DoD's $86.7M Engineering Services Contract Awarded to General Dynamics for Navy Support

Contract Overview

Contract Amount: $86,668,989 ($86.7M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-03-20

End Date: 2013-03-19

Contract Duration: 1,825 days

Daily Burn Rate: $47.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NED SUPPORT SERVICES

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92147

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $86.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: NED SUPPORT SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's duration of 1825 days (5 years) indicates a long-term need for these services. 3. The Cost Plus Fixed Fee (CPFF) pricing structure can lead to cost overruns if not managed carefully. 4. The base award amount of $47.49M suggests significant initial funding, with potential for growth. 5. The contract is categorized under Engineering Services, a critical support function for defense operations. 6. The award to a large, established contractor like General Dynamics implies a focus on proven capability.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and detailed cost breakdowns. The CPFF structure inherently carries risk for cost control. Comparing it to similar engineering support contracts for the Navy would require access to proprietary pricing data and performance evaluations. However, the base award of $47.49M over five years suggests an average annual value of approximately $9.5M, which appears reasonable for specialized engineering services within a large defense organization.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this method generally fosters price discovery and allows the government to select from a wide range of qualified contractors. The competitive nature should theoretically drive down costs and improve the quality of services offered.

Taxpayer Impact: Taxpayers benefit from a process designed to ensure the government receives the best value through competitive bidding, potentially leading to more efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of the Navy, receiving essential engineering support services. Services delivered likely include technical analysis, design, development, and integration support for naval systems. The geographic impact is centered around the Navy's operational bases and facilities, primarily in California where the contractor is located. Workforce implications include employment opportunities for engineers, technicians, and support staff within General Dynamics and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize profit, requiring robust oversight.
The long duration of the contract may lead to scope creep or outdated technology if not actively managed.
Lack of specific performance metrics in the provided data makes it difficult to assess the true value for money.
Reliance on a single large contractor for critical services could pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
General Dynamics is a well-established defense contractor with a track record in providing complex technical services.
The contract supports critical Department of the Navy operations, indicating alignment with strategic defense objectives.
The fixed fee component of the CPFF contract provides some level of cost certainty for the government.

Sector Analysis

Engineering services are a vital component of the defense industrial base, encompassing a wide range of activities from research and development to system integration and lifecycle support. The market for these services is substantial, driven by the continuous need for modernization and maintenance of complex military platforms and systems. This contract fits within the broader category of professional services procured by the Department of Defense, where competition is often robust but specialized expertise can command significant value. Comparable spending benchmarks would typically be found within the DoD's overall engineering and technical services budget.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there was no specific small business set-aside (ss) for this contract. This suggests that the contract was not specifically targeted towards small businesses, and opportunities for small business subcontracting are not explicitly detailed. The award to a large prime contractor like General Dynamics may limit direct opportunities for small businesses unless they are actively sought as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). The CPFF structure necessitates close monitoring of costs and performance to ensure adherence to the contract terms and prevent overruns. Transparency is generally maintained through contract databases and reporting requirements, although detailed performance data may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Support Contracts
Professional Services Contracts
Cost Plus Fixed Fee Contracts
General Dynamics Information Technology Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Long contract duration (5 years) may pose risks related to technological obsolescence and contractor complacency.
Potential for scope creep or unmanaged growth in contract value beyond the base award.
Lack of specific performance metrics in summary data hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $86.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. NED SUPPORT SERVICES

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 $86.7 million.

What is the period of performance?

Start: 2008-03-20. End: 2013-03-19.

What is the historical spending trend for similar engineering support services within the Department of the Navy?

Analyzing historical spending trends for similar engineering support services within the Department of the Navy requires access to extensive contract databases and budget reports. Generally, the Navy procures a significant volume of engineering and technical services annually to support its vast array of platforms, including ships, aircraft, and shore-based systems. Spending in this category can fluctuate based on modernization programs, maintenance cycles, and new platform development. For instance, periods of major shipbuilding or aircraft procurement often correlate with increased demand and spending on associated engineering support. Benchmarking this $86.7 million contract against historical averages would involve examining the total obligated amounts for contracts with similar North American Industry Classification System (NAICS) codes (like 541330 for Engineering Services) awarded by the Navy over the past decade. Factors such as inflation, contract duration, and the specific technical scope would need to be considered for a meaningful comparison.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types in terms of risk and value for this type of service?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves a high degree of uncertainty, such as in research and development or complex engineering services. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure shifts some risk to the government, as the final cost is not fixed upfront. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty. It can be advantageous when innovation or adaptation is required, but it necessitates robust government oversight to control costs and prevent contractor inefficiencies from inflating the final price. For engineering services, CPFF can be appropriate if the project evolves significantly, but FFP might offer better value if the requirements are well-defined and stable, providing greater cost predictability for taxpayers.

What is General Dynamics Information Technology's track record with similar large-scale defense engineering contracts?

General Dynamics Information Technology (GDIT), a subsidiary of General Dynamics, has a substantial track record in providing a wide array of IT and engineering services to the U.S. government, particularly the Department of Defense. They have historically managed numerous large-scale contracts involving complex system integration, modernization, and sustainment for various military branches. Their experience often includes supporting naval systems, intelligence platforms, and command and control systems. GDIT's performance on similar contracts is typically evaluated through contract performance reports (CPARs), which assess factors like technical quality, cost control, schedule adherence, and management. While specific details of past performance on contracts identical in scope and value to this one are proprietary, GDIT's consistent presence as a major defense contractor suggests a generally positive history of delivering complex technical solutions, though like any large contractor, they may have faced challenges on specific projects requiring diligent oversight.

What are the potential risks associated with the 5-year duration of this contract?

A 5-year duration for a contract like this, providing engineering support services, presents several potential risks. Firstly, the technological landscape can evolve rapidly over five years. If the contract's scope is not regularly reviewed and updated, the services provided may become outdated or less effective, diminishing their value. Secondly, long-term contracts can sometimes lead to complacency on the part of the contractor, potentially reducing the incentive to innovate or operate with maximum efficiency, especially if oversight is not rigorous. Thirdly, there's a risk of 'vendor lock-in,' where the government becomes heavily reliant on a single provider, making it difficult and costly to switch contractors even if performance issues arise or better alternatives become available. Finally, economic or strategic shifts within the DoD could alter requirements, making the contracted services less relevant or necessitating costly modifications.

How does the base award amount of $47.49M compare to the total potential value of the contract?

The provided data indicates a base award amount of $47,490,000 and a total contract value (represented by 'a' for amount) of $86,668,989.19. This suggests that the base award represents approximately 54.8% of the total potential contract value. The difference of roughly $39.2 million represents potential task orders, options, or contract modifications that could be exercised over the contract's duration. This structure is common, allowing the government flexibility to increase or decrease the scope of work based on evolving needs without needing to re-compete the entire contract. The significant difference between the base and total award indicates substantial potential for growth and flexibility, but also underscores the importance of careful management and oversight to ensure that any exercised options or modifications provide genuine value and are competitively priced.

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: N0002408R3088

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sterling Parent Inc. (UEI: 968838909)

Address: 4300 FAIR LAKES CT, FAIRFAX, VA, 11

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $109,067,084

Exercised Options: $109,067,084

Current Obligation: $86,668,989

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4593

IDV Type: IDC

Timeline