DoD Navy Awards $851.7M Engineering Services Contract to General Dynamics for Fire Control Systems

Contract Overview

Contract Amount: $851,678,531 ($851.7M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-10-01

End Date: 2030-10-01

Contract Duration: 2,557 days

Daily Burn Rate: $333.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: CONSOLIDATION AND FOLLOW-ON TO 22C1003 AND 22C1005. FY24 FIRE CONTROL OMNIBUS. GFE TRANSPORTATION (SCN).

Place of Performance

Location: PITTSFIELD, BERKSHIRE County, MASSACHUSETTS, 01201

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $851.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: CONSOLIDATION AND FOLLOW-ON TO 22C1003 AND 22C1005. FY24 FIRE CONTROL OMNIBUS. GFE TRANSPORTATION (SCN). Key points: 1. This contract represents a significant investment in naval fire control systems, consolidating previous efforts. 2. General Dynamics Mission Systems, Inc. is the sole awardee, raising questions about competition. 3. The contract's long duration and cost-plus incentive fee structure warrant close monitoring for cost overruns. 4. Engineering services in this specialized defense sector are critical for national security.

Value Assessment

Rating: questionable

The contract value of $851.7M over seven years is substantial. Without comparable contracts or detailed cost breakdowns, assessing its pricing against similar engineering services for advanced fire control systems is difficult. The cost-plus incentive fee structure suggests potential for cost growth.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and potentially reduces the incentive for the contractor to offer the most competitive pricing. The justification for a sole-source award needs careful review.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these critical engineering services.

Public Impact

Ensures continued modernization and maintenance of vital naval fire control systems. Supports advanced technological capabilities for the U.S. Navy's fleet. Potential for job creation within the defense contracting sector. Long-term commitment to a single provider could impact future innovation and cost-effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost-plus incentive fee structure carries inherent risk of cost overruns.
Long contract duration increases exposure to potential inefficiencies.
Lack of small business participation noted.

Positive Signals

Consolidates critical fire control system support.
Ensures continuity of essential defense capabilities.
Leverages established contractor expertise.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced defense systems for the Department of the Navy. Spending in this area is driven by national security requirements and technological advancements in military hardware. Benchmarks are difficult to establish due to the specialized nature of fire control systems.

Small Business Impact

The data indicates that small business participation was not a factor in this award (sb: false). This suggests that the prime contractor, General Dynamics Mission Systems, Inc., will likely perform the majority of the work, with limited subcontracting opportunities for small businesses.

Oversight & Accountability

The sole-source nature of this large, long-term contract necessitates robust oversight from the Department of Defense to ensure cost control, performance, and adherence to contract terms. Regular audits and performance reviews will be crucial for accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award.
Cost-plus incentive fee structure.
Long contract duration (7 years).
No small business participation noted.
Potential for contractor inefficiency due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $851.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. CONSOLIDATION AND FOLLOW-ON TO 22C1003 AND 22C1005. FY24 FIRE CONTROL OMNIBUS. GFE TRANSPORTATION (SCN).

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 $851.7 million.

What is the period of performance?

Start: 2023-10-01. End: 2030-10-01.

What is the specific justification for awarding this significant contract on a sole-source basis, and what steps are being taken to ensure fair pricing without competitive bidding?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. For this contract, the specific rationale needs to be thoroughly documented and reviewed by oversight bodies. To mitigate pricing risks, the government should employ rigorous negotiation strategies, independent cost estimates, and potentially incorporate performance-based incentives that strongly link contractor profit to achieving cost efficiencies and meeting performance metrics.

Given the cost-plus incentive fee structure and the seven-year duration, what are the primary risks of cost overruns, and what mechanisms are in place to control them?

The primary risks of cost overruns stem from the contractor's potential to incur higher costs while still achieving target profit margins, especially if the incentive structure is not sufficiently aggressive. The seven-year duration amplifies this risk by extending the period of potential overspending. Mechanisms to control costs include detailed baseline cost estimates, regular audits of contractor expenditures, stringent performance metrics tied to fee adjustments, and clear contract clauses that limit allowable costs and define profit ceilings.

How will the effectiveness of the fire control systems be measured and ensured throughout the contract's lifecycle, particularly given the consolidation of previous efforts?

Effectiveness will be measured through a combination of technical performance metrics (TPMs), operational readiness rates, system reliability, and successful mission outcomes. The contract should define clear, measurable, achievable, relevant, and time-bound (SMART) objectives for system performance. Regular testing, fleet feedback, and post-deployment reviews will be critical. Consolidating efforts should ideally lead to improved interoperability and streamlined maintenance, which should be reflected in enhanced overall system effectiveness.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003024R1005

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $606,365,421

Exercised Options: $547,380,236

Current Obligation: $851,678,531

Subaward Activity

Number of Subawards: 192

Total Subaward Amount: $46,729,570

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline