DoD's $85M engineering services contract awarded to General Dynamics Mission Systems, Inc. without competition

Contract Overview

Contract Amount: $84,984,291 ($85.0M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-06-17

End Date: 2023-10-31

Contract Duration: 1,597 days

Daily Burn Rate: $53.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: ENGINEERING AND TECHNICAL SERVICES

Place of Performance

Location: CHARLEROI, WASHINGTON County, PENNSYLVANIA, 15022

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $85.0 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: ENGINEERING AND TECHNICAL SERVICES Key points: 1. The contract's value of $85 million over nearly four years suggests a significant investment in specialized engineering and technical services. 2. Awarded as a sole-source contract, it bypasses competitive processes, raising questions about potential cost efficiencies and market-driven pricing. 3. The 'Cost Plus Incentive Fee' (CPIF) structure indicates that contractor performance on specific metrics can influence the final profit, aiming to align incentives. 4. The absence of a small business set-aside suggests the prime contractor is a large entity, with potential implications for subcontracting opportunities. 5. The contract's duration of over four years points to a long-term need for these engineering services within the Department of Defense. 6. The North American Industry Classification System (NAICS) code 334511 points to a focus on manufacturing instruments for search, detection, navigation, guidance, and control. 7. The contract was managed by the Defense Contract Management Agency, indicating oversight within the Department of Defense's procurement framework.

Value Assessment

Rating: questionable

Benchmarking the value of this $85 million contract is challenging without detailed cost breakdowns and comparison to similar sole-source engineering services. The CPIF contract type allows for costs to exceed initial estimates, with profit adjusted based on performance. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if taxpayers are receiving optimal value for money. The lack of competition inherently limits the ability to assess cost-effectiveness against potential alternatives.

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 potential vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means there was no direct price discovery through a bidding process, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding. This can result in higher overall expenditure for the government and, consequently, for taxpayers.

Public Impact

The primary beneficiaries are likely components within the Department of Defense requiring specialized engineering and technical support for navigation, guidance, and control systems. The services delivered are expected to encompass design, development, testing, and sustainment of complex systems critical for military operations. The geographic impact is primarily within the United States, supporting defense infrastructure and potentially involving personnel at various DoD facilities. Workforce implications may include employment for engineers, technicians, and support staff at General Dynamics Mission Systems, Inc. and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
CPIF contract type can lead to cost overruns if not managed tightly.
Lack of small business participation noted, potentially limiting broader economic impact.
Long contract duration may reduce flexibility to adopt newer technologies if they emerge.

Positive Signals

Award to a large, established defense contractor like General Dynamics suggests access to significant expertise and resources.
CPIF structure aims to incentivize contractor performance, potentially leading to better outcomes.
Long-term contract provides stability for critical engineering services.
Specific NAICS code indicates a focus on specialized, high-demand defense technology areas.

Sector Analysis

The contract falls within the broader aerospace and defense sector, specifically focusing on the manufacturing and support of navigation, guidance, and control systems. This is a critical sub-sector for national security, characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this area is often driven by specific defense modernization programs. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature and sole-source award, but overall DoD spending on systems integration and engineering services runs into billions annually.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. The prime contractor, General Dynamics Mission Systems, Inc., is a large corporation. This means that opportunities for small businesses would primarily arise through subcontracting. The extent to which small businesses will benefit depends on the prime contractor's subcontracting plan and the availability of specialized small businesses capable of supporting the contract's technical requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. The CPIF structure implies performance monitoring against specific incentive targets. Transparency is generally limited for sole-source contracts, but contract awards and basic details are often publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD Research, Development, Test, and Evaluation (RDT&E)
DoD Procurement of Weapons and Equipment
Defense Logistics Agency Support Services
Naval Sea Systems Command (NAVSEA) Contracts
Air Force Life Cycle Management Center (AFLCMC) Contracts

Risk Flags

Sole-source award
Potential for cost overruns
Lack of competitive benchmarking
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.0 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. ENGINEERING AND TECHNICAL SERVICES

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $85.0 million.

What is the period of performance?

Start: 2019-06-17. End: 2023-10-31.

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

General Dynamics Mission Systems, Inc. (GDMS) is a major defense contractor with extensive experience across various DoD programs. They frequently engage in sole-source or limited-competition contracts, particularly for specialized systems integration, cybersecurity, and platform modernization. Their track record often involves complex, high-value contracts requiring deep technical expertise. Analyzing past performance on similar CPIF contracts would reveal their ability to manage costs and meet performance incentives effectively. Publicly available data suggests GDMS has a history of securing large sole-source awards, underscoring their position as a key supplier for critical defense technologies. However, a detailed review of specific past performance reviews and any associated disputes or overruns would be necessary for a comprehensive assessment.

How does the $85 million value compare to other engineering and technical services contracts awarded by the DoD?

The $85 million value for this engineering and technical services contract is substantial, placing it in the mid-to-large tier for individual contract awards within the DoD. While the DoD procures billions of dollars in services annually, the specific amount for engineering and technical services can vary widely based on program scope and duration. Contracts for major weapon system development or sustainment can easily reach hundreds of millions or even billions. However, for a contract focused on specific system components like navigation and guidance instruments, $85 million over nearly four years represents a significant investment. Comparing it to other sole-source awards in the same NAICS code (334511) would provide a more direct benchmark, but such data is often aggregated. Generally, this value indicates a critical and complex requirement.

What are the primary risks associated with a sole-source Cost Plus Incentive Fee (CPIF) contract of this magnitude?

The primary risks associated with a sole-source CPIF contract of this magnitude are twofold. Firstly, the sole-source nature eliminates competitive pressure, increasing the risk of inflated pricing and reduced value for money. The government relies heavily on the contractor's proposed costs and the effectiveness of the incentive structure to control expenditures. Secondly, the CPIF structure, while designed to incentivize performance, carries inherent risks. If the target costs are set too high or the incentive metrics are not well-defined, the contractor may achieve maximum profit with less effort than anticipated, or costs could escalate significantly if the 'cost' portion of the contract proves difficult to control. Effective government oversight and robust negotiation of the incentive structure are crucial to mitigate these risks.

What does the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' classification imply for the services rendered?

The NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' indicates that the engineering and technical services procured are directly related to the design, development, production, testing, and sustainment of sophisticated equipment used for locating, orienting, and directing aircraft, ships, and other platforms. This could encompass a wide range of technologies, from radar and sonar systems to GPS receivers, inertial navigation units, flight control computers, and associated software. The services likely involve ensuring the accuracy, reliability, and interoperability of these critical systems, which are fundamental to military operations and safety.

How does the contract's duration (1597 days) impact its overall value and risk profile?

A duration of 1597 days, approximately 4.37 years, for this $85 million contract suggests a long-term need for the engineering services, likely tied to the lifecycle of the systems being supported or developed. This extended period provides stability for the contractor and ensures continuity of essential services for the DoD. From a value perspective, a longer duration can sometimes lead to better economies of scale and reduced per-unit costs if efficiencies are realized over time. However, it also increases the risk associated with technological obsolescence, potential shifts in DoD requirements, and the possibility of cost escalation if market conditions change unfavorably. Effective contract management and flexibility clauses are important for mitigating risks over such an extended period.

What is the significance of the contract type being 'Cost Plus Incentive Fee' (CPIF)?

The 'Cost Plus Incentive Fee' (CPIF) contract type signifies a shared-risk and reward arrangement between the government and the contractor. In a CPIF contract, the final cost and the contractor's fee (profit) are determined by the contractor's performance against pre-defined cost and performance targets. The government agrees to pay the actual allowable costs incurred by the contractor, plus a fee that is adjusted based on whether the final costs are below, at, or above the target cost. If costs are below target, the contractor receives a larger fee; if costs exceed target, the fee is reduced. Incentive targets related to performance metrics (e.g., system reliability, delivery schedule) also influence the fee. This structure aims to motivate the contractor to control costs while achieving specific performance objectives, offering potential value beyond a simple cost-plus contract.

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: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002417R6267

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: $115,411,323

Exercised Options: $115,337,642

Current Obligation: $84,984,291

Actual Outlays: $12,242,552

Subaward Activity

Number of Subawards: 137

Total Subaward Amount: $20,606,671

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline