DoD's $50M software engineering contract to General Dynamics Mission Systems raises value and competition concerns

Contract Overview

Contract Amount: $50,178,411 ($50.2M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-05-31

End Date: 2024-05-31

Contract Duration: 1,827 days

Daily Burn Rate: $27.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SOFTWARE ENGINEERING AND TECHNICAL SUPPORT

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $50.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: SOFTWARE ENGINEERING AND TECHNICAL SUPPORT Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Significant duration of 1827 days suggests a long-term need, but lack of competition is a red flag. 3. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not closely managed. 4. The specific Product Service Code (PSC) is not provided, hindering detailed benchmarking. 5. While General Dynamics is a large, established contractor, the absence of competition warrants scrutiny. 6. The contract's value of over $50 million necessitates robust oversight to ensure taxpayer value.

Value Assessment

Rating: questionable

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is challenging without specific deliverables or comparable contract data. The $50.18 million awarded over approximately five years suggests a substantial investment. However, the lack of competition means there's no market-driven price discovery to assess if this represents a fair and reasonable price. CPFF contracts inherently carry a risk of higher costs compared to fixed-price arrangements, especially if cost controls are not stringent. Without more detail on the scope of work and performance metrics, it's difficult to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This means the Department of the Navy did not solicit offers from multiple potential contractors. Such awards are typically justified when only one source can provide the required goods or services, often due to proprietary technology, urgent needs, or unique capabilities. The lack of a competitive bidding process means taxpayers did not benefit from the potential cost savings and innovation that competition can drive.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple companies to bid and drive down costs through competition.

Public Impact

The primary beneficiaries are the personnel within the Department of Defense who will receive software engineering and technical support services. The contract supports critical functions related to search, detection, navigation, guidance, and related systems. Services are likely to be delivered within the United States, supporting national defense capabilities. The contract supports a significant amount of work, potentially sustaining jobs within General Dynamics Mission Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a contract of this magnitude raises concerns about potential overpricing and reduced innovation.
The Cost Plus Fixed Fee (CPFF) contract type can lead to cost escalations if not meticulously managed and overseen.
Absence of detailed performance metrics or clear deliverables in the provided data makes it difficult to assess true value for money.
The long contract duration (1827 days) without competitive re-evaluation could lock the government into a potentially suboptimal arrangement.

Positive Signals

General Dynamics Mission Systems is a large, established defense contractor with a significant track record.
The contract addresses critical defense needs in navigation, guidance, and detection systems.
The award is to a single entity, potentially allowing for streamlined communication and project management.
The contract is a definitive contract, implying a clear agreement on terms and conditions.

Sector Analysis

This contract falls within the Information Technology and Defense sectors, specifically related to software engineering and technical support for complex defense systems. The market for such specialized services is dominated by large defense contractors capable of handling intricate requirements and security protocols. The North American Industry Classification System (NAICS) code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing) indicates a focus on hardware and integrated systems, but the contract itself is for the software engineering and support aspects. Spending in this area is substantial within the DoD, driven by the need for advanced technological capabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, General Dynamics Mission Systems, there is a potential for subcontracting opportunities for small businesses. However, the extent to which small businesses will participate is not specified. Without a small business subcontracting plan requirement explicitly stated or a competitive process that encourages small business participation, the direct impact on the small business ecosystem is uncertain and likely dependent on the prime contractor's internal policies.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a large, sole-source award, it likely requires significant oversight to manage costs, ensure performance, and verify that the services delivered meet the specified requirements. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is limited due to the non-competitive nature, but contract modifications, performance reports, and payment data would typically be subject to internal review and potentially public reporting through systems like FPDS.

Related Government Programs

Department of Defense Software Development Contracts
Naval Systems Engineering Support
Navigation and Guidance System Development
Search and Detection Technology Contracts
General Dynamics Mission Systems Contracts
Cost Plus Fixed Fee Contracts in Defense

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of detailed performance metrics
Long contract duration without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. SOFTWARE ENGINEERING AND TECHNICAL SUPPORT

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 $50.2 million.

What is the period of performance?

Start: 2019-05-31. End: 2024-05-31.

What is the specific scope of 'software engineering and technical support' covered under this contract, and what are the key performance indicators (KPIs)?

The provided data does not detail the specific scope of 'software engineering and technical support.' This could range from developing new software modules, maintaining existing systems, cybersecurity support, to integration testing. Similarly, key performance indicators (KPIs) are not specified. In a well-managed contract, KPIs would define measurable standards for performance, such as system uptime, bug resolution times, or successful feature implementation. Without this information, it is difficult to assess the contractor's performance objectively or determine if the services delivered align with the government's needs and expectations. The NAICS code 334511 suggests a link to hardware systems, implying the software support is likely for these complex instruments.

How does the $50.18 million contract value compare to similar software engineering support contracts within the Department of the Navy or DoD?

Direct comparison of the $50.18 million value is difficult without knowing the specific technical domain and duration of comparable contracts. However, for a five-year period (approximately 1827 days), this represents an average annual value of roughly $10 million. This figure is substantial and falls within the range of significant IT and engineering support contracts awarded by the DoD. The key differentiator here is the sole-source nature. Competitive contracts for similar services might yield lower average annual costs due to market pressures. The absence of competition for this specific contract prevents a direct 'apples-to-apples' value comparison against market benchmarks.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than if multiple bids were solicited. The government may not be achieving the best possible price. Secondly, the CPFF contract type, while allowing flexibility, can incentivize the contractor to incur more costs to increase their fixed fee, which is often a percentage of the total costs. This requires rigorous oversight from the government to control spending and ensure efficiency. The long duration (nearly 5 years) exacerbates these risks, as any inefficiencies or cost overruns compound over time. Without strong government oversight and clear performance metrics, this contract structure poses a significant risk to taxpayer funds.

What is General Dynamics Mission Systems' track record with similar sole-source CPFF contracts within the Department of Defense?

General Dynamics Mission Systems (GDMS) is a major defense contractor with extensive experience across various contract types, including CPFF, and has a history of sole-source awards, particularly in specialized defense technology areas. Analyzing their specific track record with sole-source CPFF contracts would require examining historical contract data for performance, cost control, and adherence to schedules on similar projects. GDMS generally has a reputation for delivering complex systems, but like any large contractor, performance can vary. A deeper dive into their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for similar sole-source CPFF awards would be necessary to assess their reliability and cost-management capabilities in such scenarios.

Given the contract's focus on 'Search, Detection, Navigation, Guidance,' how does this spending align with current DoD modernization priorities?

Spending on software engineering and technical support for search, detection, navigation, and guidance systems directly aligns with key Department of Defense modernization priorities. These capabilities are fundamental to maintaining situational awareness, enabling precision targeting, and ensuring the effectiveness of naval platforms and potentially other assets. As the DoD increasingly focuses on contested environments, advanced sensing, resilient navigation, and integrated command and control, investments in the underlying software and systems are critical. This contract, despite its non-competitive nature, supports the development and sustainment of technologies essential for future warfare concepts and maintaining a technological edge over adversaries.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002418R6104

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $51,359,409

Exercised Options: $50,963,379

Current Obligation: $50,178,411

Actual Outlays: $5,093,108

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $15,807,900

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline