DoD's $641M contract for engineering services awarded to General Dynamics Mission Systems, Inc

Contract Overview

Contract Amount: $64,082,637 ($64.1M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-08-22

End Date: 2027-05-31

Contract Duration: 2,839 days

Daily Burn Rate: $22.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: UK-10 AND MAGENTA PRODUCTION

Place of Performance

Location: PITTSFIELD, BERKSHIRE County, MASSACHUSETTS, 01201

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $64.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: UK-10 AND MAGENTA PRODUCTION Key points: 1. Value for money is difficult to assess due to the Cost Plus Incentive Fee (CPIF) structure, which can lead to cost overruns if not managed effectively. 2. The contract was not competed, raising concerns about potential price inflation and lack of market-driven cost discovery. 3. Risk indicators include the CPIF pricing model and the absence of competition, which could mask inefficiencies. 4. Performance context is limited as the specific engineering services provided are not detailed, making it hard to benchmark against similar contracts. 5. This contract falls within the Engineering Services sector, a broad category with diverse applications. 6. The duration of the contract (over 7 years) suggests a long-term need for these specialized engineering services.

Value Assessment

Rating: questionable

The $641 million total value over nearly 8 years for engineering services is substantial. However, the Cost Plus Incentive Fee (CPIF) pricing structure makes a direct value-for-money assessment challenging without detailed performance metrics and cost breakdowns. Comparing this to similar, competed contracts for specialized engineering services would be necessary to benchmark pricing effectively. The lack of competition further complicates the assessment of whether the government is receiving optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when a specific contractor possesses unique capabilities or when circumstances prevent a full and open competition. The absence of multiple bidders limits the government's ability to leverage market forces to drive down costs and ensure the most competitive pricing.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective solutions available in the market. It also reduces the incentive for the contractor to aggressively control costs.

Public Impact

The primary beneficiary is the Department of the Navy, receiving specialized engineering services essential for its operations. The services delivered are engineering-related, likely supporting complex defense systems or infrastructure. The geographic impact is centered in Massachusetts, where General Dynamics Mission Systems, Inc. is located, potentially supporting local employment. Workforce implications include the employment of skilled engineers and technical personnel by General Dynamics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
CPIF contract type can incentivize cost overruns if not rigorously managed and monitored.
Lack of detailed service descriptions makes performance benchmarking difficult.
Long contract duration (over 7 years) increases exposure to potential cost escalations or scope creep.

Positive Signals

Award to a large, established defense contractor suggests a level of capability and reliability.
The contract is for engineering services, indicating a focus on critical technical support.
The contract is definitive, implying a clear scope and commitment from the government.

Sector Analysis

The Engineering Services sector (NAICS 541330) encompasses a wide range of professional services related to the design, development, and application of engineering principles. This contract likely falls within the defense sub-sector, supporting the Department of Defense's complex technological needs. Spending in this area is significant across the federal government, with major agencies like DoD, NASA, and DOT relying on these services for infrastructure, research, and system development. Benchmarking would require comparing to other sole-source or competed engineering service contracts within the defense industrial base.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, General Dynamics Mission Systems, Inc., will likely perform the majority of the work, with limited direct benefit or opportunity for the small business ecosystem through this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Incentive Fee (CPIF) contract, rigorous financial oversight and performance monitoring are crucial to ensure cost control and achievement of objectives. Transparency may be limited due to the sole-source nature and the proprietary details of engineering services. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Department of the Navy Contracts
General Dynamics Contracts
Cost Plus Incentive Fee Contracts
Sole Source Defense Contracts

Risk Flags

Sole Source Award
Cost Plus Incentive Fee Pricing
Long Contract Duration
Lack of Detailed Scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. UK-10 AND MAGENTA PRODUCTION

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 $64.1 million.

What is the period of performance?

Start: 2019-08-22. End: 2027-05-31.

What specific engineering services are being provided under this contract?

The provided data does not specify the exact nature of the engineering services. However, given the contractor (General Dynamics Mission Systems, Inc.) and the awarding agency (Department of the Navy), these services likely pertain to complex defense systems, naval technology development, platform modernization, or related technical support. Further details would be required from the contract's statement of work to understand the precise deliverables and technical areas involved. This lack of specificity hinders a thorough analysis of the contract's purpose and value.

How does the $641 million value compare to similar engineering service contracts awarded by the DoD?

Benchmarking the $641 million value requires comparing it to similar engineering service contracts, particularly those awarded on a sole-source basis or with a CPIF structure within the defense sector. Without access to a comprehensive database of comparable contracts, it's difficult to definitively state if this amount is high or low. However, for a contract spanning nearly 8 years and awarded without competition, it represents a significant investment. A detailed analysis would involve identifying contracts with similar scope, duration, and complexity, and then comparing their total values and pricing structures.

What are the primary risks associated with a sole-source CPIF contract of this magnitude?

The primary risks associated with a sole-source Cost Plus Incentive Fee (CPIF) contract of this magnitude include potential cost overruns and reduced incentive for efficiency. Since the contract is not competed, the government lacks the benefit of competitive pricing, potentially leading to higher costs. The CPIF structure, while aiming to incentivize performance, can also lead to increased costs if the target costs are not well-defined or if the incentive structure is not properly aligned with desired outcomes. Furthermore, the long duration increases the risk of scope creep and escalating costs over time without adequate oversight.

What is General Dynamics Mission Systems, Inc.'s track record with similar DoD contracts?

General Dynamics Mission Systems, Inc. is a major defense contractor with a substantial history of performing complex engineering and technology services for the Department of Defense and other government agencies. While specific details of their track record on similar sole-source CPIF contracts are not provided in the given data, the company is known for its work in areas such as command and control systems, intelligence, surveillance, and reconnaissance (ISR), and cybersecurity. Their extensive experience suggests a capacity to handle large, technically demanding projects, but performance on past contracts, including cost control and adherence to schedule, would be a key factor in assessing risk for this award.

What historical spending patterns exist for engineering services within the Department of the Navy?

Historical spending patterns for engineering services within the Department of the Navy are substantial, reflecting the complexity and scale of naval operations and acquisitions. The Navy consistently procures a wide array of engineering support, from research and development to sustainment and modernization of platforms and systems. This includes services for shipbuilding, aircraft, electronic systems, and infrastructure. Annual spending in this category often runs into billions of dollars, distributed across numerous contracts, both competed and sole-source. Analyzing historical data would reveal trends in contract types, pricing, and major service providers, providing context for the current $641 million award.

How effective are CPIF contracts in ensuring value for money in defense engineering services?

Cost Plus Incentive Fee (CPIF) contracts are designed to balance cost control with performance incentives. They can be effective when the government has a clear understanding of the required performance outcomes and can establish realistic target costs and fee structures. The incentive component encourages the contractor to meet or exceed performance targets while managing costs. However, their effectiveness is highly dependent on the quality of the initial cost estimates, the clarity of performance metrics, and the rigor of government oversight. In situations with high technical uncertainty or limited competition, CPIF contracts can still lead to cost overruns if not managed meticulously, making value for money a complex outcome to guarantee.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003019R0009

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $69,129,225

Exercised Options: $69,129,225

Current Obligation: $64,082,637

Subaward Activity

Number of Subawards: 252

Total Subaward Amount: $32,618,634

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline