General Dynamics awarded $53.2M for Guided Missile Director systems, with a 42-month performance period

Contract Overview

Contract Amount: $53,236,716 ($53.2M)

Contractor: General Dynamics-Ots, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-29

End Date: 2027-08-27

Contract Duration: 1,246 days

Daily Burn Rate: $42.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GUIDED MISSILE DIRECTOR FOR USN

Place of Performance

Location: WILLISTON, CHITTENDEN County, VERMONT, 05495

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $53.2 million to GENERAL DYNAMICS-OTS, INC. for work described as: GUIDED MISSILE DIRECTOR FOR USN Key points: 1. Contract value of $53.2 million over 42 months suggests a significant investment in naval defense capabilities. 2. The firm fixed-price contract type indicates that cost risks are primarily borne by the contractor. 3. Awarded under full and open competition, this contract likely benefited from competitive pricing pressures. 4. The North American Industry Classification System (NAICS) code 334511 points to specialized manufacturing within the defense sector. 5. The contract's duration of 1246 days (approx. 42 months) allows for sustained production and delivery. 6. The absence of small business set-aside flags suggests a focus on large, specialized defense contractors.

Value Assessment

Rating: good

The contract value of $53.2 million for guided missile directors appears reasonable given the specialized nature of the equipment and the 42-month performance period. Benchmarking against similar complex defense systems suggests that pricing is likely competitive due to the full and open competition. The firm fixed-price structure further supports value for money by incentivizing contractor efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which is expected to lead to more favorable pricing and better value for the government.

Taxpayer Impact: Full and open competition typically results in lower prices for taxpayers by leveraging market forces to drive down costs and encourage innovation among bidders.

Public Impact

The U.S. Navy benefits from the acquisition of advanced guided missile director systems, enhancing its combat capabilities. This contract supports the production of critical defense hardware essential for national security. The geographic impact is primarily centered around the contractor's facilities in Vermont, potentially creating or sustaining jobs in that region. The contract supports the defense industrial base, ensuring the availability of specialized manufacturing expertise and capacity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise, despite the firm fixed-price structure.
Dependence on a single contractor for a critical defense component could pose supply chain risks.
Long-term sustainment and maintenance costs for these systems are not detailed in this award.

Positive Signals

Firm fixed-price contract minimizes the risk of cost escalation for the government.
Full and open competition suggests a robust bidding process that likely secured competitive pricing.
The extended performance period allows for consistent production and delivery of essential defense equipment.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on navigation, guidance, and control systems. The market for such specialized components is dominated by a few large defense contractors with the requisite technical expertise and security clearances. Spending in this area is driven by military modernization programs and geopolitical security needs. Comparable spending benchmarks would involve other major defense procurements for similar complex electronic and weapon systems.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. Given the specialized nature of guided missile directors, it is likely that the prime contractor, General Dynamics-OTS, Inc., is a large business. Subcontracting opportunities for small businesses may exist, but they would depend on the prime contractor's procurement strategy and the availability of specialized suppliers within the defense industrial base.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Navy, likely through contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of accountability by fixing the total cost. 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 Surface Warfare
Missile Systems Procurement
Defense Electronics Manufacturing
Guidance and Control Systems
Department of Defense Contracts
Navy Weapon Systems

Risk Flags

Potential for schedule delays
Long-term sustainment planning needed
Supply chain dependency risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.2 million to GENERAL DYNAMICS-OTS, INC.. GUIDED MISSILE DIRECTOR FOR USN

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS-OTS, 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 $53.2 million.

What is the period of performance?

Start: 2024-03-29. End: 2027-08-27.

What is the historical spending trend for guided missile directors by the Department of the Navy?

Analyzing historical spending for guided missile directors by the Department of the Navy requires access to detailed procurement data over multiple fiscal years. Generally, spending in this category fluctuates based on fleet modernization needs, new program starts, and the lifecycle of existing weapon systems. Factors such as geopolitical tensions, technological advancements, and budget allocations significantly influence these trends. Without specific historical data for this particular system or category, it's difficult to provide precise figures. However, it is understood that the Navy invests billions annually in its missile systems, encompassing research, development, procurement, and sustainment. This $53.2 million award represents a portion of that larger investment, likely for a specific variant or upgrade program.

How does the awarded price compare to similar contracts for missile guidance systems?

Direct comparison of the awarded price of $53.2 million for General Dynamics-OTS, Inc.'s guided missile director system requires access to a database of similar, recent contracts. Key comparison factors include the specific type of missile system, the technological sophistication, the quantity ordered, and the contract duration. Given that this is a firm fixed-price contract awarded under full and open competition, the price is presumed to be competitive. However, without specific benchmark data for comparable systems (e.g., similar guidance systems for other naval platforms or air-launched missiles), a definitive value-for-money assessment is challenging. The $1.27 million per year average value ($53.2M / 42 months * 12 months) provides a rough metric, but unit costs would be more revealing if available.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract, despite being firm fixed-price, include potential performance issues if the contractor encounters unforeseen technical difficulties that impact delivery schedules or system functionality. While the contractor bears the cost risk, schedule delays can still impact operational readiness. Another risk is the long-term sustainment and obsolescence management of the guided missile directors; the initial procurement cost is only part of the total ownership expense. Furthermore, reliance on a single source for such a critical component, even if competitively procured initially, can create future dependencies and limit flexibility in upgrades or alternative sourcing. Ensuring the contractor maintains adequate quality control throughout the production process is also a continuous government interest.

What is the track record of General Dynamics-OTS, Inc. in delivering similar defense systems?

General Dynamics Ordnance and Tactical Systems (OTS), a subsidiary of General Dynamics, has a well-established track record in producing a wide range of defense systems, including munitions, missile components, and related technologies. They are known for their manufacturing capabilities and experience in delivering complex defense hardware to various branches of the U.S. military and allied nations. While specific details on their performance for guided missile directors would require a deeper dive into contract performance histories, their overall reputation within the defense industrial base suggests a capacity to meet the technical and production requirements outlined in this contract. Past performance evaluations, often a factor in contract awards, would provide more granular insights.

How does the duration of this contract (1246 days) impact program management and cost?

The contract duration of 1246 days (approximately 3.4 years) is substantial for a hardware production contract and has several implications. For program management, it allows for a phased production schedule, potentially accommodating design refinements or integration challenges over time. It also necessitates sustained oversight and contract administration by the Department of the Navy. From a cost perspective, a longer duration can sometimes lead to economies of scale in production, potentially lowering per-unit costs compared to shorter, more rapid production runs. However, it also extends the period during which the government is committed to funding the program and increases the potential exposure to inflation or changes in program priorities over the contract's life.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002419R5111

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 326 IBM ROAD BUILDING 862, WILLISTON, VT, 05495

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: $53,385,375

Exercised Options: $53,236,716

Current Obligation: $53,236,716

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $42,125,950

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002420D5109

IDV Type: IDC

Timeline