DoD awards $29.5M for 273 Distribution Boxes to General Dynamics, with 100% option
Contract Overview
Contract Amount: $29,458,458 ($29.5M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2016-08-24
End Date: 2020-02-12
Contract Duration: 1,267 days
Daily Burn Rate: $23.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AWARDED AUGUST 24, 2016 TO GENERAL DYNAMICS LAND SYSTEMS FOR 273 EA DISTRIBUTION BOX (NSN: 6110-01-565-1117) WITH 100% OPTION.
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $29.5 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: AWARDED AUGUST 24, 2016 TO GENERAL DYNAMICS LAND SYSTEMS FOR 273 EA DISTRIBUTION BOX (NSN: 6110-01-565-1117) WITH 100% OPTION. Key points: 1. High value award for specialized electronic components. 2. Sole-source award to a large defense contractor. 3. Potential for significant cost increase with option exercise. 4. Sector: Defense manufacturing of electronic assemblies.
Value Assessment
Rating: fair
The award price of $29.5M for 273 units suggests a per-unit cost of approximately $108,000. This is a high cost for electronic assemblies, warranting scrutiny.
Cost Per Unit: $108,000 (estimated)
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. Without competition, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher costs for the government.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these distribution boxes.
Public Impact
Defense readiness may be impacted by the availability of these critical distribution boxes. Taxpayers bear the cost of a sole-source contract for essential defense components. The large value of the award highlights significant government spending in defense electronics.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- High per-unit cost requires justification.
- 100% option could significantly increase total contract value.
- Lack of small business participation noted.
Positive Signals
- Award to established defense contractor ensures experience.
- Firm Fixed Price contract provides cost certainty for base award.
Sector Analysis
This award falls within the Printed Circuit Assembly (Electronic Assembly) Manufacturing sector, a critical component of defense systems. Spending benchmarks for similar specialized electronic assemblies can vary widely based on complexity and volume.
Small Business Impact
The data indicates no small business participation in this contract. This is common for large, sole-source awards to major defense contractors, but it represents a missed opportunity for small business growth.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight is crucial for sole-source awards to ensure fair pricing and contract compliance.
Related Government Programs
- Printed Circuit Assembly (Electronic Assembly) Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- High per-unit cost
- 100% option increases total value
- No small business participation
- Lack of price competition
Tags
printed-circuit-assembly-electronic-asse, department-of-defense, mi, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.5 million to GENERAL DYNAMICS LAND SYSTEMS INC.. AWARDED AUGUST 24, 2016 TO GENERAL DYNAMICS LAND SYSTEMS FOR 273 EA DISTRIBUTION BOX (NSN: 6110-01-565-1117) WITH 100% OPTION.
Who is the contractor on this award?
The obligated recipient is GENERAL DYNAMICS LAND SYSTEMS INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $29.5 million.
What is the period of performance?
Start: 2016-08-24. End: 2020-02-12.
What is the justification for the sole-source award and the high per-unit cost for these distribution boxes?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The high per-unit cost would need to be substantiated by detailed cost breakdowns, market research on comparable items, and potentially independent government cost estimates to ensure it represents fair and reasonable pricing.
What is the risk associated with exercising the 100% option, and how will its pricing be determined?
The primary risk of exercising the 100% option is a significant increase in the total contract value, potentially doubling the initial $29.5M expenditure. The pricing for the option should ideally be negotiated upfront or based on pre-defined, fair-market-value mechanisms to prevent price gouging. Without competitive bidding for the option, the government is reliant on the contractor's pricing.
How does the government ensure the effectiveness and reliability of these distribution boxes, given the sole-source nature of the award?
Effectiveness and reliability are ensured through stringent quality assurance and acceptance testing protocols mandated by the contract. The Defense Contract Management Agency (DCMA) plays a key role in monitoring production, inspecting deliverables, and verifying that the distribution boxes meet all technical specifications and performance requirements before acceptance, regardless of the award method.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Printed Circuit Assembly (Electronic Assembly) Manufacturing
Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: SPRDL115R0006
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 48310
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: $29,458,458
Exercised Options: $29,458,458
Current Obligation: $29,458,458
Subaward Activity
Number of Subawards: 126
Total Subaward Amount: $47,522,153
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-08-24
Current End Date: 2020-02-12
Potential End Date: 2020-02-12 00:00:00
Last Modified: 2020-08-21
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