DoD awards $201.5M contract for MK54 MOD1 LWT KITS LRIP to General Dynamics
Contract Overview
Contract Amount: $201,453,688 ($201.5M)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2018-08-22
End Date: 2026-09-30
Contract Duration: 2,961 days
Daily Burn Rate: $68.0K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: MK54 MOD1 LWT KITS LRIP
Place of Performance
Location: CHARLEROI, WASHINGTON County, PENNSYLVANIA, 15022
Plain-Language Summary
Department of Defense obligated $201.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: MK54 MOD1 LWT KITS LRIP Key points: 1. Contract awarded to General Dynamics Mission Systems, Inc. for $201.5 million. 2. The contract is for MK54 MOD1 LWT KITS LRIP, with a long performance period extending to September 2026. 3. Ammunition manufacturing sector, specifically for naval applications. 4. The contract was not available for competition, raising potential concerns about price discovery.
Value Assessment
Rating: fair
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed carefully. The awarded amount is substantial, and without competitive bidding, it's difficult to assess if the price is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a limited source selection. This lack of competition may hinder effective price discovery and potentially lead to higher costs for the government.
Taxpayer Impact: The significant contract value suggests a considerable taxpayer investment. The absence of competition warrants scrutiny to ensure the best value is achieved.
Public Impact
Naval readiness and defense capabilities are directly impacted by the supply of these critical kits. The long-term nature of the contract suggests a sustained need for this specific equipment. Potential for cost increases due to the lack of competitive bidding could impact overall defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Incentive Fee contract type
- Long performance period
Positive Signals
- Definitive contract award
- Specific product for naval defense
Sector Analysis
This contract falls within the defense sector, specifically ammunition manufacturing. Defense spending benchmarks for similar specialized kits are often high due to R&D and specialized production requirements.
Small Business Impact
The contract was awarded to General Dynamics Mission Systems, Inc., a large business. There is no indication of small business participation in this specific award.
Oversight & Accountability
The definitive contract award and long performance period suggest a need for robust oversight to ensure performance milestones are met and costs are managed effectively, especially given the limited competition.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Limited competition
- Potential for cost overruns with CPIF
- Long-term commitment without competitive pressure
- Lack of small business participation
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $201.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. MK54 MOD1 LWT KITS LRIP
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 $201.5 million.
What is the period of performance?
Start: 2018-08-22. End: 2026-09-30.
What is the justification for limiting competition on this contract, and how does the government ensure fair pricing without competitive bids?
The justification for limiting competition is not provided in the data. Typically, such limitations are based on factors like unique capabilities, urgent needs, or existing sole-source relationships. The government aims to ensure fair pricing through mechanisms like cost realism analyses, negotiation of incentive fee structures, and comparison to historical pricing or independent cost estimates, though these are less effective than open competition.
What are the potential risks associated with a Cost Plus Incentive Fee contract for ammunition manufacturing, especially with limited competition?
Cost Plus Incentive Fee (CPIF) contracts can incentivize contractors to control costs, but they also carry risks. If the target cost or incentive structure is not well-defined, the government might end up paying more than necessary. With limited competition, the contractor has less pressure to be efficient, potentially leading to higher costs and reduced value for taxpayer money. There's also a risk of scope creep or performance issues if oversight is insufficient.
How does the long performance period (until 2026) impact the overall value and effectiveness of this contract for the Department of the Navy?
A long performance period can provide stability and ensure a consistent supply of critical components like the MK54 MOD1 LWT KITS LRIP, which is vital for naval operations. It can also allow for economies of scale and potentially lower per-unit costs over time. However, it also ties the government to a specific supplier and price for an extended duration, potentially missing out on better technologies or pricing that might emerge. Effective management and clear performance metrics are crucial for ensuring value.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002417R6250
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $256,519,033
Exercised Options: $201,453,688
Current Obligation: $201,453,688
Actual Outlays: $20,170,674
Subaward Activity
Number of Subawards: 99
Total Subaward Amount: $144,199,630
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-08-22
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2025-10-22
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