense electronics, aiming for technological superiority. The contract supports innovation within the defense industrial base, potentially leading to next-generation communication systems. The long duration and high value suggest a significant, long-term investment in a specialized technological area.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may lead to higher costs.
- Cost Plus Incentive Fee contracts can incentivize cost growth.
- R&D outcomes are inherently uncertain and may not yield desired results.
- Long contract duration increases exposure to changing technological needs.
Positive Signals
- Supports critical defense technology development.
- Invests in specialized R&D capabilities.
- Potential for significant technological advancement.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on electronics and communication equipment for the Department of Defense. Spending in this area is crucial for maintaining technological advantage but is also prone to high costs and uncertain outcomes.
Small Business Impact
There is no indication that small businesses were significantly involved in this contract, as it was awarded to a large corporation for a substantial R&D effort. Further analysis would be needed to determine any subcontracting opportunities for small businesses.
Oversight & Accountability
The contract's significant value and R&D focus necessitate robust oversight from the Defense Contract Management Agency (DCMA) to monitor progress, control costs, and ensure the achievement of research objectives. Accountability for R&D outcomes is paramount.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPIF structure.
- Uncertainty of R&D outcomes.
- Limited competition may have inflated prices.
- Long contract duration increases risk exposure.
- Difficulty in benchmarking R&D value.
Tags
research-and-development-in-the-physical, department-of-defense, va, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.3 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200511!049950!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002404C6201 !A!N! !N! !P00008!20050817!20080930!945837219!945837219!945837219!N!PROGENY SYSTEMS CORPORATION !9500 INNOVATION DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !+000000100000!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541710!E! !3! ! !C! ! !202
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 $23.3 million.
What is the period of performance?
Start: 2003-10-21. End: 2010-06-30.
What specific technological advancements or capabilities were expected from this $945 million R&D investment, and how were these measured?
The contract details are limited, but the 'RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV' description suggests a focus on engineering and manufacturing development for advanced electronics and communication equipment. Measuring R&D success often involves milestones like prototype development, testing, and demonstration of new functionalities. Specific metrics would likely be tied to technical performance parameters and the successful integration of developed technologies into existing or future defense systems.
Given the 'limited competition' aspect, what steps were taken to ensure the government received fair and reasonable pricing for this extensive R&D effort?
The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies a justification was made for excluding certain potential bidders. To ensure fair pricing, the contracting agency likely relied on detailed cost proposals, independent cost estimates, and potentially negotiation strategies. The Cost Plus Incentive Fee (CPIF) structure suggests incentives were tied to performance and cost targets, aiming to align contractor and government interests, though CPIF can still lead to cost growth if not managed tightly.
How effective has this contract been in delivering the intended research and development outcomes, and what is the long-term impact on defense capabilities?
Assessing the effectiveness of R&D contracts is challenging due to their inherent uncertainty and long timelines. The contract's period of performance ended in 2010, so its ultimate success would be evaluated based on whether the developed technologies met their objectives and were subsequently fielded or contributed to further advancements. The long-term impact depends on the strategic importance of the developed electronics and communication capabilities to national defense.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
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 INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 9500 INNOVATION DR, MANASSAS, VA, 20110
Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2003-10-21
Current End Date: 2010-06-30
Potential End Date: 2010-06-30 00:00:00
Last Modified: 2015-05-29
More Contracts from General Dynamics Mission Systems, Inc.
- 200410!005969!2100!w15p7t!usa Communications-Electronics !w15p7t04ce405 !A!N! !N! ! !20040716!20111230!046863929!046863929!001381284!n!general Dynamics Decision Syst!8201 E Mcdowell Road !scottsdale !az!85257!65000!013!04!scottsdale !maricopa !arizona !+000010000000!n!n!000000000000!ac63!rdte/Electronics&communication Eq-Adv Tech DEV !A7 !electronics and Communication Equip !360 !jtrs Cluster I !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!b! !A!N!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $1.5B (Department of Defense)
- Federal Contract — $1.4B (Department of Defense)
- THE Space Network (SN) Consists of a Space Segment Comprised of the Tracking and Data Relay Satellites (tdrss), and a Ground Segment (sngs). the SN Provides the Capability for Global Space-To-Ground Telecommunications and Tracking Coverage for LOW Earth Orbit (LEO) and Near-Earth Spaceflight Missions, Including Both Robotic and Human Space Flight. the Sngs Includes Facilities and Systems Located AT the White Sands Complex (WSC) AT LAS Cruces, NM the Guam Remote Ground Terminal (grgt) AT Guam and Space Network Expansion (SNE) East AT Blossom Point, MD. the Purpose of the Sgss Project IS to Implement a Modern Ground Segment That Will Enable the SN to Continue to Deliver High Quality Services to the SN Community, Meet Stakeholder Requirements, and Significantly Reduce Required Operations and Maintenance Resources — $1.2B (National Aeronautics and Space Administration)
- Federal Contract — $1.2B (Department of Defense)
- SDA Tranche 1 Operations and Integration — $861.6M (Department of Defense)
View all General Dynamics Mission Systems, Inc. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)