DoD's $612M MK 54 Torpedo Production Contract Awarded to General Dynamics Mission Systems
Contract Overview
Contract Amount: $61,201,302 ($61.2M)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2016-08-31
End Date: 2021-08-31
Contract Duration: 1,826 days
Daily Burn Rate: $33.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MK 54 MOD 1 LWT PRODUCTION KITS
Place of Performance
Location: CHARLEROI, WASHINGTON County, PENNSYLVANIA, 15022
Plain-Language Summary
Department of Defense obligated $61.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: MK 54 MOD 1 LWT PRODUCTION KITS Key points: 1. Significant investment in naval defense capabilities. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long-term contract (5 years) suggests ongoing need and potential for future modifications. 4. Focus on specialized maritime systems manufacturing.
Value Assessment
Rating: questionable
The contract value of $612 million over five years is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential alternatives or if it reflects the best possible pricing achievable through a competitive process.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a fully competed contract where multiple vendors vie for the business.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the most cost-effective solution, potentially leading to overspending on this defense procurement.
Public Impact
Ensures continued availability of critical torpedo systems for naval operations. Supports a major defense contractor and its supply chain. Impacts the strategic readiness of the U.S. Navy's submarine and surface fleets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Cost-plus contract type
Positive Signals
- Critical defense system procurement
- Long-term contract stability
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is crucial for national defense, but often involves specialized, high-cost components and limited vendor pools.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this sole-source contract. The primary contractor, General Dynamics Mission Systems, is a large entity, suggesting limited direct opportunities for small businesses unless they are subcontractors.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure cost reasonableness and performance. The Department of the Navy must actively monitor expenditures and contractor performance to mitigate risks associated with non-competitive awards.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type may lead to higher costs.
- Lack of transparency on price justification.
- Potential for cost overruns.
- Limited small business participation indicated.
Tags
search-detection-navigation-guidance-aer, department-of-defense, pa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. MK 54 MOD 1 LWT PRODUCTION KITS
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $61.2 million.
What is the period of performance?
Start: 2016-08-31. End: 2021-08-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of adequate competition. The Department of the Navy should have conducted a thorough market research analysis to confirm these conditions. Price reasonableness is usually assessed through cost analysis, comparison to similar historical contracts, or independent government cost estimates, even in sole-source situations.
What are the potential risks associated with a cost-plus fixed fee contract for a production run of this magnitude?
Cost-plus contracts, especially fixed fee, can incentivize contractors to increase costs as their fee is a percentage of the total cost. While the fixed fee provides some control, the government bears the risk of cost overruns. For a production run of this scale, effective cost monitoring and control by the government are crucial to prevent excessive spending and ensure value for money.
How does the performance and cost of the MK 54 MOD 1 compare to previous versions or alternative systems, and what is the long-term strategy for its sustainment?
Assessing performance and cost against alternatives is challenging without competitive data. However, the Navy likely has internal metrics and historical data to evaluate the MK 54's effectiveness. The long-term strategy for sustainment would involve ongoing maintenance, potential upgrades, and future procurement plans, all of which should be scrutinized for cost-efficiency and strategic alignment.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002414R6407
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Wico Limited
Address: 9500 INNOVATION DR, MANASSAS, VA, 20110
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $65,833,390
Exercised Options: $65,833,390
Current Obligation: $61,201,302
Actual Outlays: $1,071,458
Subaward Activity
Number of Subawards: 64
Total Subaward Amount: $42,564,929
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-08-31
Current End Date: 2021-08-31
Potential End Date: 2021-08-31 00:00:00
Last Modified: 2025-11-20
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