DoD's $66M facilities support contract awarded to General Dynamics Mission Systems raises value and competition concerns

Contract Overview

Contract Amount: $66,064,784 ($66.1M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-02-03

End Date: 2021-05-03

Contract Duration: 1,916 days

Daily Burn Rate: $34.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::CT::IGF

Place of Performance

Location: PITTSFIELD, BERKSHIRE County, MASSACHUSETTS, 01201

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $66.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: IGF::CT::IGF Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 2. A sole-source award limits price discovery and potentially inflates costs compared to competitive bids. 3. The extended duration of nearly five years suggests a long-term reliance on this specific contractor. 4. The lack of small business participation is noted, with no set-aside or subcontracting requirements. 5. The contract's performance period ended over two years ago, raising questions about current relevance and potential for renegotiation. 6. Facilities support services are critical but often lack easily quantifiable performance metrics, complicating value assessment.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive data and the specific nature of facilities support services. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to higher costs if not managed rigorously. Without comparable sole-source contracts or detailed cost breakdowns, it's difficult to definitively assess if the $66 million spent represents a fair market price. The absence of a competitive process means there was no market pressure to drive down costs.

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 vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. However, the lack of competition means that taxpayers did not benefit from the potential cost savings and innovation that a competitive bidding process could have fostered. It also limits the government's ability to explore alternative solutions or pricing structures.

Taxpayer Impact: Sole-source awards generally result in higher prices for taxpayers as there is no competitive pressure to offer the best value. This contract's lack of competition likely led to a higher overall cost than if it had been competed.

Public Impact

The primary beneficiaries are the Department of Defense and General Dynamics Mission Systems, Inc. The contract provided essential facilities support services, likely encompassing maintenance, operations, and management of physical infrastructure. The geographic impact is concentrated in Massachusetts, where the contract was administered. Workforce implications include employment opportunities for individuals supporting facilities management and operations, primarily through the prime contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Cost-plus-fixed-fee structure may not incentivize cost efficiency.
Lack of small business participation or subcontracting requirements.
Contract expired over two years ago, raising questions about current value and oversight.
Difficulty in benchmarking value for specialized facilities support services.

Positive Signals

General Dynamics Mission Systems is a large, established defense contractor with significant experience.
The contract was awarded by the Department of Defense, a major federal agency with established procurement processes.
The contract duration of nearly five years suggests a sustained need for the services provided.
The fixed fee component of the CPFF contract provides some level of cost predictability for the government.

Sector Analysis

Facilities Support Services fall under the broader professional, scientific, and technical services sector. This sector is characterized by a wide range of specialized services supporting government operations. The market size for federal facilities support is substantial, encompassing maintenance, repair, operations, and management of government-owned or leased properties. This contract represents a significant portion of spending within this niche, highlighting the government's reliance on contractors for essential infrastructure management. Comparable spending benchmarks are difficult to establish due to the bespoke nature of facilities requirements and the sole-source award.

Small Business Impact

This contract did not include any small business set-aside provisions, nor does it appear to have included subcontracting requirements for small businesses. This indicates a missed opportunity to engage the small business industrial base in supporting critical federal facilities. The lack of small business participation suggests that the prime contractor did not leverage subcontracting to meet small business goals, potentially limiting the ecosystem's benefit from this large contract.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates rigorous oversight to monitor costs and ensure the fixed fee is earned appropriately. Transparency is limited due to the sole-source nature and the lack of public cost breakdowns. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Facilities Maintenance and Operations
Base Operations Support (BOS)
Professional, Scientific, and Technical Services
Government Property Management
Logistics and Support Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Expired contract
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. IGF::CT::IGF

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 $66.1 million.

What is the period of performance?

Start: 2016-02-03. End: 2021-05-03.

What is the track record of General Dynamics Mission Systems in delivering facilities support services to the federal government?

General Dynamics Mission Systems, Inc. is a large and established defense contractor with a broad range of capabilities. While they are well-known for complex systems integration and technology solutions, their specific track record in facilities support services, particularly at this scale and duration, requires detailed examination. Federal procurement databases often show extensive contract history for major contractors. However, the nature of facilities support can be highly localized and service-specific. Assessing their performance would involve reviewing past performance evaluations, any contract disputes, and the successful completion of similar service contracts. Without specific performance data tied to this contract, it's assumed they possess the general capacity, but the quality and efficiency of service delivery for this particular contract would need to be evaluated through contract close-out reports or agency performance reviews.

How does the $66 million cost compare to similar facilities support contracts awarded by the DoD?

Direct comparison of the $66 million cost is difficult without knowing the specific scope of services, duration, and location. Facilities support contracts can vary immensely in price based on the size and complexity of the facilities managed, the services included (e.g., janitorial, HVAC, groundskeeping, security, infrastructure repair), and the geographic region. As this was a sole-source award, there's no direct competitive benchmark. However, for context, large-scale Base Operations Support (BOS) contracts, which often encompass facilities management, can range from tens of millions to hundreds of millions of dollars annually. The nearly five-year duration of this contract means the average annual spend was approximately $13.2 million. This figure needs to be evaluated against the specific services rendered and the scale of operations supported to determine if it represents fair value in the absence of competition.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for facilities support?

The primary risks associated with this contract type are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices and reduced incentive for the contractor to innovate or optimize costs. The government lacks the benefit of market forces driving efficiency. Secondly, the cost-plus-fixed-fee (CPFF) structure, while providing some cost certainty through the fixed fee, can still incentivize the contractor to incur costs to ensure the fee is earned, without necessarily driving the most economical approach. If cost controls are weak, the government could end up paying more than necessary. For facilities support, risks also include potential degradation of service quality if the contractor focuses on cost-cutting measures that impact maintenance or operational standards, and difficulty in transitioning services if performance issues arise due to the lack of readily available alternatives.

How effective are facilities support contracts in achieving DoD's operational readiness goals?

Facilities support contracts are crucial for maintaining the operational readiness of the Department of Defense by ensuring that infrastructure is functional, safe, and available. Effective contracts ensure that buildings, grounds, utilities, and related systems are properly maintained, repaired, and operated, allowing military personnel to focus on their primary missions. The effectiveness hinges on clear performance standards, robust oversight, and alignment between the contractor's incentives and the DoD's readiness objectives. When well-managed, these contracts can provide specialized expertise and economies of scale. However, poorly defined scopes, inadequate oversight, or contractor underperformance can directly impede operational readiness by disrupting essential services or requiring costly emergency repairs, thus highlighting the critical importance of diligent contract management and performance monitoring.

What has been the historical spending trend for facilities support services within the DoD?

Historical spending on facilities support services by the Department of Defense has been substantial and generally increasing over the years, reflecting the vast real estate portfolio the DoD manages globally. This category often includes Base Operations Support (BOS), base realinement and closure (BRAC) support, and specialized maintenance services. Factors driving this spending include aging infrastructure requiring more maintenance, the outsourcing of non-core functions to leverage private sector efficiencies, and evolving mission requirements. While specific figures fluctuate based on budget allocations, geopolitical events, and infrastructure investment cycles, facilities support consistently represents a significant portion of the DoD's operational budget. Analyzing trends requires looking at aggregated spending across various contract types and service descriptions within this broad category over multiple fiscal years.

What are the implications of the contract ending in May 2021 for current DoD facilities management?

The fact that this contract ended in May 2021, over two years ago, has several implications. Firstly, it suggests that the services provided have either been transitioned to a new contract, brought in-house, or are no longer required in the same capacity. If a new contract was awarded, its terms, pricing, and competition level would be critical for comparison. If services were brought in-house, it implies a shift in strategy regarding outsourcing. If the need diminished, it could reflect changes in DoD footprint or operational focus. The significant time lag means that any analysis of this contract's value is historical; its relevance to current spending and performance benchmarks is limited unless it serves as a baseline for a subsequent, similar contract. It also raises questions about the continuity of services during the transition period and the efficiency of the subsequent arrangements.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 100 PLASTICS AVE, PITTSFIELD, MA, 01201

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $72,468,540

Exercised Options: $68,695,470

Current Obligation: $66,064,784

Actual Outlays: $2,617,712

Subaward Activity

Number of Subawards: 60

Total Subaward Amount: $12,160,459

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline