DoD awards $13.3M for DDG modernization backfit, with General Dynamics leading the effort

Contract Overview

Contract Amount: $13,284,228 ($13.3M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2026-09-30

Contract Duration: 1,098 days

Daily Burn Rate: $12.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROVIDE MANAGEMENT, LABOR, MATERIAL AND INSTALLATION SERVICES TO ACCOMPLISH DDG MODERNIZATION BACKFIT (DDGM BF) CORE SHIP ALTERATION INSTALLATION ON BOARD DDG-92

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $13.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PROVIDE MANAGEMENT, LABOR, MATERIAL AND INSTALLATION SERVICES TO ACCOMPLISH DDG MODERNIZATION BACKFIT (DDGM BF) CORE SHIP ALTERATION INSTALLATION ON BOARD DDG-92 Key points: 1. Contract focuses on essential ship alterations for DDG-92, a critical naval asset. 2. General Dynamics Information Technology, Inc. secured the award, indicating established capabilities. 3. The contract type (Cost Plus Fixed Fee) suggests potential for cost overruns if not managed closely. 4. A 3-year duration indicates a significant, multi-phase modernization project. 5. The award falls under the Ship Building and Repairing NAICS code, aligning with defense industrial base activities. 6. This specific backfit addresses core modernization needs, implying a focus on maintaining fleet readiness.

Value Assessment

Rating: fair

The contract value of $13.3 million for modernization services appears reasonable given the scope of backfitting a guided-missile destroyer. However, without specific benchmarks for DDG modernization projects or detailed cost breakdowns, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk, as costs can escalate beyond initial estimates if not rigorously controlled. Comparing this to similar DDG modernization efforts would provide better context for pricing and efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple capable contractors had the opportunity to bid. This competitive process is generally favorable for price discovery and ensuring the government receives competitive offers. The presence of two bidders, as indicated by 'no': 2, is a moderate level of competition. While more bidders could potentially drive prices lower, two bidders still provide a basis for comparison and negotiation.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to vie for the contract, potentially leading to lower prices and better value. This process helps ensure that taxpayer funds are used efficiently by leveraging market forces.

Public Impact

The primary beneficiaries are the U.S. Navy's fleet readiness and operational capabilities, specifically for the DDG-92. Services delivered include core ship alteration installations for modernization backfitting. The geographic impact is localized to where the DDG-92 is stationed or undergoing maintenance. Workforce implications include skilled labor in shipbuilding, repair, and technical services, likely concentrated in specific naval shipyards or contractor facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
Limited competition (2 bidders) may not have yielded the lowest possible price.
The duration of the contract (nearly 3 years) increases the risk of scope creep or unforeseen technical challenges.

Positive Signals

Awarded under full and open competition, ensuring a broad range of potential contractors could participate.
General Dynamics Information Technology, Inc. is an established contractor, suggesting a degree of reliability and expertise.
The contract addresses critical modernization needs, directly supporting naval asset readiness.

Sector Analysis

The Ship Building and Repairing sector (NAICS 336611) is a vital component of the defense industrial base. This contract fits within the broader category of naval vessel maintenance and modernization, which is a continuous requirement for maintaining a modern fleet. Spending in this sector is often characterized by large, complex projects requiring specialized skills and facilities. Comparable spending benchmarks would typically involve other modernization contracts for similar naval platforms.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless General Dynamics Information Technology, Inc. voluntarily includes small businesses in its subcontracting plans.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Given the CPFF structure, rigorous financial oversight and performance monitoring are crucial to control costs and ensure adherence to the fixed fee. Transparency is typically managed through contract reporting mechanisms and potentially through Inspector General reviews if performance or cost issues arise.

Related Government Programs

Naval Ship Modernization Programs
Guided Missile Destroyer (DDG) Fleet Sustainment
Defense Contractor Services
Shipbuilding and Repair Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Limited number of bidders (2) may indicate potential barriers to entry or a niche market.
Long contract duration (nearly 3 years) increases exposure to market volatility and technical challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PROVIDE MANAGEMENT, LABOR, MATERIAL AND INSTALLATION SERVICES TO ACCOMPLISH DDG MODERNIZATION BACKFIT (DDGM BF) CORE SHIP ALTERATION INSTALLATION ON BOARD DDG-92

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 $13.3 million.

What is the period of performance?

Start: 2023-09-28. End: 2026-09-30.

What is the track record of General Dynamics Information Technology, Inc. with similar naval modernization contracts?

General Dynamics Information Technology, Inc. (GDIT) has a substantial track record with the Department of Defense, including numerous contracts related to IT services, C4ISR systems, and platform modernization across various naval vessels. While specific details on their performance for DDG modernization backfits require deeper analysis of past contract performance reports (e.g., CPARS), GDIT's position as a major defense contractor suggests they possess the necessary experience and infrastructure. Their portfolio often includes complex integration, installation, and sustainment services, aligning with the requirements of this DDGM BF contract. Further investigation into their historical performance on similar-sized and scoped projects would provide a more precise assessment of their reliability and efficiency in executing this specific type of modernization.

How does the $13.3 million cost compare to other DDG modernization efforts?

Benchmarking the $13.3 million cost for this DDG modernization backfit requires comparing it against similar projects for Arleigh Burke-class destroyers or comparable naval platforms. Modernization costs can vary significantly based on the specific systems being upgraded, the extent of the backfit, the shipyard performing the work, and the contract type. For instance, upgrades to combat systems, propulsion, or habitability can have vastly different cost implications. A Cost Plus Fixed Fee (CPFF) contract, as used here, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed tightly, due to the reimbursement of direct costs plus a fixed fee. Without access to a database of comparable DDG modernization contracts and their specific scopes, it is difficult to definitively state whether $13.3 million represents excellent, fair, or concerning value. However, it falls within a plausible range for significant ship alterations.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for ship modernization?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract for ship modernization, such as the DDG-92 backfit, is the potential for cost escalation. While the contractor's fee is fixed, the government bears the risk of reimbursing all allowable costs incurred. This structure can incentivize contractors to incur higher costs if oversight is not stringent, as their profit margin (the fixed fee) remains constant regardless of the total project cost. For complex, multi-year projects like ship modernization, unforeseen technical challenges, material price fluctuations, or labor inefficiencies can significantly drive up the direct costs. Effective risk mitigation requires robust government oversight, detailed cost tracking, clear definition of allowable costs, and proactive management of project scope to prevent 'scope creep'.

What is the expected impact of this modernization on the DDG-92's operational effectiveness?

The 'DDGM BF Core Ship Alteration Installation' implies that this modernization backfit is intended to upgrade or integrate essential systems critical for the DDG-92's operational effectiveness. Modernization efforts typically aim to enhance capabilities, improve reliability, extend the service life of the vessel, or incorporate new technologies. This could involve upgrades to combat systems, sensors, communication suites, or even propulsion and power systems. By addressing 'core' alterations, the contract suggests a focus on fundamental improvements rather than peripheral enhancements. The successful completion of this backfit is expected to ensure the DDG-92 remains a capable asset within the fleet, meeting current operational requirements and potentially improving its performance metrics in areas such as survivability, lethality, or situational awareness.

How has spending on DDG modernization evolved over the past five years?

Analyzing historical spending trends for DDG modernization requires access to comprehensive federal procurement data. Generally, spending on naval vessel modernization is a consistent and significant part of the Department of Defense budget, driven by the need to maintain a technologically advanced and ready fleet. Factors influencing spending include the age of the fleet, the pace of technological advancement, geopolitical threats, and specific congressional appropriations. Over the past five years, there has likely been a sustained or potentially increasing investment in modernization as older platforms require upgrades to counter emerging threats and incorporate new capabilities. Specific figures for DDG modernization would reveal whether this particular contract aligns with broader spending patterns or represents a deviation.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

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: N6449823Q3103

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

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: $13,284,228

Exercised Options: $13,284,228

Current Obligation: $13,284,228

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $1,296,284

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6449821D0015

IDV Type: IDC

Timeline