Navy awards $44.4M for MK 46 MOD 2 GWS, a sole-source definitive contract

Contract Overview

Contract Amount: $44,356,738 ($44.4M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2019-06-05

End Date: 2025-04-30

Contract Duration: 2,156 days

Daily Burn Rate: $20.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK 46 MOD 2 GWS

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $44.4 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: MK 46 MOD 2 GWS Key points: 1. Contract awarded to General Dynamics Land Systems Inc. for MK 46 MOD 2 GWS. 2. The contract is a definitive contract with a firm fixed price. 3. Duration of the contract is 2156 days, ending April 30, 2025. 4. The contract was not competed, indicating a sole-source award. 5. The award falls under the Small Arms, Ordnance, and Ordnance Accessories Manufacturing NAICS code. 6. The contract is not set aside for small businesses. 7. The contract is managed by the Department of the Navy within the Department of Defense.

Value Assessment

Rating: questionable

Benchmarking the value for this specific MK 46 MOD 2 GWS is challenging without detailed cost breakdowns and comparisons to similar sole-source procurements. The firm fixed price structure aims to control costs, but the lack of competition limits the ability to assess if the price is truly competitive. Further analysis would require understanding the unique capabilities and market for this specific ordnance system.

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 typically occurs when a specific product or service is only available from a single source, or when national security concerns necessitate a direct award. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without multiple offers, the government cannot be assured it is receiving the best possible price for the MK 46 MOD 2 GWS.

Public Impact

The primary beneficiaries are the U.S. Navy warfighters who will receive the MK 46 MOD 2 Gun Weapon Systems. The contract delivers essential ordnance and weapon system components for naval operations. The geographic impact is primarily within the United States, supporting defense manufacturing and supply chains. Workforce implications include employment at General Dynamics Land Systems Inc. and its subcontractors involved in the manufacturing process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Limited visibility into the contractor's cost structure without competitive bidding.

Positive Signals

Firm fixed price contract provides cost certainty for the government once awarded.
Award to an established defense contractor with presumed expertise in ordnance manufacturing.
Contract duration suggests a long-term need for this specific weapon system.

Sector Analysis

The defense sector, specifically ordnance manufacturing, is characterized by high barriers to entry, specialized technology, and significant government oversight. Contracts for weapon systems like the MK 46 MOD 2 GWS are often sole-sourced due to proprietary technology or unique capabilities. The market size for such specialized ordnance is dictated by defense budgets and strategic requirements, with major defense contractors dominating.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, with opportunities potentially arising only if General Dynamics Land Systems Inc. chooses to subcontract portions of the work to small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the firm fixed price contract type, which obligates the contractor to deliver the specified goods within the agreed price. Transparency is limited due to the sole-source nature of the award, but contract award data is publicly available.

Related Government Programs

Naval Surface Warfare
Ordnance and Ammunition Procurement
Weapon Systems Manufacturing
Department of Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.4 million to GENERAL DYNAMICS LAND SYSTEMS INC.. MK 46 MOD 2 GWS

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS LAND 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 $44.4 million.

What is the period of performance?

Start: 2019-06-05. End: 2025-04-30.

What is the specific operational role and capability of the MK 46 MOD 2 GWS?

The MK 46 MOD 2 Gun Weapon System (GWS) is a medium-caliber, remotely operated naval gun system designed for use on a variety of naval platforms. It is typically employed for self-defense against small boats, aircraft, and other asymmetric threats. Its capabilities often include rapid target acquisition, high firing rates, and integration with shipboard combat systems. The 'MOD 2' designation suggests it is an upgraded or second-generation version of the MK 46 system, likely incorporating improvements in fire control, reliability, or lethality over previous iterations. Specific details on its exact firing rate, caliber, and engagement envelopes are usually classified or found in technical manuals.

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For defense systems like the MK 46 MOD 2 GWS, this could be due to proprietary technology, unique manufacturing capabilities held by General Dynamics Land Systems Inc., or specific integration requirements with existing naval platforms that only they can meet. The Department of Defense would have conducted a justification and approval (J&A) process to document the rationale for not competing the award. This process ensures that a sole-source award is only used when truly necessary and that the chosen contractor is capable of fulfilling the requirement.

How does the firm fixed price (FFP) contract type benefit the government in this scenario?

A Firm Fixed Price (FFP) contract is generally considered advantageous for the government when the scope of work is well-defined and the risks of cost overruns are manageable. In this case, it provides the government with cost certainty, as the contractor assumes the risk of any cost increases during performance. This means the total price paid will not exceed the agreed-upon amount, regardless of the contractor's actual costs. For the MK 46 MOD 2 GWS, an FFP contract helps in budgeting and financial planning, as the total expenditure is known upfront. However, the benefit is maximized when there is adequate competition to ensure the initial fixed price is reasonable.

What is the historical spending trend for the MK 46 MOD 2 GWS or similar systems?

Analyzing historical spending for the MK 46 MOD 2 GWS specifically is difficult without access to detailed contract databases and historical award information. However, spending on naval gun weapon systems and ordnance generally fluctuates with defense budgets, strategic priorities, and the lifecycle of weapon systems. If the MK 46 MOD 2 is an established system, spending might represent sustainment, upgrades, or replacement of aging inventory. If it's a newer system, spending could reflect initial procurement and fielding. Without more granular data, it's challenging to establish a precise trend, but it's reasonable to assume consistent, albeit variable, investment in such critical naval armament.

What are the potential risks associated with a sole-source contract for defense equipment?

Sole-source contracts for defense equipment carry several potential risks. The most significant is the lack of price competition, which can lead to inflated prices and reduced value for taxpayer money. Without competing bids, the government may pay more than necessary. Additionally, sole-source awards can stifle innovation by limiting opportunities for other companies to develop and offer alternative solutions. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially impacting future procurement flexibility and pricing power. Finally, the justification process for sole-source awards needs rigorous oversight to prevent potential abuses or awards based on convenience rather than necessity.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002419R5388

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 48310

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: $44,356,738

Exercised Options: $44,356,738

Current Obligation: $44,356,738

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $4,975,476

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline