DoD's $40.7M engineering services contract awarded to General Dynamics Mission Systems, Inc. without competition

Contract Overview

Contract Amount: $40,715,271 ($40.7M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-10-16

End Date: 2019-09-15

Contract Duration: 2,160 days

Daily Burn Rate: $18.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ENGINEERING SERVICES BASE YEAR

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: ENGINEERING SERVICES BASE YEAR Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The 'Research and Development in the Physical, Engineering, and Life Sciences' category suggests a focus on innovation, but the lack of competition may stifle it. 3. A Cost Plus Fixed Fee (CPFF) contract type can incentivize cost control, but oversight is crucial given the sole-source nature. 4. The contract duration of 2160 days (6 years) indicates a long-term need for these specialized engineering services. 5. The absence of small business set-asides suggests the primary contractor is expected to handle the entire scope, potentially limiting subcontracting opportunities. 6. The contract's performance period spans from 2013 to 2019, providing historical data for future benchmarking.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific R&D focus. Without competitive bids, it's difficult to ascertain if the fixed fee accurately reflects market rates for similar engineering services. The CPFF structure requires careful monitoring of costs to ensure value for money, especially given the extended duration. The lack of publicly available comparable contract data for this specific R&D niche makes a direct price comparison difficult.

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. This approach is typically used when only one vendor possesses the unique capabilities or technology required for the service. The lack of competition means there was no price discovery through a bidding process, potentially leading to higher costs for the government compared to a competitive award.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure. The government did not benefit from the potential cost savings that typically arise from multiple bidders vying for a contract.

Public Impact

The primary beneficiaries are likely the Department of Defense and its associated research and development initiatives, receiving specialized engineering support. The services delivered are in the realm of physical, engineering, and life sciences R&D, contributing to technological advancements. The geographic impact is primarily within the United States, supporting federal research objectives. Workforce implications include employment for highly skilled engineers and technical personnel within General Dynamics Mission Systems, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially reduces value for money.
Lack of transparency in the justification for sole-source award.
CPFF contract type requires robust oversight to manage costs effectively.
Long contract duration could lead to cost escalation if not managed properly.

Positive Signals

Award to a known entity (General Dynamics) may indicate a reliance on established expertise.
Fixed fee component provides some cost predictability.
Contract supports critical R&D efforts for national security.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, often characterized by specialized expertise and high barriers to entry. The market for such services is typically dominated by large, established defense contractors with proven track records in complex R&D projects. Benchmarking spending in this area is difficult due to the unique nature of R&D and the proprietary information involved.

Small Business Impact

The contract was not competed and there is no indication of small business set-asides. This suggests that the primary contractor, General Dynamics Mission Systems, Inc., is expected to perform the majority of the work. There is a missed opportunity for small businesses to participate in subcontracting roles, which could have provided them with valuable experience and revenue. The impact on the small business ecosystem is likely minimal for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring detailed reporting and auditing of costs. Transparency is limited due to the sole-source nature and the classification of R&D activities. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Engineering Services Contracts
Cost Plus Fixed Fee Contracts
Sole Source Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (CPFF)
Limited transparency on R&D specifics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. ENGINEERING SERVICES BASE YEAR

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 $40.7 million.

What is the period of performance?

Start: 2013-10-16. End: 2019-09-15.

What specific R&D projects did this contract support for the Department of Defense?

The provided data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' and was awarded to General Dynamics Mission Systems, Inc. However, the specific projects or research areas are not detailed in the available information. Such contracts often support advancements in areas like materials science, advanced manufacturing, sensor technology, or complex system integration critical for defense applications. Without further classification details or project descriptions, pinpointing the exact R&D focus remains speculative. The duration of the contract (2013-2019) suggests it supported ongoing research efforts rather than a single, short-term project.

How does the $40.7 million base year cost compare to similar R&D engineering services contracts?

Directly comparing the $40.7 million base year cost to similar R&D engineering services contracts is challenging due to several factors. Firstly, the contract was sole-sourced, meaning there was no competitive bidding to establish a market price. Secondly, the specific nature of 'Research and Development in the Physical, Engineering, and Life Sciences' can vary immensely in scope, complexity, and required expertise, making direct comparisons difficult. Contracts in this domain can range from fundamental research to applied engineering for specific defense systems. Without knowing the precise deliverables and the level of innovation required, a benchmark is hard to establish. However, for large-scale, multi-year R&D efforts by major defense contractors, this figure is within a plausible range, though the lack of competition prevents a definitive value assessment.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee contract for R&D?

The primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract for R&D are multifaceted. For sole-source, the main risk is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate efficiently. The government does not benefit from price discovery. For CPFF, the risk lies in cost overruns. While the fee is fixed, the government bears the cost of all allowable expenses. If the contractor's cost estimation is poor or if unforeseen technical challenges arise (common in R&D), the total contract cost can escalate significantly. Robust government oversight, detailed cost tracking, and clear performance metrics are essential to mitigate these risks. The combination of sole-source and CPFF amplifies the need for stringent management and oversight to ensure value for taxpayer money.

What was the justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for awarding this contract on a sole-source basis. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or when there is a compelling urgency, or for follow-on work to a previous competitive procurement where only the original contractor can meet the requirements. For R&D contracts, justifications often cite unique technical capabilities, proprietary data, or the need for specialized expertise that only a single entity possesses. Without the official justification document (e.g., a Justification and Approval - J&A), the exact reasoning remains unknown.

How has spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' category evolved since this contract's award?

Spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' category has generally seen fluctuations driven by national priorities, technological advancements, and budget allocations. Since the award period of this contract (2013-2019), overall federal R&D spending has continued, with significant investments in areas like artificial intelligence, cybersecurity, advanced materials, and biotechnology, which fall under this broad NAICS code. The Department of Defense remains a major funder of R&D within this sector. While specific year-over-year trends require detailed budget analysis, the importance of this category for maintaining technological superiority and addressing national security challenges suggests sustained or increasing investment, albeit subject to appropriations and strategic shifts.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002413R6263

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: $42,829,454

Exercised Options: $42,031,484

Current Obligation: $40,715,271

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $7,519,225

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline