DoD's $33.8M contract for submarine systems support awarded to General Dynamics IT shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $33,788,827 ($33.8M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-08-23

End Date: 2025-05-15

Contract Duration: 2,822 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF THE CONTRACTOR SHALL PROVIDE CONTRACTOR/ENGINEERING AND TECHNICAL SUPPORT SERVICES IN THE AREAS OF SUBMARINE ANTENNA COMMUNICATIONS AND SURVEILLANCE SYSTEMS, SUBMARINE HULL, MECHANICAL AND ELECTRICAL (HM&E) SYSTEMS, COMMUNICATIONS AND CONTROL SYSTEMS AND SYSTEMS INTERFACING WITH SHIPS AND CARRIERS NETWORKS AND NAVIGATION&INTEGRATED BRIDGE CONTROLS, PROGRAMS AND PLATFORMS, HULL&DECK MACHINERY SYSTEMS, INTEGRATED LOGISTICS&FLEET MAINTENANCE AND THE SUBMARINE SAIL.

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22030

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF THE CONTRACTOR SHALL PROVIDE CONTRACTOR/ENGINEERING AND TECHNICAL SUPPORT SERVICES IN THE AREAS OF SUBMARINE ANTENNA COMMUNICATIONS AND SURVEILLANCE SYSTEMS, SUBMARINE HULL, MECHANICAL AND ELECTRICAL (HM&E) SYSTEMS, COMMUNICATIONS AND CONTROL SYSTEMS AND SYSTEMS INTE… Key points: 1. Contract provides critical engineering and technical support for submarine communication, surveillance, and maintenance systems. 2. General Dynamics IT, a large incumbent contractor, holds this award, suggesting potential for strong performance but also limited market entry. 3. The contract's duration and scope indicate a significant, long-term reliance on the contractor for specialized naval expertise. 4. Performance context is crucial given the sensitive nature of submarine systems and the need for continuous operational readiness. 5. Sector positioning highlights the specialized niche of naval engineering and technical services within the broader defense industry. 6. Risk indicators include potential for cost overruns in cost-plus contracts and the implications of sole-source or limited competition.

Value Assessment

Rating: good

The contract's total value of approximately $33.8 million over its period of performance appears reasonable for the specialized engineering and technical support services required for complex submarine systems. Benchmarking against similar contracts for naval engineering support is challenging due to the unique nature of submarine systems. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common in defense, necessitates careful oversight to ensure cost efficiency. The value proposition hinges on the contractor's ability to deliver sustained technical expertise and maintain the operational readiness of critical naval assets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was intended. This approach is generally favorable for price discovery and ensuring the government receives competitive offers. The success of this competition in driving down costs or maximizing value would depend on the number and capability of the participating firms.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it encourages a wider range of companies to bid, potentially leading to lower prices and better value for the government's investment.

Public Impact

The primary beneficiaries are the U.S. Navy's submarine fleet, ensuring the operational readiness and technological advancement of critical platforms. Services delivered include engineering and technical support for submarine antenna communications, surveillance systems, hull, mechanical and electrical systems, and integrated bridge controls. The geographic impact is primarily within naval facilities and shipyards where submarine maintenance and upgrades occur, with potential global implications for deployed assets. Workforce implications include the need for highly skilled engineers and technicians specializing in naval systems, supporting a specialized segment of the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep in a Cost Plus Fixed Fee (CPFF) contract if not rigorously managed.
Reliance on a single contractor for highly specialized submarine systems could create vendor lock-in.
The long duration of the contract (2017-2025) may limit opportunities for newer technologies or alternative solutions to be introduced.
Ensuring consistent quality and performance across all specified submarine systems requires robust oversight.

Positive Signals

Awarded under full and open competition, suggesting a competitive environment that should drive value.
General Dynamics IT is an established contractor with a track record in defense IT and engineering services.
The contract addresses critical national security needs related to submarine force readiness.
The defined period of performance and scope provide clarity for both the government and the contractor.

Sector Analysis

This contract falls within the Defense Engineering Services sector, a specialized area focused on providing technical expertise for complex military platforms. The market for submarine-specific engineering services is relatively niche, dominated by a few large defense contractors with the requisite security clearances and specialized knowledge. Spending in this area is driven by the need to maintain and modernize aging naval fleets and develop next-generation capabilities. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of submarine systems, but overall defense engineering services represent a significant portion of the DoD budget.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, General Dynamics Information Technology, Inc., is a large business. While there might be subcontracting opportunities for small businesses within the scope of this contract, the primary award does not directly benefit small businesses through a set-aside. The impact on the small business ecosystem would depend on the extent to which General Dynamics IT engages small businesses as subcontractors for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures would include performance reviews, milestone tracking, and adherence to the Cost Plus Fixed Fee (CPFF) terms. Transparency is generally limited for defense contracts due to national security considerations, but contract actions and basic details are often publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Submarine Maintenance, Modernization, and Repair Programs
Defense Engineering and Technical Services
Department of Defense IT and C4ISR Support Contracts
Fleet Readiness and Logistics Support

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition dynamics may impact price discovery.
Long contract duration could limit flexibility for future technological adoption.
Reliance on incumbent contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF THE CONTRACTOR SHALL PROVIDE CONTRACTOR/ENGINEERING AND TECHNICAL SUPPORT SERVICES IN THE AREAS OF SUBMARINE ANTENNA COMMUNICATIONS AND SURVEILLANCE SYSTEMS, SUBMARINE HULL, MECHANICAL AND ELECTRICAL (HM&E) SYSTEMS, COMMUNICATIONS AND CONTROL SYSTEMS AND SYSTEMS INTERFACING WITH SHIPS AND CARRIERS NETWORKS AND NAVIGATION&INTEGRATED BRIDGE CONTROLS, PROGRAMS AND PLATFORMS, HULL&DECK MACHINERY SYSTEMS, INTEGRATED LOGISTICS&FLEET MAINTENANCE AND THE SUBMARINE SAIL.

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 $33.8 million.

What is the period of performance?

Start: 2017-08-23. End: 2025-05-15.

What is General Dynamics IT's track record with similar submarine-related contracts for the U.S. Navy?

General Dynamics Information Technology, Inc. (GDIT) has a substantial history of supporting the U.S. Navy and other Department of Defense agencies with complex IT, engineering, and technical services. Their experience often includes work on naval platforms, including submarines, covering areas such as communications, combat systems, and lifecycle support. While specific contract details for submarine antenna, hull, mechanical, and electrical systems are not detailed here, GDIT's broad portfolio suggests they possess the necessary clearances, expertise, and infrastructure to handle such critical requirements. Their performance on past contracts, including those with similar CPFF structures, would be a key indicator of their capability and reliability for this ongoing award.

How does the value of this contract compare to other engineering support contracts for naval systems?

Comparing the $33.8 million value of this contract directly to other engineering support contracts for naval systems is challenging without more specific data on contract scope, duration, and complexity. However, for specialized engineering and technical support services for critical military assets like submarines, this value appears within a reasonable range, especially considering the extended performance period from 2017 to 2025. Contracts for similar high-level technical support, particularly those involving classified systems or unique platform expertise, often run into tens of millions of dollars. The value is intrinsically tied to the highly specialized knowledge and long-term commitment required, which typically commands premium pricing in the defense sector.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure, like the one awarded to General Dynamics IT, revolve around cost control and contractor incentive. While the fixed fee provides the contractor with a predictable profit margin, the 'cost plus' element means the government reimburses allowable costs incurred by the contractor. This can create a risk of cost overruns if the contractor's cost management is not rigorous or if unforeseen technical challenges arise. The government bears the brunt of cost increases above the estimate, although the fee remains fixed. Effective oversight, detailed cost tracking, and clear definition of allowable costs are crucial to mitigate these risks and ensure value for taxpayer money.

How effective is the 'full and open competition' in ensuring optimal value for this specialized defense service?

The 'full and open competition' designation suggests that the contract was awarded after soliciting offers from all responsible sources, which is generally the most effective method for ensuring optimal value. This approach maximizes the pool of potential bidders, fostering a competitive environment that should drive down prices and encourage innovation. However, the effectiveness in practice depends on the actual number and quality of bids received. For highly specialized services like submarine systems engineering, the market may be limited, potentially reducing the competitive pressure. Nevertheless, initiating the process with full and open competition provides the best opportunity to secure competitive pricing and identify the most capable contractor.

What are the historical spending patterns for submarine systems engineering support within the Department of the Navy?

Historical spending patterns for submarine systems engineering support within the Department of the Navy are characterized by consistent, long-term investments driven by the strategic importance of the submarine force. Budgets allocated to these areas typically reflect the lifecycle needs of submarine platforms, including research and development, acquisition, sustainment, and modernization. Spending fluctuates based on new platform development, upgrades to existing fleets, and evolving technological requirements. Contracts like this one, awarded under full and open competition, represent a portion of this broader spending, indicating a sustained demand for specialized engineering expertise to maintain and enhance the capabilities of the U.S. submarine fleet over many years.

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: N0002416R3405

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3150 FAIRVIEW PARK DR STE 100, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,083,291

Exercised Options: $40,083,291

Current Obligation: $33,788,827

Actual Outlays: $3,931,698

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,771,990

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4012

IDV Type: IDC

Timeline