DoD awards $14.79M for Trident missile system parts, raising questions on competition and value

Contract Overview

Contract Amount: $14,785,699 ($14.8M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-06-03

End Date: 2008-08-01

Contract Duration: 1,886 days

Daily Burn Rate: $7.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 200309!00A190!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003003C0004 !A!N! !N! !20030603!20030930!125206883!125206883!001381284!N!GENERAL DYNAMICS ADVANCED INFO!100 PLASTICS AVE !PITTSFIELD !MA!01201!53960!003!25!PITTSFIELD !BERKSHIRE !MASS !+000003695574!N!N!000000000000!1425!GUIDED MISSILE SYSTEMS, COMPLETE !A2 !MISSILE AND SPACE SYSTEMS !2CNJ!UGM-96 TRIDENT !336419!E! !3! ! ! ! ! !99990909!B!F!N!A! !D!N!V!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!A!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: PITTSFIELD, BERKSHIRE County, MASSACHUSETTS, 01201

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $14.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200309!00A190!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003003C0004 !A!N! !N! !20030603!20030930!125206883!125206883!001381284!N!GENERAL DYNAMICS ADVANCED INFO!100 PLASTICS AVE !PITTSFIELD !MA!01201!53960!003!25!PITTSFIELD !BERKS… Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Significant duration of 1886 days suggests a long-term need for these specialized parts. 3. The contractor, General Dynamics, is a major defense supplier, indicating established capabilities. 4. The contract type (Cost Plus Incentive Fee) can incentivize cost control but also carries inherent risk. 5. Awarded to a single entity without a bidding process raises concerns about potential overpayment. 6. The specific part number (336419) points to a niche requirement within the Trident program.

Value Assessment

Rating: questionable

The awarded amount of $14.79 million for specialized missile parts appears substantial, especially given the lack of competitive bidding. Without comparable contract data or market benchmarks for this specific part (336419), it is difficult to definitively assess value for money. The Cost Plus Incentive Fee structure, while designed to manage costs, can lead to higher final prices if not rigorously overseen. The absence of competition means taxpayers may not have received the best possible price.

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. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition means there were no other bidders to drive down the price through a bidding process. This raises concerns about whether the government obtained the most favorable terms and pricing.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding, potentially leading to higher overall expenditure for the defense program.

Public Impact

The primary beneficiaries are the U.S. Navy's strategic missile programs, ensuring the continued operational readiness of the Trident submarine fleet. Services delivered include the provision of specific, likely critical, components for the UGM-96 Trident missile system. The geographic impact is national, supporting a key component of U.S. strategic deterrence, with manufacturing likely concentrated in Massachusetts. Workforce implications include supporting specialized manufacturing jobs within General Dynamics' facilities, particularly in Pittsfield, MA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Cost Plus Incentive Fee contract type can lead to cost overruns if not managed effectively.
Long contract duration (1886 days) increases exposure to potential cost changes and performance issues.
Sole-source nature limits transparency in pricing and value assessment.

Positive Signals

Contract awarded to a known defense contractor with established expertise in missile systems.
The specific part is critical for a vital national security program (Trident missile system).
The contract aims to ensure the continued availability of essential components for strategic deterrence.

Sector Analysis

This contract falls within the Defense sector, specifically supporting the manufacturing of missile and space systems. The market for such specialized components is highly concentrated, often dominated by a few large defense contractors due to the stringent technical requirements, security clearances, and intellectual property involved. Spending in this sub-sector is driven by national defense priorities and the lifecycle management of strategic weapon systems. Comparable spending benchmarks are difficult to establish due to the unique nature of the components and the limited number of suppliers.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to General Dynamics, a large corporation. There is no explicit information regarding subcontracting plans for small businesses. The lack of set-aside or clear subcontracting goals suggests a minimal direct impact on the small business defense ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense, likely managed by the Strategic Systems Programs office and potentially overseen by the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the Cost Plus Incentive Fee structure, which links contractor profit to performance and cost targets. Transparency is limited due to the sole-source nature of the award, but contract details and performance reports would be available internally within the DoD. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Trident II (D5) Submarine Ballistic Missile Program
Strategic Systems Programs (SSP)
Missile and Space Systems Manufacturing
Defense Contract Management Agency (DCMA) Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Cost Plus Incentive Fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200309!00A190!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003003C0004 !A!N! !N! !20030603!20030930!125206883!125206883!001381284!N!GENERAL DYNAMICS ADVANCED INFO!100 PLASTICS AVE !PITTSFIELD !MA!01201!53960!003!25!PITTSFIELD !BERKSHIRE !MASS !+000003695574!N!N!000000000000!1425!GUIDED MISSILE SYSTEMS, COMPLETE !A2 !MISSILE AND SPACE SYSTEMS !2CNJ!UGM-96 TRIDENT !336419!E! !3! ! ! ! ! !99990909!B

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 $14.8 million.

What is the period of performance?

Start: 2003-06-03. End: 2008-08-01.

What is the track record of General Dynamics Mission Systems, Inc. with similar sole-source contracts for missile components?

General Dynamics Mission Systems, Inc. (GDMS) is a major defense contractor with extensive experience in developing and manufacturing complex systems, including those for strategic missile programs. While specific data on their sole-source contracts for comparable missile components is not publicly detailed, their long-standing relationship with the Department of Defense and their role in programs like the Trident suggest a history of successful, albeit often non-competitively awarded, engagements. Their track record generally indicates a capacity to meet stringent technical and performance requirements. However, the absence of competition in sole-source awards means that direct comparisons of their pricing and value delivery against other potential suppliers are not readily available, making it challenging to assess their performance in terms of cost-effectiveness in such scenarios.

How does the Cost Plus Incentive Fee (CPIF) contract type typically perform in terms of cost and schedule adherence for defense contracts?

Cost Plus Incentive Fee (CPIF) contracts are designed to encourage contractor efficiency by linking a portion of the fee to performance against target costs and schedules. If the contractor meets or exceeds targets, they earn a higher fee; if they fall short, the fee is reduced. Historically, CPIF contracts can be effective in controlling costs and meeting objectives when targets are well-defined and achievable, and when there is robust government oversight. However, they also carry risks. If targets are set too high or too low, or if the government's cost accounting and oversight are insufficient, costs can escalate beyond initial projections. The incentive structure itself can sometimes lead to unintended consequences, such as contractors focusing on easily achievable metrics rather than overall program value. For this specific contract, the 1886-day duration suggests that effective management of the CPIF structure will be crucial to prevent cost overruns.

What are the risks associated with awarding a contract for critical missile components on a sole-source basis?

The primary risk of a sole-source award for critical missile components is the lack of price competition. This can lead to the government paying a premium compared to what might have been achieved in a competitive bidding environment. Another significant risk is reduced innovation; without competitive pressure, the contractor may have less incentive to explore more cost-effective or technologically advanced solutions. Furthermore, sole-source awards can create dependency on a single supplier, making the program vulnerable to supply chain disruptions, price increases, or the contractor's potential exit from the market. Ensuring fair and reasonable pricing and rigorous performance oversight becomes paramount when competition is absent.

What is the historical spending pattern for components related to the UGM-96 Trident missile system?

Historical spending data for specific components of the UGM-96 Trident missile system is highly specialized and not readily available in public databases. However, it is understood that the Trident program, as a cornerstone of U.S. strategic deterrence, receives consistent and substantial funding over its lifecycle. This includes significant investments in research, development, procurement, and sustainment of the missiles and their associated components. Spending on components like those covered by this contract would typically be part of larger sustainment or modernization efforts. Given the program's long operational history and the advanced nature of the technology, spending on such parts is expected to be significant, though specific figures for individual components are often classified or considered proprietary.

How does the geographic location of the contractor (Pittsfield, MA) impact the contract's execution and oversight?

The contractor, General Dynamics Advanced Information Systems (now part of General Dynamics Mission Systems), is located in Pittsfield, Massachusetts. This location places the primary manufacturing and operational site within the United States, which can simplify certain aspects of oversight and communication compared to international suppliers. The Defense Contract Management Agency (DCMA) has offices that can provide on-site surveillance and quality assurance. However, the specific impact on contract execution and oversight is generally minimal, provided robust communication channels and standard DoD oversight procedures are followed. Proximity can facilitate site visits and direct interaction, potentially aiding in timely issue resolution. The concentration of defense-related industry in Massachusetts may also indicate a skilled local workforce available for such specialized manufacturing.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Parent Company: General Dynamics Corp

Address: 100 PLASTICS AVE, PITTSFIELD, MA, 01201

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline