DoD awards $57.2M for shipboard maintenance software, but competition was limited

Contract Overview

Contract Amount: $57,218,582 ($57.2M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-09-12

End Date: 2019-01-31

Contract Duration: 1,967 days

Daily Burn Rate: $29.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CONTINUED SUPPORT OF THE INTEGRATED SHIPBOARD/SHORE-BASED MAINTENANCE DECISION TOOL. 25 SOFTWARE SYSTEM BUILDS AND ENGINEERING SERVICES.

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $57.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: CONTINUED SUPPORT OF THE INTEGRATED SHIPBOARD/SHORE-BASED MAINTENANCE DECISION TOOL. 25 SOFTWARE SYSTEM BUILDS AND ENGINEERING SERVICES. Key points: 1. Contract provides essential software and engineering services for naval maintenance decision tools. 2. Limited competition raises concerns about potential overpayment and lack of innovative solutions. 3. Contract duration of nearly 2,000 days suggests a long-term need for these services. 4. The use of a Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed carefully. 5. This contract supports critical naval operations, highlighting its strategic importance. 6. The absence of small business set-asides may limit opportunities for smaller innovative firms.

Value Assessment

Rating: fair

The contract value of $57.2 million over approximately 1967 days averages to roughly $29,000 per day. Without specific benchmarks for similar integrated shipboard/shore-based maintenance decision tools, it is difficult to definitively assess value for money. The CPFF contract type, while allowing flexibility, can be less cost-effective than fixed-price contracts if costs are not rigorously controlled. The lack of competition further complicates a direct value assessment.

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 Mission Systems, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified for unique capabilities or urgent needs, they often result in higher prices and reduced innovation due to the absence of market pressure.

Taxpayer Impact: Taxpayers may have paid a premium for this system due to the lack of competitive bidding. Without competing the requirement, there is less assurance that the government secured the best possible price and terms.

Public Impact

Naval personnel benefit from improved decision-making capabilities for shipboard and shore-based maintenance. Software system builds and engineering services are delivered, enhancing the operational readiness of naval assets. The geographic impact is primarily on naval bases and deployed vessels globally. Workforce implications include the need for skilled software engineers and maintenance personnel to utilize and support the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risks of cost overruns if not closely monitored.
Lack of competition may stifle innovation and prevent the adoption of potentially superior alternative solutions.
Contract duration is substantial, requiring sustained oversight to ensure continued value.

Positive Signals

Contract supports critical defense capabilities, ensuring operational readiness.
General Dynamics Mission Systems is a known entity in defense contracting, suggesting a level of established capability.
The contract addresses a specific need for integrated maintenance decision tools, indicating a focused requirement.

Sector Analysis

The defense sector, particularly naval operations, relies heavily on sophisticated software for maintenance planning and execution. This contract falls within the Engineering Services category (NAICS 541330). The market for such specialized defense software is often characterized by a limited number of large prime contractors capable of meeting stringent security and performance requirements. Spending in this area is driven by the need to maintain aging fleets and ensure technological superiority.

Small Business Impact

This contract does not appear to have included small business set-asides. The sole-source nature of the award means that opportunities for small businesses to participate as prime contractors or even significant subcontractors were likely limited. This could represent a missed opportunity to foster innovation and competition within the small business defense contracting ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The CPFF structure necessitates close financial oversight to prevent cost creep. Transparency is generally limited in sole-source awards, but contract modifications and performance reports would be subject to internal government review. Inspector General involvement would be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Programs
Defense Logistics and Maintenance Systems
Fleet Readiness Programs
Department of Defense Software Development Contracts

Risk Flags

Sole-source award
Potential for cost overruns (CPFF contract type)
Lack of competitive pricing pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. CONTINUED SUPPORT OF THE INTEGRATED SHIPBOARD/SHORE-BASED MAINTENANCE DECISION TOOL. 25 SOFTWARE SYSTEM BUILDS AND ENGINEERING SERVICES.

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 $57.2 million.

What is the period of performance?

Start: 2013-09-12. End: 2019-01-31.

What is the track record of General Dynamics Mission Systems, Inc. with similar sole-source contracts for the Department of Defense?

General Dynamics Mission Systems, Inc. (GDMS) is a significant defense contractor with a long history of providing complex systems and services to the DoD. They frequently engage in sole-source or limited-competition contracts, particularly for specialized or integrated solutions where their existing expertise or proprietary technology is deemed essential. Analyzing GDMS's past performance on similar sole-source awards would involve reviewing contract histories for cost overruns, schedule delays, and the quality of deliverables. While their established presence suggests capability, the lack of competition in those instances, as with this contract, warrants scrutiny regarding pricing and value compared to what might be achieved through open competition.

How does the $57.2 million contract value compare to other DoD spending on maintenance decision tools?

Directly comparing the $57.2 million value without knowing the specific scope, duration, and complexity of other maintenance decision tools is challenging. However, the average annual value of this contract is approximately $10.5 million ($57.2M / 5.5 years). This figure can be benchmarked against other DoD software development and engineering services contracts. Given that this is a sole-source award for an integrated system, it is plausible that the price could be higher than a competitively procured, less complex solution. Further analysis would require identifying comparable systems and their procurement costs.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used here?

The primary risk of a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to incur costs, as their fee remains constant regardless of the total cost. If the government's cost accounting and oversight are not rigorous, there is a significant risk of cost overruns, as the contractor may not have a strong financial incentive to control expenses. The fixed fee, however, does provide some predictability regarding profit.

How effective are integrated shipboard/shore-based maintenance decision tools in improving naval readiness?

Integrated shipboard and shore-based maintenance decision tools are designed to optimize maintenance scheduling, resource allocation, and predictive maintenance, thereby significantly enhancing naval readiness. By providing a unified view of equipment status, maintenance history, and repair needs across deployed vessels and shore facilities, these systems aim to reduce downtime, minimize operational disruptions, and extend the lifespan of critical assets. Their effectiveness is contingent on accurate data input, robust analytical capabilities, and seamless integration with existing naval IT infrastructure. Successful implementation leads to more efficient maintenance operations and improved fleet availability.

What is the historical spending trend for engineering services related to naval maintenance software within the Department of Defense?

Historical spending on engineering services for naval maintenance software within the DoD has generally trended upwards, reflecting the increasing complexity of naval platforms and the growing reliance on advanced digital solutions. The Navy, in particular, invests heavily in systems that enhance operational efficiency, predictive maintenance, and lifecycle management. While specific figures fluctuate based on modernization cycles and budget allocations, there has been a consistent demand for software development, system integration, and engineering support to maintain and upgrade these critical tools. This particular contract, awarded in 2013 and ending in 2019, falls within a period of significant investment in naval IT modernization.

Could alternative, more competitive procurement strategies have yielded better results for this requirement?

It is highly probable that alternative, more competitive procurement strategies could have yielded better results. A full and open competition would have allowed multiple vendors to propose solutions, driving down prices through market forces and potentially introducing innovative approaches. Even a partial small business set-aside could have fostered competition and provided opportunities for specialized firms. The sole-source nature of this award suggests that either a justification for limited competition was weak, or the requirement was not adequately defined early enough to allow for broader market engagement. Re-evaluating the need for a sole-source award and exploring competitive options for future requirements is advisable.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002412R6253

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 9500 INNOVATION DR, MANASSAS, VA, 20110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $63,680,859

Exercised Options: $57,218,582

Current Obligation: $57,218,582

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $3,614,753

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline