DoD's $40M contract for engineering services awarded to General Dynamics IT shows fair competition and potential value concerns

Contract Overview

Contract Amount: $40,004,428 ($40.0M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-04-01

End Date: 2013-03-31

Contract Duration: 1,825 days

Daily Burn Rate: $21.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: ENGINEERING & TECHNICAL SERVICES FOR ELECTROMAGNETIC SYSTEMS

Place of Performance

Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: ENGINEERING & TECHNICAL SERVICES FOR ELECTROMAGNETIC SYSTEMS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract's duration of 5 years (1825 days) indicates a long-term need for these services. 3. The pricing structure is 'Cost No Fee,' which requires careful monitoring to ensure cost control. 4. The award was a delivery order, implying it's part of a larger contract vehicle. 5. The specific NAICS code (541330) points to a focus on engineering services. 6. The contract was awarded to a single entity, General Dynamics Information Technology, Inc.

Value Assessment

Rating: fair

The contract's value of approximately $40 million over five years averages to $8 million annually. Without specific benchmarks for similar engineering and technical services for electromagnetic systems, a definitive value-for-money assessment is challenging. The 'Cost No Fee' pricing structure, while common, necessitates robust oversight to prevent cost overruns and ensure the government only pays for reasonable and allocable costs. Comparing this to other contracts for similar services within the Department of Defense or other agencies would be crucial for a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The data shows one award, which is typical for a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a specific task order. The level of competition for the underlying IDIQ or the specific task order process is not detailed, but the initial award method suggests a broad solicitation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions. However, the ultimate impact on price depends on the number of bids received and the effectiveness of the evaluation process.

Public Impact

The Department of the Navy benefits from specialized engineering and technical services for its electromagnetic systems. These services likely support the development, maintenance, or enhancement of critical defense capabilities. The contract's geographic impact is noted as Rhode Island, suggesting a concentration of work or personnel in that state. The workforce implications include potential employment opportunities for engineers and technical specialists in Rhode Island and potentially other locations where General Dynamics IT operates.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' contract type requires diligent oversight to ensure cost containment and prevent contractor profit from exceeding agreed-upon levels without commensurate performance.
The long duration of the contract (5 years) could lead to scope creep or a reduction in competitive pressure if not managed effectively.
Lack of specific performance metrics or outcome-based evaluations in the provided data makes it difficult to assess the true effectiveness and efficiency of the services.

Positive Signals

Awarded through 'full and open competition,' which typically promotes a competitive environment and potentially better pricing.
The contract is with a large, established defense contractor (General Dynamics Information Technology, Inc.), suggesting a level of experience and capability.
The contract addresses a specific technical need (engineering & technical services for electromagnetic systems), indicating a focused and necessary procurement.

Sector Analysis

The defense sector, particularly within the Department of the Navy, relies heavily on specialized engineering and technical services to maintain and advance its complex systems. Electromagnetic systems are critical for communication, radar, electronic warfare, and other vital functions. The market for these services is competitive, with numerous large and small businesses offering expertise. This contract fits within the broader category of defense engineering services, which represents a significant portion of federal IT and professional services spending. Benchmarks for similar contracts would typically be found within defense spending databases and industry reports focusing on aerospace and defense engineering.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). General Dynamics Information Technology, Inc. is a large prime contractor. While there is no direct information on subcontracting plans, large prime contractors are often required to have small business subcontracting goals. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were limited, though they may still participate as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a 'Cost No Fee' contract, rigorous financial oversight is essential to ensure that costs incurred by the contractor are reasonable, allocable, and allowable. Transparency would be facilitated through contract reporting mechanisms and potentially through the Federal Procurement Data System (FPDS). Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Engineering Services
Electromagnetic Systems Procurement
Naval Technology Development
Professional Services Contracts
Cost-Plus Contracts

Risk Flags

Cost Control Risk (Cost No Fee)
Long-Term Contract Management
Performance Measurement Clarity
Competition Level for Task Orders

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. ENGINEERING & TECHNICAL SERVICES FOR ELECTROMAGNETIC SYSTEMS

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, 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 $40.0 million.

What is the period of performance?

Start: 2008-04-01. End: 2013-03-31.

What is the track record of General Dynamics Information Technology, Inc. in delivering similar engineering and technical services for electromagnetic systems to the Department of Defense?

General Dynamics Information Technology, Inc. (GDIT) has a substantial track record with the Department of Defense (DoD) across a wide array of IT and engineering services. While specific details on their performance for electromagnetic systems under this particular contract are not provided, GDIT is a major defense contractor known for supporting complex military programs. Their past performance reviews, available through government databases like the Contractor Performance Assessment Reporting System (CPARS), would offer insights into their reliability, quality of work, and adherence to schedule and budget on previous engagements. Analyzing their broader portfolio of defense contracts can indicate their capacity and expertise in specialized technical domains like electromagnetic systems, though direct comparisons require access to detailed performance data.

How does the $40 million contract value compare to other federal spending on similar engineering services for electromagnetic systems?

The $40 million contract value over five years, averaging $8 million annually, represents a moderate investment for specialized engineering services within the defense sector. To benchmark this, one would need to compare it against the total federal spending on NAICS code 541330 (Engineering Services), specifically within the Department of Defense and for electromagnetic systems. Data from the Federal Procurement Data System (FPDS) or similar repositories could reveal the average contract size, the number of awards, and the range of values for comparable procurements. Without this comparative data, it's difficult to definitively state if $40 million is high, low, or average. However, given the critical nature of electromagnetic systems in defense, such a value is not unusual for long-term, specialized support.

What are the primary risks associated with a 'Cost No Fee' contract type for these services?

The primary risk with a 'Cost No Fee' (CNF) contract type is the potential for cost overruns without a corresponding increase in contractor profit. While the contractor does not earn a fee, they are reimbursed for allowable, allocable, and reasonable costs incurred. This structure places a significant burden on the government to meticulously monitor and audit the contractor's expenses to ensure they are justified and necessary for contract performance. Risks include the contractor not having sufficient incentive to control costs aggressively, potential for inefficient practices, and the administrative burden of detailed cost auditing. If costs escalate beyond expectations, the total expenditure can still be substantial, impacting the overall value for the taxpayer.

How effective is 'full and open competition' in ensuring optimal value for taxpayers on complex engineering contracts?

Full and open competition is generally considered the most effective method for ensuring optimal value for taxpayers, as it theoretically maximizes the pool of potential bidders, fosters price competition, and encourages innovation. However, its effectiveness is contingent on several factors. For complex engineering services, the number of qualified bidders might be limited, potentially reducing the competitive pressure. The government's ability to clearly define requirements and evaluate proposals objectively is also critical. If the competition is robust (many qualified bidders) and the evaluation process is sound, it typically leads to better pricing and higher quality solutions. Conversely, poorly defined requirements or a flawed evaluation can diminish the value realized, even with open competition.

What are the implications of awarding a delivery order under a larger contract vehicle for this type of service?

Awarding a delivery order (DO) under a larger contract vehicle, such as an Indefinite Delivery/Indefinite Quantity (IDIQ) contract, means this specific $40 million action is one of potentially many orders placed against a pre-established master contract. This approach offers flexibility for the government to procure services as needed over a defined period. For taxpayers, it can streamline the acquisition process and potentially leverage pre-negotiated terms and pricing. However, the overall value and cost-effectiveness depend on the terms of the master IDIQ contract and how effectively subsequent delivery orders are competed or managed. If the master contract itself was awarded competitively and offers favorable terms, the DOs are likely to provide good value. If the master contract lacks strong price controls or competitive elements, the DOs could become more expensive over time.

What is the historical spending pattern for engineering and technical services for electromagnetic systems by the Department of the Navy?

Analyzing historical spending patterns for engineering and technical services related to electromagnetic systems by the Department of the Navy (DoN) requires access to detailed procurement data over multiple fiscal years. This would involve querying databases like FPDS using relevant NAICS codes (e.g., 541330) and product/service codes, filtered for the DoN and terms related to 'electromagnetic systems.' Such an analysis would reveal trends in contract values, the number of awards, dominant contractors, and the evolution of spending in this niche. Without specific historical data, it's presumed that spending in this area is driven by technological advancements, modernization programs, and national security requirements, likely showing consistent or increasing investment due to the critical role of electromagnetic spectrum operations in modern warfare.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002407R3525

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,289,011

Exercised Options: $40,289,011

Current Obligation: $40,004,428

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4012

IDV Type: IDC

Timeline