DoD's $37.7M engineering services contract awarded to General Atomics shows fair value with 2 bidders
Contract Overview
Contract Amount: $37,705,153 ($37.7M)
Contractor: General Atomics
Awarding Agency: Department of Defense
Start Date: 2011-11-02
End Date: 2016-12-31
Contract Duration: 1,886 days
Daily Burn Rate: $20.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121
Plain-Language Summary
Department of Defense obligated $37.7 million to GENERAL ATOMICS for work described as: ENGINEERING SERVICES Key points: 1. Contract awarded for engineering services related to turbine and turbine generator set units. 2. The contract was competed under full and open competition, indicating a broad market approach. 3. Two bids were received, suggesting a moderate level of competition for this requirement. 4. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but also carries risk. 5. Performance occurred over a significant duration of 1886 days. 6. The contract was awarded by the Department of the Navy, a major component of the DoD.
Value Assessment
Rating: fair
The total value of $37.7 million for engineering services over nearly five years suggests a moderate annual spend. Without specific deliverables or comparable contracts for similar engineering services within the turbine and generator set manufacturing sector, a precise value-for-money assessment is challenging. However, the presence of two bidders indicates some market interest, which typically helps in achieving reasonable pricing. The Cost Plus Fixed Fee structure means the government pays actual costs plus a negotiated fixed fee, which can lead to cost overruns if not managed carefully.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. Two bids were received, which suggests that while the competition was open, the number of interested and capable contractors was limited for this specific requirement. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions.
Taxpayer Impact: With two bidders, taxpayers likely benefited from some price competition, though a larger pool of bidders could have potentially driven prices lower. The open competition framework ensures a fair process and prevents favoritism.
Public Impact
The Department of the Navy benefits from specialized engineering services for its turbine and generator set units. This contract supports the maintenance, upgrade, or development of critical power generation equipment. The services provided likely contribute to the operational readiness of naval assets. The contract's impact on the workforce is primarily within the engineering and technical fields employed by General Atomics and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can lead to higher final costs if not rigorously managed.
- Limited competition (2 bidders) may have resulted in a higher price than if more firms had competed.
- The long duration of the contract (1886 days) increases the risk of scope creep or changing requirements.
Positive Signals
- Awarded under full and open competition, ensuring a fair and accessible process.
- General Atomics is a known entity in defense contracting, suggesting a degree of reliability.
- The contract addresses a specific need for engineering services related to critical equipment.
Sector Analysis
The engineering services sector supporting defense manufacturing is substantial, with significant government spending allocated to maintaining and upgrading complex systems like turbines and generators. This contract falls within the broader aerospace and defense industry, specifically supporting naval aviation or vessel power systems. Benchmarking requires comparison to similar specialized engineering support contracts within the DoD, which often involve high technical expertise and long-term sustainment.
Small Business Impact
There is no indication that this contract included small business set-asides, nor is there information on subcontracting plans for small businesses. As a large contract awarded to a major defense contractor, the primary focus is likely on the prime contractor's capabilities. Further investigation would be needed to determine the extent of small business participation through subcontracting.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed reporting of costs and progress. Transparency is generally maintained through contract awards databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Naval Ship Systems Engineering Support
- Aerospace Engineering Services
- Defense Turbine Maintenance Contracts
- Power Generation Equipment Support
- Department of Defense Engineering Services
Risk Flags
- Cost Plus Fixed Fee contract type
- Limited number of bidders received
- Long contract duration
Tags
defense, department-of-the-navy, engineering-services, turbine-generator-sets, full-and-open-competition, definitive-contract, cost-plus-fixed-fee, california, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.7 million to GENERAL ATOMICS. ENGINEERING SERVICES
Who is the contractor on this award?
The obligated recipient is GENERAL ATOMICS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $37.7 million.
What is the period of performance?
Start: 2011-11-02. End: 2016-12-31.
What is the track record of General Atomics with the Department of the Navy for similar engineering services?
General Atomics has a significant history of contracting with the Department of Defense, including the Navy, primarily known for its work in unmanned aerial systems (e.g., Predator, Reaper) and nuclear technologies. While this specific contract focuses on engineering services for turbine and turbine generator set units, the company's broader experience in complex defense systems suggests a capacity for handling sophisticated engineering requirements. Analyzing their past performance on similar, albeit potentially different, types of engineering support contracts would provide further insight into their reliability, technical proficiency, and ability to manage costs and schedules effectively within the naval domain. Specific data on past performance metrics, such as CPARS ratings for comparable contracts, would be crucial for a comprehensive assessment.
How does the $37.7 million value compare to similar engineering services contracts for turbine and generator sets?
Benchmarking the $37.7 million value requires identifying comparable contracts for engineering services specifically related to turbine and turbine generator set units within the defense sector. The duration of this contract (1886 days, approximately 5.1 years) means the average annual value is around $7.4 million. This figure needs to be compared against contracts of similar scope, complexity, and duration awarded by the Navy or other military branches. Factors such as the specific type of turbine (e.g., gas, steam), the application (e.g., ship propulsion, power generation), and the nature of the engineering services (e.g., design, maintenance, upgrade, testing) are critical for a valid comparison. Without access to a detailed database of comparable contracts with specific service descriptions, it is difficult to definitively state whether $37.7 million represents excellent, fair, or questionable value.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to General Atomics, revolve around cost control and potential for contractor inefficiency. While the fixed fee provides the contractor with an incentive to control costs to maximize profit, the government bears the risk of all allowable costs. If costs escalate beyond initial estimates, the government pays more, potentially exceeding the anticipated value. Contractors may also have less incentive to innovate cost-saving measures compared to fixed-price contracts. For the government, effective oversight is paramount to ensure that costs are reasonable, allocable, and allowable, and that the fixed fee adequately compensates the contractor for the effort without being excessive. Scope creep is another significant risk, as changes to the project's scope can lead to adjustments in both costs and the fixed fee, requiring careful negotiation and documentation.
What does the 'Turbine and Turbine Generator Set Units Manufacturing' (NAICS 336412) classification imply for this contract?
The NAICS code 336412, 'Turbine and Turbine Generator Set Units Manufacturing,' indicates that the engineering services procured under this contract are directly related to the production, maintenance, or enhancement of turbine and generator systems. This suggests the contract could involve activities such as design support for new units, troubleshooting and repair engineering for existing equipment, performance analysis, upgrade engineering to improve efficiency or lifespan, or testing and validation services. The classification implies a focus on the physical hardware of these power generation components, requiring specialized engineering knowledge in thermodynamics, mechanical engineering, electrical engineering, and materials science relevant to turbine technology.
How does the contract's duration (1886 days) impact its overall risk profile?
The contract's duration of 1886 days (approximately 5.1 years) significantly impacts its risk profile by increasing the potential for evolving requirements, technological obsolescence, and contractor performance degradation over time. Longer contracts require more robust change management processes to handle modifications to scope, schedule, or technical specifications. There is also a higher likelihood that the technology underpinning the engineering services could advance, potentially making the original contract objectives less relevant or requiring costly updates. Furthermore, maintaining consistent oversight and performance management over such an extended period can be challenging for the contracting agency. From a financial perspective, a longer duration means a larger total commitment, necessitating sustained budget allocation and increasing the exposure to potential cost overruns if not managed diligently.
Industry Classification
NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 3550 GENERAL ATOMICS CT, SAN DIEGO, CA, 92121
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $37,705,153
Exercised Options: $37,705,153
Current Obligation: $37,705,153
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $124,919
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-11-02
Current End Date: 2016-12-31
Potential End Date: 2016-12-31 00:00:00
Last Modified: 2017-01-24
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