General Dynamics received over $148 million for communications security equipment and components

Contract Overview

Contract Amount: $27,486,222 ($27.5M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-12-17

End Date: 2012-11-30

Contract Duration: 3,271 days

Daily Burn Rate: $8.4K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200403!040073!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003904C0022 !A!N! !N! ! !20031217!20050630!148037518!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8220 E ROOSEVELT ST !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARICOPA !ARIZONA !+000010562847!N!N!000021125694!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !1! ! ! ! ! !99990909!B! ! !A! !C!N!R!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!D!Y! ! ! !Y!1739!N00039!0001! !

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200403!040073!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003904C0022 !A!N! !N! ! !20031217!20050630!148037518!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8220 E ROOSEVELT ST !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARI… Key points: 1. The contract value of $148 million represents a significant investment in defense communications. 2. Competition dynamics for this contract are not fully detailed, but it's a follow-on to a competed action. 3. The contract type is Cost Plus Award Fee, which can incentivize performance but also carries cost overrun risks. 4. The duration of the contract (over 9 years) suggests a long-term need for these specialized components. 5. The primary contractor, General Dynamics Mission Systems, is a major player in the defense sector. 6. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing niche.

Value Assessment

Rating: fair

The total award amount of $148,037,518 over a period of approximately 9 years suggests a substantial but potentially reasonable annual spend for specialized defense equipment. Benchmarking this against similar contracts for communications security equipment is difficult without more specific details on the exact components and services rendered. However, the Cost Plus Award Fee (CPAF) structure implies that the final cost could vary based on performance, making a direct price comparison challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is described as a 'FOLLOW ON TO COMPETED ACTION,' indicating that there was prior competition, but the current award might not have undergone a full and open competition. The specific level of competition for this follow-on action is not detailed, making it difficult to assess the number of bidders or the extent of price discovery. Limited competition can sometimes lead to higher prices for the government.

Taxpayer Impact: The limited competition for this follow-on contract means taxpayers may not have benefited from the lowest possible prices that a fully open bidding process could have achieved.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical communications security equipment. This contract supports the development and production of specialized electronic equipment for national security. The geographic impact is concentrated around the contractor's facilities in Arizona, with potential ripple effects in the local economy. The contract likely supports a specialized workforce within General Dynamics Mission Systems, contributing to high-tech manufacturing jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not managed tightly.
The 'follow-on' nature of the contract raises questions about the extent of current competition.
Lack of detailed performance metrics makes it hard to assess if the award fee was fully earned.

Positive Signals

General Dynamics Mission Systems is a reputable contractor with a track record in defense systems.
The contract duration suggests a stable and ongoing need for the procured equipment.
The award follows a previously competed action, implying some level of market vetting.

Sector Analysis

This contract falls within the broader defense electronics and communications sector, a critical area for national security. The market for such specialized equipment is often characterized by a limited number of highly capable contractors due to stringent technical requirements and security clearances. Spending in this sector is substantial, driven by evolving threats and technological advancements, with significant government investment in maintaining a communications advantage.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting plans in the provided data. Given the specialized nature of communications security equipment and the prime contractor's size, it's possible that subcontracting opportunities for small businesses might be limited or focused on specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting officers and potentially the Defense Contract Management Agency (DCMA). The Cost Plus Award Fee structure necessitates close monitoring of performance and costs to ensure value for money. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance and cost breakdowns may be considered sensitive.

Related Government Programs

Defense Communications Systems
Electronic Warfare Equipment
Secure Communication Systems
Naval Warfare Systems

Risk Flags

Cost Plus Award Fee structure requires diligent oversight.
Follow-on nature may limit current competition.
Specific performance metrics and outcomes not detailed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200403!040073!1700!D0223 !SPACE AND NAVAL WARFARE SYSTEMS !N0003904C0022 !A!N! !N! ! !20031217!20050630!148037518!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8220 E ROOSEVELT ST !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARICOPA !ARIZONA !+000010562847!N!N!000021125694!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !1! ! ! ! ! !999

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 $27.5 million.

What is the period of performance?

Start: 2003-12-17. End: 2012-11-30.

What specific types of communications security equipment and components were procured under this contract?

The provided data indicates the contract is for 'COMMUNICATIONS SECURITY EQUIP AND COMPS' under NAICS code 334511, which covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' While the specific components are not itemized, this classification suggests equipment related to secure data transmission, encryption, signal intelligence, and potentially related hardware and software. The 'SPACE AND NAVAL WARFARE SYSTEMS' designation further implies applications within naval and space-based communication and security systems.

How does the $148 million contract value compare to similar procurements in the defense sector for communications security?

Comparing the $148 million contract value requires context on the specific technology, quantity, and duration. For specialized, high-security defense communications equipment, this amount over a nearly decade-long period (December 2003 to November 2012) is substantial but not necessarily out of line, especially if it involves research, development, and long-term sustainment. However, without detailed specifications of the equipment and services, a precise benchmark against other contracts is challenging. The Cost Plus Award Fee structure also means the final expenditure could differ from the initial award.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for this type of equipment?

The primary risks with a CPAF contract for communications security equipment include potential cost overruns if the contractor's costs exceed the target, and the government paying a premium for performance that may not be significantly better than a fixed-price contract. There's also a risk that the 'award' portion might be subjective or influenced by factors other than pure cost efficiency. Effective oversight is crucial to manage these risks, ensuring that the contractor is incentivized to control costs while meeting stringent performance requirements.

What is the significance of this contract being a 'FOLLOW ON TO COMPETED ACTION'?

Being a 'FOLLOW ON TO COMPETED ACTION' suggests that the initial requirement was competed, establishing a baseline understanding of the market and potential suppliers. However, the 'follow-on' aspect implies that this specific award may not have undergone the same level of full and open competition. This could be due to factors like contractor incumbency, specialized knowledge, or the need for continuity. While it leverages prior competition, it raises questions about the extent of current market engagement and potential price advantages that a new competition might yield.

What is General Dynamics Mission Systems' track record with similar defense contracts?

General Dynamics Mission Systems (GDMS) is a well-established defense contractor with extensive experience in developing and producing complex systems, including secure communications, command and control, and intelligence solutions. They have a history of performing on large, high-value contracts with various branches of the U.S. military and intelligence agencies. While specific performance details for this particular contract are not provided, GDMS's overall profile suggests a strong capability to handle the technical demands of communications security equipment.

How has federal spending on communications security equipment evolved since this contract was awarded?

Since this contract was awarded (ending in 2012), federal spending on communications security equipment has likely continued to increase, driven by evolving cyber threats, the need for advanced encryption, and the modernization of military networks. Investments in secure C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems remain a high priority for the Department of Defense. Technological advancements in areas like quantum-resistant cryptography and AI-driven security are likely shaping current and future procurements in this domain.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 8201 E MCDOWELL ROAD, SCOTTSDALE, AZ, 85257

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline