DoD's $18M contract for SSTD systems engineering and support awarded to General Dynamics IT

Contract Overview

Contract Amount: $17,983,078 ($18.0M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-24

End Date: 2026-09-23

Contract Duration: 1,095 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DESIGN, ENGINEERING, ASSEMBLY, INTEGRATION, INSTALLATION, DOCUMENTATION, TESTING, PREVENTIVE AND CORRECTIVE MAINTENANCE, REPAIR, CYBERSECURITY, LAB OPERATIONS, TRAINING, PROJECT MANAGEMENT, AND LOGISTICAL SERVICE FOR SSTD SYSTEMS

Place of Performance

Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $18.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: DESIGN, ENGINEERING, ASSEMBLY, INTEGRATION, INSTALLATION, DOCUMENTATION, TESTING, PREVENTIVE AND CORRECTIVE MAINTENANCE, REPAIR, CYBERSECURITY, LAB OPERATIONS, TRAINING, PROJECT MANAGEMENT, AND LOGISTICAL SERVICE FOR SSTD SYSTEMS Key points: 1. The contract value of $17.98 million over three years suggests a significant investment in specialized engineering and logistical support. 2. General Dynamics Information Technology, Inc. secured this award, indicating their established presence and capability in supporting complex defense systems. 3. The contract type (Cost Plus Fixed Fee) implies that while costs are reimbursed, there's a pre-determined profit margin, requiring careful oversight of expenditures. 4. Awarded as a Delivery Order under a larger contract, this specific task order focuses on critical support for SSTD systems. 5. The duration of 1095 days (3 years) points to a long-term need for these services, essential for maintaining operational readiness. 6. The absence of small business set-aside flags suggests this contract was awarded based on broad capabilities rather than specific small business targeting.

Value Assessment

Rating: good

The contract's value of approximately $18 million over three years for engineering, integration, and maintenance of SSTD systems appears reasonable given the specialized nature of defense systems. Benchmarking against similar complex system support contracts within the Department of Defense would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee structure necessitates diligent monitoring of actual costs to ensure they align with the fixed fee and do not escalate unnecessarily.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process designed to solicit the best value. This approach typically leads to more competitive pricing and a wider pool of potential solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where contractors are incentivized to offer competitive pricing and innovative solutions to win awards.

Public Impact

The Department of the Navy benefits from the continued operational readiness and support of its SSTD systems. Services delivered include design, engineering, assembly, integration, installation, documentation, testing, maintenance, repair, cybersecurity, lab operations, training, project management, and logistical support. The geographic impact is likely concentrated around naval facilities and operational areas where SSTD systems are deployed or maintained. Workforce implications include the employment of skilled engineers, technicians, and support personnel by General Dynamics Information Technology, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require robust oversight to manage potential cost overruns and ensure the fixed fee remains appropriate.
The broad scope of services necessitates clear performance metrics and quality assurance to ensure all aspects of the contract are met effectively.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that likely yielded favorable pricing and capabilities.
General Dynamics Information Technology, Inc. is a large, established contractor with a track record in defense IT and systems support.
The contract duration of three years indicates a stable, long-term requirement, allowing for efficient planning and execution of services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting complex defense systems. The market for defense engineering and integration services is substantial, driven by the continuous need for modernization, maintenance, and upgrades of military platforms. General Dynamics Information Technology, Inc. operates within a competitive landscape of large defense contractors vying for these specialized service contracts. Spending benchmarks for similar system support contracts can vary widely based on system complexity and scope, but an $18 million award over three years for specialized SSTD systems is indicative of a significant, high-value requirement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. This suggests that the primary award was made based on the capabilities of the prime contractor, General Dynamics Information Technology, Inc. However, it is common for large prime contractors to engage small businesses as subcontractors to fulfill specific requirements or to meet broader subcontracting goals, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely involve the Department of the Navy's contracting officers and program managers. They will be responsible for monitoring expenditures, ensuring compliance with contract terms, and verifying performance against deliverables. The fixed fee component requires careful scrutiny of incurred costs to ensure they are reasonable and allocable. Transparency is typically managed through regular reporting requirements from the contractor and contract performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Naval Systems Support
IT and Cybersecurity Services for Defense
Logistical Support for Military Systems
Systems Integration and Testing

Risk Flags

Cost Plus Fixed Fee contract requires diligent cost monitoring.
Scope definition for complex engineering services needs clear articulation.
Cybersecurity implications for defense systems are critical.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. DESIGN, ENGINEERING, ASSEMBLY, INTEGRATION, INSTALLATION, DOCUMENTATION, TESTING, PREVENTIVE AND CORRECTIVE MAINTENANCE, REPAIR, CYBERSECURITY, LAB OPERATIONS, TRAINING, PROJECT MANAGEMENT, AND LOGISTICAL SERVICE FOR SSTD 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 $18.0 million.

What is the period of performance?

Start: 2023-09-24. End: 2026-09-23.

What is the historical spending pattern for SSTD systems support by the Department of the Navy?

Analyzing historical spending for SSTD systems support by the Department of the Navy requires access to detailed contract databases and budget allocations over several fiscal years. Without specific historical data for SSTD systems, it's challenging to provide precise figures. However, defense systems like SSTD typically require consistent investment in engineering, maintenance, and upgrades throughout their lifecycle. Spending can fluctuate based on modernization programs, operational tempo, and the introduction of new technologies. Contracts for such systems often span multiple years, with values ranging from millions to tens of millions of dollars annually, depending on the system's complexity and strategic importance. The current $18 million award over three years suggests a sustained level of support, consistent with the long-term needs of critical defense infrastructure.

How does the Cost Plus Fixed Fee (CPFF) structure impact contractor incentives and government oversight for this contract?

The Cost Plus Fixed Fee (CPFF) contract structure reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as any savings below the estimated cost do not reduce their fixed fee, while significant cost overruns could lead to scrutiny and potential disputes. For the government, CPFF requires robust oversight to ensure that all costs claimed are reasonable, allocable, and allowable under the contract terms. The fixed fee provides a predictable profit margin, but the government must actively monitor expenditures to prevent unnecessary spending that could inflate the total contract value. This requires diligent auditing and performance management by the contracting officer and program team.

What are the key performance indicators (KPIs) likely used to evaluate General Dynamics Information Technology, Inc.'s performance on this contract?

Key Performance Indicators (KPIs) for this contract would likely focus on the successful delivery of engineering, integration, maintenance, and support services for SSTD systems. These could include metrics such as on-time delivery of documentation and system updates, system uptime and availability rates, successful completion of testing phases, response times for corrective maintenance and cybersecurity incidents, and adherence to project management milestones. Customer satisfaction surveys from naval personnel utilizing the SSTD systems, as well as adherence to budget and schedule for specific task orders, would also be critical. The effectiveness of training provided and the successful integration of new system components would also be closely monitored.

What is the typical lifecycle cost for complex defense systems like SSTD, and how does this contract fit within that?

The lifecycle cost for complex defense systems, such as SSTD (Surface Ship Torpedo Defense) systems, encompasses acquisition, operation, sustainment, and disposal. Operation and sustainment costs, which include maintenance, repair, upgrades, training, and personnel, often represent a significant portion, sometimes exceeding the initial acquisition cost over the system's lifespan. This $18 million contract, awarded for engineering, assembly, integration, installation, documentation, testing, maintenance, repair, cybersecurity, and logistical services, falls squarely within the sustainment phase. It aims to ensure the SSTD systems remain effective, operational, and secure throughout their service life, thereby managing a crucial component of the overall lifecycle cost and supporting the Navy's mission readiness.

What are the potential risks associated with a Cost Plus Fixed Fee contract for complex defense systems?

Potential risks with CPFF contracts for complex defense systems include the government bearing the risk of cost overruns if not adequately managed, leading to higher-than-expected total expenditures. There's also a risk that the contractor might not be sufficiently incentivized to innovate or find cost-saving efficiencies beyond what is necessary to meet the fixed fee. Furthermore, defining 'allowable costs' and ensuring accurate cost accounting can be complex and require significant government oversight resources. For the contractor, the risk lies in accurately estimating costs to ensure the fixed fee is profitable, especially if unforeseen technical challenges or scope changes arise. Effective risk mitigation relies on clear contract terms, robust oversight, and strong communication between the government and contractor.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6660422R3008

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: $54,056,562

Exercised Options: $36,819,863

Current Obligation: $17,983,078

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $1,274,017

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7693

IDV Type: IDC

Timeline