DoD awards $50M for electronic units, raising concerns over limited competition and taxpayer impact

Contract Overview

Contract Amount: $50,027,473 ($50.0M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2017-12-21

End Date: 2023-09-08

Contract Duration: 2,087 days

Daily Burn Rate: $24.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ELECTRONIC UNIT; FIRING; NSNS 1220-01-563-6721 AND 1220-01-958-2650. QTY: 274. OPTION EXERCISED AT TIME OF AWARD)

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $50.0 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: ELECTRONIC UNIT; FIRING; NSNS 1220-01-563-6721 AND 1220-01-958-2650. QTY: 274. OPTION EXERCISED AT TIME OF AWARD) Key points: 1. Significant award value of $50M for electronic units. 2. Sole-source procurement raises questions about price discovery and potential overspending. 3. Lack of competition poses a risk to achieving best value for taxpayers. 4. The sector is characterized by specialized manufacturing, potentially limiting competitive options.

Value Assessment

Rating: questionable

The contract's value of $50M for 274 electronic units, with a per-unit cost of approximately $182,582, appears high. Without comparable contract data or a competitive bidding process, it's difficult to assess if this pricing is reasonable or reflects market value.

Cost Per Unit: $182,582

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may prevent the government from obtaining the most advantageous pricing through a competitive process.

Taxpayer Impact: The lack of competition suggests taxpayers may not be receiving the best possible value, potentially leading to higher costs than if multiple vendors had vied for the contract.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Limited visibility into the justification for a sole-source award. Potential for reduced innovation and quality without market pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High per-unit cost
Lack of competition
Long contract duration

Positive Signals

Definitive contract awarded
Option exercised at time of award

Sector Analysis

This contract falls under 'Other Electronic Component Manufacturing,' a sector that can involve highly specialized and proprietary technologies. Benchmarks are difficult to establish without specific component details, but significant R&D costs or unique manufacturing processes could justify higher prices.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as both 'ss' and 'sb' fields are false. There is no indication of small business participation or subcontracting opportunities within this award.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the justification is sound and that the pricing is fair and reasonable. Accountability for achieving best value is crucial given the lack of competition.

Related Government Programs

Other Electronic Component Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award lacks competition.
High per-unit cost requires validation.
Potential for taxpayer overpayment.
Limited transparency on justification.
Risk of suboptimal value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.0 million to GENERAL DYNAMICS LAND SYSTEMS INC.. ELECTRONIC UNIT; FIRING; NSNS 1220-01-563-6721 AND 1220-01-958-2650. QTY: 274. OPTION EXERCISED AT TIME OF AWARD)

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $50.0 million.

What is the period of performance?

Start: 2017-12-21. End: 2023-09-08.

What is the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award is critical. Agencies must demonstrate that only one responsible source can satisfy the agency's needs. This typically involves detailed documentation proving unique capabilities, proprietary technology, or urgent requirements. Without this justification, the award raises concerns about whether the government missed opportunities to leverage competition for better pricing and innovation.

How does the per-unit cost of $182,582 compare to similar electronic units or components in the market?

A per-unit cost of $182,582 for electronic units is substantial. Without specific technical details of the units, direct comparison is challenging. However, this figure necessitates a thorough review against industry benchmarks for comparable components, considering factors like complexity, technology, and volume. A lack of competitive bidding makes it harder to validate this cost against market alternatives.

What measures are in place to ensure the effectiveness and reliability of these electronic units, given the sole-source procurement?

With a sole-source award, robust testing, quality assurance, and performance monitoring become even more critical. The government must ensure stringent acceptance criteria and performance metrics are defined and enforced to guarantee the units meet all specifications and operational requirements. Independent verification and validation processes should be prioritized to mitigate risks associated with limited vendor accountability.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRDL116R0131

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

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: $50,027,473

Exercised Options: $50,027,473

Current Obligation: $50,027,473

Actual Outlays: $2,193,196

Subaward Activity

Number of Subawards: 136

Total Subaward Amount: $132,611,012

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline