DoD's $36M contract for forging sets and warhead housings awarded to General Dynamics OTS, Inc

Contract Overview

Contract Amount: $35,976,015 ($36.0M)

Contractor: General Dynamics OTS (DRI), Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-20

End Date: 2028-03-20

Contract Duration: 3,104 days

Daily Burn Rate: $11.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FORGING SETS AND WARHEAD HOUSINGS

Place of Performance

Location: ANNISTON, CALHOUN County, ALABAMA, 36207

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $36.0 million to GENERAL DYNAMICS OTS (DRI), INC. for work described as: FORGING SETS AND WARHEAD HOUSINGS Key points: 1. The contract's value of $35.98 million over its duration suggests a significant investment in specialized manufacturing capabilities. 2. Awarded on a sole-source basis, the lack of competition may limit price discovery and potentially increase costs for taxpayers. 3. The long performance period (2019-2028) indicates a sustained need for these components, potentially tied to long-term defense programs. 4. The firm-fixed-price contract type shifts cost risk to the contractor, which can be beneficial for budget predictability. 5. The absence of small business set-aside flags raises questions about opportunities for smaller firms in this specialized supply chain. 6. The contract's focus on missile and space vehicle parts places it within a high-stakes, technologically advanced defense sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific cost breakdowns or comparisons to similar sole-source awards. The total obligation of $35.98 million over nearly nine years implies an average annual spend of approximately $4 million. Given the specialized nature of forging warhead housings and sets, this figure might be reasonable if it reflects high material costs, complex manufacturing processes, and stringent quality control requirements. However, the lack of competitive bidding prevents a definitive assessment of whether this represents optimal value for money compared to what could be achieved in a more open market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics OTS, Inc., was solicited. This approach is typically justified when a unique capability or proprietary technology is required, or when only one responsible source exists. The lack of competition means that the government did not benefit from multiple bids, which could have driven down prices through a more robust price discovery process. This raises concerns about whether the negotiated price truly reflects the best possible value.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure lower prices, potentially leading to higher costs for taxpayers. Without competitive pressure, there is a reduced incentive for the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring advanced missile and warhead components. The contract delivers critical components for defense systems, contributing to national security capabilities. The geographic impact is primarily centered in Alabama, where General Dynamics OTS, Inc. is located, potentially supporting local employment and economic activity. The contract supports specialized manufacturing jobs within the defense industrial base, requiring skilled labor in forging and metalworking.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Long contract duration without clear performance milestones for review.
Absence of small business participation raises concerns about equitable distribution of defense contracts.

Positive Signals

Firm-fixed-price contract type provides budget certainty by shifting cost overrun risks to the contractor.
Award to an established defense contractor suggests a degree of reliability and existing capability.
Contract supports critical defense manufacturing, contributing to national security objectives.

Sector Analysis

This contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector (NAICS 336419). This is a highly specialized segment of the aerospace and defense industry, characterized by high barriers to entry due to technological complexity, stringent quality standards, and significant capital investment. The market is often dominated by a few key players capable of meeting the demanding requirements of defense programs. Spending in this sector is directly tied to defense appropriations and the development and sustainment of advanced weapon systems.

Small Business Impact

The contract data indicates that this was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was either awarded to a large business or that the nature of the required specialized manufacturing capabilities (forging sets and warhead housings) made it unsuitable for small business participation. There is no explicit mention of subcontracting plans for small businesses, which could mean missed opportunities for smaller firms to engage in this segment of the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract with a firm-fixed-price structure, performance monitoring and compliance checks are standard. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. The long duration necessitates ongoing oversight to ensure continued relevance and value.

Related Government Programs

Guided Missile and Space Vehicle Parts Manufacturing
Defense Industrial Base Manufacturing
Ordnance and Ammunition Manufacturing
Aerospace Parts Manufacturing

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of detailed cost breakdown hinders value-for-money assessment.
Long contract duration requires sustained oversight.
Absence of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.0 million to GENERAL DYNAMICS OTS (DRI), INC.. FORGING SETS AND WARHEAD HOUSINGS

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS OTS (DRI), 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 $36.0 million.

What is the period of performance?

Start: 2019-09-20. End: 2028-03-20.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis to General Dynamics OTS, Inc.?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source, urgent and compelling needs, or when the acquisition is for a unique product or service. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to ascertain the precise rationale. This lack of transparency is a common concern with sole-source contracts, as it limits the public's understanding of why competitive procedures were bypassed and whether the government truly received the best value.

How does the per-unit cost of these forged sets and warhead housings compare to industry benchmarks or similar government contracts?

The provided data does not contain per-unit cost information, making a direct comparison to industry benchmarks or similar contracts impossible. The total contract value of $35.98 million is spread over an unspecified quantity of 'forging sets and warhead housings' over a period of nearly nine years. To perform a per-unit cost analysis, one would need the total number of units procured under this contract and the associated cost per unit. Without this granular data, any assessment of cost-effectiveness remains speculative. Benchmarking would require access to similar sole-source or competitively awarded contracts for comparable components, along with their respective unit prices and specifications.

What are the key performance indicators (KPIs) and quality assurance measures in place for this contract to ensure the reliability and effectiveness of the delivered components?

The provided data does not detail the specific Key Performance Indicators (KPIs) or quality assurance (QA) measures for this contract. However, given the nature of the components (warhead housings and sets), it is highly probable that stringent QA protocols are mandated by the Department of the Navy. These would likely include adherence to specific military standards (e.g., MIL-STD), rigorous material testing, dimensional inspections, non-destructive testing (NDT), and traceability of materials and processes. Performance would be measured against delivery schedules and adherence to technical specifications. The firm-fixed-price nature of the contract implies that the contractor bears the responsibility for meeting these quality standards to avoid penalties or contract termination.

What is the historical spending pattern for forging sets and warhead housings by the Department of the Navy, and how does this contract fit into that pattern?

The provided data only includes details for this specific contract (awarded 2019, ending 2028). It does not offer historical spending data for similar components. To understand the historical pattern, one would need to analyze past contracts for forging sets and warhead housings awarded by the Department of the Navy or other defense agencies. This would involve searching contract databases for previous awards, examining their values, durations, contractors, and competition levels. This current $35.98 million contract appears to be a significant, long-term commitment, suggesting either a sustained or increasing demand for these specific components within the Navy's armament programs. Without historical context, it's difficult to determine if this represents an increase, decrease, or steady level of spending.

What is the track record of General Dynamics OTS, Inc. in fulfilling similar defense manufacturing contracts, particularly those involving sensitive or high-specification components?

General Dynamics OTS, Inc. is a known entity within the defense manufacturing sector. While specific details of their past performance on similar contracts are not provided in this data snippet, the company is generally recognized for its capabilities in producing ordnance, propulsion systems, and other defense-related components. Their track record would typically be assessed by the awarding agency (Department of the Navy) through past performance evaluations during the procurement process. A sole-source award, especially for critical components like warhead housings, often implies that the agency has confidence in the contractor's ability to deliver based on prior experience or specialized expertise. A comprehensive review would involve examining their contract history, any reported performance issues, and their overall reputation within the defense industrial base.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6893618R0066

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 1425 COMMERCE BLVD, ANNISTON, AL, 36207

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

Financial Breakdown

Contract Ceiling: $35,976,015

Exercised Options: $35,976,015

Current Obligation: $35,976,015

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline