DoD Awards $756M Contract to General Dynamics for Electronic Computer Manufacturing
Contract Overview
Contract Amount: $7,563,182 ($7.6M)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-11-03
End Date: 2026-03-31
Contract Duration: 1,244 days
Daily Burn Rate: $6.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: TYPE 3EP AMC COMPILER
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55431
Plain-Language Summary
Department of Defense obligated $7.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: TYPE 3EP AMC COMPILER Key points: 1. Significant contract value of $756.3 million. 2. General Dynamics Mission Systems, Inc. is the sole awardee. 3. Contract is for electronic computer manufacturing, a critical defense sector. 4. Potential for cost overruns due to Cost Plus Fixed Fee pricing.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type allows for potential cost increases beyond initial estimates. Without a competitive bidding process, it's difficult to assess if the fixed fee adequately compensates the contractor for the effort and if the overall cost is reasonable compared to market rates for similar manufacturing services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for the government compared to a fully competitive process. The rationale for sole-sourcing is not provided, which raises concerns about market fairness.
Taxpayer Impact: The lack of competition and the Cost Plus Fixed Fee structure could lead to taxpayers bearing higher costs than necessary for these electronic computer manufacturing services.
Public Impact
Ensures continued supply of critical electronic computer components for the Navy. Supports a major defense contractor, potentially impacting jobs and the defense industrial base. Lack of transparency in pricing due to sole-source award. Potential for cost escalation impacting defense budget allocations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Fixed Fee pricing can lead to cost overruns.
- No clear justification for sole-sourcing provided.
- Long contract duration (1244 days) increases exposure to price fluctuations.
Positive Signals
- Ensures critical component supply for the Department of the Navy.
- Award to established defense contractor General Dynamics.
Sector Analysis
This contract falls under the Electronic Computer Manufacturing sector, which is vital for defense systems. Spending benchmarks in this area can vary widely based on technological complexity and volume. The $756 million award is substantial and indicates a significant requirement for these components.
Small Business Impact
The data indicates that neither small business set-aside nor small business participation was specified for this contract. This suggests that small businesses were not prioritized in the award process, potentially limiting their opportunities within this significant defense procurement.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is performing efficiently and that costs are reasonable. The Department of the Navy should have robust internal controls and auditing processes in place to monitor this large contract.
Related Government Programs
- Electronic Computer Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Cost Plus Fixed Fee pricing
- No small business consideration
- Long contract duration
- Unclear justification for sole-sourcing
Tags
electronic-computer-manufacturing, department-of-defense, mn, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. TYPE 3EP AMC COMPILER
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 $7.6 million.
What is the period of performance?
Start: 2022-11-03. End: 2026-03-31.
What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Typically, this involves demonstrating that only one source can meet the requirement due to unique capabilities, urgency, or proprietary technology. Without this justification, it's difficult to assess if the government received the best possible value and if taxpayers' funds were used efficiently. Robust price analysis and negotiation are essential in such cases.
How will the Cost Plus Fixed Fee structure be managed to prevent cost overruns and ensure efficient performance by General Dynamics Mission Systems, Inc.?
Managing a Cost Plus Fixed Fee (CPFF) contract requires stringent oversight. The government must closely monitor all incurred costs to ensure they are allowable, allocable, and reasonable. Performance metrics should be established to incentivize efficiency. Regular audits and reviews of the contractor's cost accounting practices are vital. The fixed fee itself should be negotiated based on a thorough understanding of the effort required and market benchmarks.
What is the anticipated impact of this contract on the overall defense budget and the availability of funds for other critical defense programs?
A contract of this magnitude, $756.3 million, represents a significant allocation of defense funds. Its impact on the overall budget depends on how it is funded (e.g., specific appropriations, multi-year funding). Large, non-competed contracts can strain budgets and potentially reduce flexibility for other programs. Careful budgeting and prioritization are necessary to ensure that essential defense capabilities are acquired without jeopardizing other critical needs.
Industry Classification
NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing
Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS
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
Address: 8800 QUEEN AVE S, BLOOMINGTON, MN, 55431
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $7,563,182
Exercised Options: $7,563,182
Current Obligation: $7,563,182
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $3,939,752
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0042121G0010
IDV Type: BOA
Timeline
Start Date: 2022-11-03
Current End Date: 2026-03-31
Potential End Date: 2026-03-31 00:00:00
Last Modified: 2025-12-19
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