DoD's $26M engineering services contract awarded to General Dynamics Mission Systems raises questions on competition and value

Contract Overview

Contract Amount: $25,942,117 ($25.9M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-02-25

End Date: 2021-06-24

Contract Duration: 850 days

Daily Burn Rate: $30.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DESIGN AGENT SUPPORT - CPFF

Place of Performance

Location: PITTSFIELD, BERKSHIRE County, MASSACHUSETTS, 01201

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $25.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: DESIGN AGENT SUPPORT - CPFF Key points: 1. Contract awarded on a sole-source basis, limiting competitive pressure on pricing. 2. Cost-plus-fixed-fee structure may incentivize cost escalation. 3. Limited public data makes a comprehensive value-for-money assessment challenging. 4. Engineering services are critical for defense modernization, but oversight is key. 5. Contract duration of 850 days suggests a significant, ongoing need. 6. The contract falls under engineering services, a broad category with varying cost drivers.

Value Assessment

Rating: questionable

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is difficult without detailed cost breakdowns and comparisons to similar sole-source engineering support contracts. The total award amount of over $25.9 million over approximately two years suggests a substantial investment. However, the lack of competition inherently limits the government's ability to secure the most favorable pricing. Without transparency into the fixed fee and direct costs, it's hard to definitively assess if the pricing reflects fair market value or if there's potential for overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not conduct a competitive bidding process. This typically occurs when a specific contractor possesses unique capabilities or when urgency dictates a rapid award. The absence of multiple bidders means there was no direct price competition, which can lead to higher costs for the government compared to a fully competed contract. The justification for this sole-source award would need to be thoroughly reviewed to understand why competition was not feasible.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding. This can result in higher overall spending for the government on essential services.

Public Impact

The Department of Defense benefits from specialized engineering design agent support. Services likely contribute to the development, modification, or sustainment of defense systems. Geographic impact is likely concentrated around Navy facilities or contractor sites. Workforce implications include employment for engineers and technical specialists at General Dynamics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely managed.
Lack of detailed public cost breakdowns hinders independent value assessment.
Limited information on performance metrics makes it difficult to gauge effectiveness.

Positive Signals

Award to an established defense contractor suggests potential for reliable service delivery.
Engineering services are crucial for maintaining and advancing defense capabilities.
The contract addresses a specific need within the Department of the Navy.

Sector Analysis

This contract falls within the Engineering Services sector, a broad category encompassing a wide range of technical support for government and commercial clients. The market for defense engineering services is substantial, driven by the continuous need for modernization, research, and development of military systems. General Dynamics Mission Systems is a major player in this sector, competing with other large defense contractors. Benchmarking spending in this area is complex due to the specialized nature of defense projects, but significant government investment is typical for national security requirements.

Small Business Impact

The contract indicates that small business participation was not a primary consideration, as the awardee is a large corporation and the contract was not set aside for small businesses. There is no explicit mention of subcontracting goals for small businesses. This suggests that the direct impact on the small business ecosystem for this specific contract may be minimal, unless General Dynamics Mission Systems voluntarily includes small businesses in its subcontracting efforts.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. Accountability measures would be defined in the contract terms and conditions, including performance standards and payment schedules. Transparency is limited due to the sole-source nature and the proprietary details of cost-plus contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Naval Systems Development
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Cost-plus contract type
Limited transparency on cost details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.9 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. DESIGN AGENT SUPPORT - CPFF

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 $25.9 million.

What is the period of performance?

Start: 2019-02-25. End: 2021-06-24.

What specific engineering services were provided under this contract?

The data indicates the contract was for 'DESIGN AGENT SUPPORT - CPFF' awarded to General Dynamics Mission Systems, Inc. by the Department of the Navy. While the specific nature of 'design agent support' isn't detailed, it generally involves providing engineering expertise, technical analysis, design modifications, system integration, and potentially lifecycle support for defense systems. This could range from conceptual design to detailed engineering for specific components or platforms. The Cost Plus Fixed Fee (CPFF) contract type suggests that the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. Without access to the contract's SOW (Statement of Work), the precise deliverables and technical scope remain unspecified in the provided data.

How does the $25.9 million award compare to similar sole-source engineering contracts within the DoD?

Comparing this $25.9 million sole-source award to similar contracts is challenging without more specific details on the type of engineering services and the duration. However, large sole-source contracts for specialized engineering support are not uncommon within the Department of Defense, particularly when dealing with unique technological requirements or established systems where a single contractor possesses critical knowledge. The value itself is substantial, reflecting the complexity and importance of the support provided. To assess value, one would need to benchmark against other CPFF contracts for comparable services, considering factors like the contractor's overhead rates, the complexity of the systems supported, and the criticality of the engineering tasks. The lack of competition inherently makes direct value comparisons difficult.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract like this?

The primary risks associated with a sole-source CPFF contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved through a competitive bidding process. The government may not be getting the best possible value. Secondly, the CPFF structure, while providing cost certainty for the fee, can incentivize the contractor to incur higher costs, as their allowable costs are reimbursed. While the fixed fee itself doesn't increase with costs, the overall contract value (costs + fee) can escalate. Effective oversight, robust cost accounting standards, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value for its investment.

What is the track record of General Dynamics Mission Systems in delivering similar engineering services to the DoD?

General Dynamics Mission Systems, Inc. is a well-established and significant defense contractor with a long history of providing a wide array of services and products to the Department of Defense and other government agencies. They have extensive experience in areas such as command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems, cybersecurity, and various engineering and technical support services. Their track record generally includes the successful execution of complex programs, though like any large contractor, they may have faced challenges on specific projects. For this particular contract, assessing their performance would require reviewing specific contract performance reports (CPARs) and delivery orders issued under this award, which are not publicly available in this dataset.

How does the $25.9 million spending on engineering services compare to the DoD's overall budget for such services?

The Department of Defense's overall budget is vast, encompassing hundreds of billions of dollars annually across numerous categories. A single contract award of $25.9 million for engineering services, while substantial on its own, represents a relatively small fraction of the DoD's total spending on research, development, testing, and evaluation (RDT&E), as well as procurement and sustainment activities. Engineering services are integral to almost all defense programs. To contextualize this specific award, one would need to analyze the DoD's annual budget requests and outlays for engineering services, broken down by agency and service branch, to understand its proportion within the larger defense acquisition ecosystem.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $26,750,658

Exercised Options: $26,750,658

Current Obligation: $25,942,117

Actual Outlays: $2,919,661

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $3,933,447

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6339416G0005

IDV Type: BOA

Timeline