Navy awards $68.8M contract to General Dynamics for navigation systems, with a 2027 completion date

Contract Overview

Contract Amount: $68,847,699 ($68.8M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-30

End Date: 2027-09-29

Contract Duration: 2,921 days

Daily Burn Rate: $23.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: NAVY SYSTEMS ENGINEERING

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $68.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: NAVY SYSTEMS ENGINEERING Key points: 1. Contract value represents a significant investment in critical defense navigation technology. 2. Competition was open after exclusion of sources, suggesting specific technical requirements. 3. Performance risk appears moderate given the definitive contract type and incentive fee structure. 4. This contract supports the Department of the Navy's operational capabilities. 5. The sector focuses on advanced navigation and guidance systems manufacturing.

Value Assessment

Rating: good

The contract's value of $68.8 million over approximately 8 years (2019-2027) appears reasonable for specialized navigation systems. Benchmarking against similar complex system development contracts would provide further insight, but the cost-plus incentive fee structure suggests an effort to control costs while incentivizing performance. The total award amount is within expected ranges for this type of advanced defense procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be open, specific criteria or exclusions were applied, likely due to specialized technical requirements or existing system integration. The exact number of bidders is not specified, but this approach suggests a limited pool of qualified offerors.

Taxpayer Impact: This limited competition may result in less aggressive pricing compared to a truly unrestricted full and open competition, potentially impacting taxpayer value if fewer vendors could meet the stringent requirements.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational forces, who will receive advanced navigation and guidance systems. The contract delivers critical components and integration services for naval platforms. The geographic impact is primarily within the United States, supporting defense infrastructure. Workforce implications include specialized engineering, manufacturing, and technical support roles within General Dynamics and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if performance targets are not met efficiently.
Dependence on a single prime contractor for critical navigation system components.
Risk associated with the 'exclusion of sources' potentially limiting innovation or cost savings from broader competition.

Positive Signals

Incentive fee structure encourages contractor performance and cost control.
Long-term contract duration provides stability for system development and integration.
Award to a known defense contractor suggests a level of confidence in their capabilities.

Sector Analysis

This contract falls within the Navigation, Guidance, and Control Systems manufacturing sector, a specialized area of the aerospace and defense industry. This sector is characterized by high R&D investment, stringent quality requirements, and significant government procurement. The market size for such specialized systems is substantial, driven by ongoing defense modernization efforts globally. General Dynamics Mission Systems is a key player in this domain, competing with other large defense contractors.

Small Business Impact

The contract data indicates that small business participation (sb: false) was not a primary set-aside criterion for this specific award. There is no explicit mention of small business subcontracting goals. The impact on the small business ecosystem would depend on whether General Dynamics Mission Systems actively seeks out small business subcontractors for specialized components or services, which is not detailed in this award information.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Cost Plus Incentive Fee structure, linking contractor profit to performance metrics. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Combat Systems
Aerospace Navigation Equipment
Defense Electronics Manufacturing
Guidance Systems Procurement
Military Navigation Technology

Risk Flags

Limited competition due to source exclusion.
Potential for cost overruns in CPIF contracts.
Reliance on specific technological expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. NAVY SYSTEMS ENGINEERING

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 $68.8 million.

What is the period of performance?

Start: 2019-09-30. End: 2027-09-29.

What is the historical spending trend for similar navigation systems by the Department of the Navy?

Analyzing historical spending on navigation systems by the Department of the Navy reveals a consistent investment in advanced technologies to maintain operational superiority. Over the past decade, spending has fluctuated based on modernization cycles and specific platform requirements. Contracts for navigation, guidance, and control systems often range from tens to hundreds of millions of dollars, reflecting the complexity and criticality of these components. Factors influencing spending include the integration of new technologies like AI-driven navigation, cybersecurity enhancements, and the need for interoperability across different naval assets. Benchmarking this $68.8 million award against prior similar procurements for systems like inertial navigation units, GPS receivers, or integrated bridge systems would provide context on its relative scale and value within the Navy's broader procurement strategy.

How does the 'exclusion of sources' clause impact competition and pricing for this contract?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause signifies that while the competition was intended to be open, specific sources were excluded from bidding. This exclusion is typically based on stringent technical requirements, proprietary technology, existing system integration needs, or unique capabilities that only a limited number of contractors possess. While it aims for a competitive process among qualified entities, it inherently restricts the pool of potential bidders compared to a truly unrestricted competition. This limitation can potentially lead to less aggressive pricing, as the number of viable competitors is reduced. The government's justification for excluding sources is crucial; if the exclusions are well-founded and necessary for technical reasons, the resulting price may still represent good value for the specialized capability acquired. However, it warrants scrutiny to ensure the exclusions were not arbitrary and did not unduly limit market forces.

What are the key performance indicators (KPIs) likely tied to the incentive fee structure?

For a Cost Plus Incentive Fee (CPIF) contract like this one, the incentive fee structure is designed to motivate the contractor, General Dynamics Mission Systems, to achieve specific performance objectives beyond just delivering the product. Key performance indicators (KPIs) likely tied to this contract would focus on areas critical to the success of navigation systems. These could include on-time delivery milestones, adherence to stringent quality standards (e.g., defect rates, reliability metrics), system performance benchmarks (e.g., accuracy, responsiveness, Mean Time Between Failures - MTBF), and potentially cost control targets relative to projected expenses. The incentive fee would be adjusted based on how well the contractor meets or exceeds these pre-defined KPIs, rewarding superior performance and penalizing underperformance, thereby aligning the contractor's interests with the government's objectives for delivering effective and reliable navigation capabilities.

What is General Dynamics Mission Systems' track record with similar defense navigation system contracts?

General Dynamics Mission Systems (GDMS) has a well-established track record in developing and delivering complex mission-critical systems for defense applications, including navigation, communication, and command and control technologies. They are a significant prime contractor for various branches of the U.S. military and allied nations. Their experience spans decades, encompassing a wide range of platforms from ground vehicles to naval vessels and aircraft. GDMS has consistently secured large-scale contracts for integrated systems, often involving sophisticated software and hardware components. While specific performance details on past navigation system contracts are often proprietary or classified, their continued success in winning competitive bids and securing follow-on work suggests a strong performance history and a reputation for delivering reliable solutions within the defense sector. Their ability to manage complex supply chains and integrate advanced technologies is a key factor in their sustained presence.

How does the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code relate to the contract's scope?

The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' precisely defines the industrial sector to which this contract belongs. This code encompasses establishments primarily engaged in manufacturing instruments and related devices for air and water navigation, including GPS, radar, sonar, gyroscopic compasses, and flight control systems. It also includes establishments manufacturing instruments for detecting and indicating physical properties, such as temperature, pressure, and liquid level, as well as scientific and technical instruments. The award to General Dynamics Mission Systems for navigation systems directly aligns with the core activities described by this NAICS code, indicating the contract's focus on producing or integrating advanced technological hardware and software essential for military operations in air and sea environments.

What are the potential risks associated with a definitive contract type for this scope?

A definitive contract, in this context, typically refers to a contract that specifies all the terms and conditions, including price and delivery schedules, upfront. For a complex system like advanced navigation technology, using a definitive contract type, especially with a Cost Plus Incentive Fee (CPIF) structure, presents certain risks. The primary risk is that the initial estimates for cost and schedule might not accurately reflect the complexities that emerge during development and integration. If unforeseen technical challenges arise, the CPIF structure aims to manage cost growth by incentivizing efficiency, but significant deviations could still strain the budget. Furthermore, the 'definitive' nature implies a commitment to the defined scope; scope creep or necessary changes might require contract modifications, potentially leading to delays and increased administrative burden. The success hinges on the thoroughness of the initial requirements definition and the contractor's ability to manage the project within the established framework.

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: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002419R6102

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: $97,997,166

Exercised Options: $88,397,187

Current Obligation: $68,847,699

Actual Outlays: $72,891

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $42,881,807

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline