DoD awards $28.3M contract for optical instruments, with General Dynamics Land Systems Inc. as the prime contractor

Contract Overview

Contract Amount: $28,299,936 ($28.3M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2018-08-30

End Date: 2022-08-01

Contract Duration: 1,432 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SIGHT UNIT, NSN: 1240-01-532-3942, 69 EACH WITH 100% OPTION EXERCISED AT THE TIME OF AWARD

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $28.3 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: SIGHT UNIT, NSN: 1240-01-532-3942, 69 EACH WITH 100% OPTION EXERCISED AT THE TIME OF AWARD Key points: 1. The contract value of $28.3 million represents a significant investment in specialized optical equipment. 2. Competition dynamics for this contract are assessed to understand pricing efficiency and potential for cost savings. 3. Risk indicators are being monitored to ensure timely delivery and adherence to quality specifications. 4. Performance context is established by comparing this award to similar procurements for optical instruments. 5. The sector positioning highlights the importance of advanced optics within the defense supply chain. 6. The firm-fixed-price contract type suggests a clear understanding of project scope and cost expectations.

Value Assessment

Rating: good

The total contract value of $28.3 million for 69 units of a specialized optical instrument appears reasonable when benchmarked against similar defense procurements. While specific per-unit cost data is not provided, the firm-fixed-price structure suggests that the contractor has assumed the cost risk. Further analysis would involve comparing the unit price to industry benchmarks for comparable high-precision optical systems, considering the advanced technology and specific military applications involved. The 100% option exercise at award indicates a strong initial demand and confidence in the proposed pricing.

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 full and open competition generally fosters a competitive environment that can lead to better pricing and innovation. The presence of multiple bidders, if applicable, would suggest that the government received a range of proposals, allowing for selection of the best value. This approach is designed to ensure fair market prices and prevent undue cost inflation.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding and encourages a wider pool of suppliers, potentially leading to lower overall contract costs.

Public Impact

The primary beneficiaries of this contract are the U.S. Army personnel who will utilize the advanced optical instruments in their operations. The contract delivers critical optical equipment essential for surveillance, targeting, or reconnaissance missions. The geographic impact is national, supporting defense readiness across various operational theaters. Workforce implications include support for manufacturing and technical roles within the defense industrial base, particularly in Michigan where General Dynamics Land Systems Inc. is headquartered.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise, despite the firm-fixed-price structure.
Dependency on a single prime contractor for delivery of critical components.
Risk of obsolescence if technology rapidly advances beyond the capabilities of the awarded instruments.

Positive Signals

Award to a large, established defense contractor with a proven track record in complex systems.
Firm-fixed-price contract type mitigates cost uncertainty for the government.
Full and open competition suggests a robust bidding process and potential for competitive pricing.
100% option exercised at award indicates strong initial requirement and confidence in the solution.

Sector Analysis

The defense sector relies heavily on advanced optical instruments for a wide range of applications, including intelligence, surveillance, reconnaissance (ISR), targeting, and navigation. The market for these specialized systems is characterized by high barriers to entry due to technological complexity, stringent quality requirements, and significant R&D investment. Spending in this sub-sector is driven by evolving military needs and technological advancements. Comparable spending benchmarks would involve analyzing other contracts for similar electro-optical systems, night vision devices, or advanced targeting pods awarded by various defense agencies.

Small Business Impact

This contract was awarded to General Dynamics Land Systems Inc., a large defense contractor, and there is no indication of a small business set-aside. Therefore, the direct impact on small businesses through this specific award is likely minimal. However, General Dynamics may engage small businesses as subcontractors for specialized components or services, contributing indirectly to the small business ecosystem. The absence of a set-aside suggests the requirement was deemed best fulfilled by a large prime contractor, potentially due to scale, complexity, or existing capabilities.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial accountability. The firm-fixed-price nature of the award places cost control responsibility primarily on the contractor. Transparency is facilitated through contract award databases and reporting requirements. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Tactical Vehicle Systems
Advanced Sensor Technology
Military Optics Procurement
Defense Electro-Optical Systems

Risk Flags

Potential for obsolescence
Supply chain dependencies
Technical performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.3 million to GENERAL DYNAMICS LAND SYSTEMS INC.. SIGHT UNIT, NSN: 1240-01-532-3942, 69 EACH WITH 100% OPTION EXERCISED AT THE 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 $28.3 million.

What is the period of performance?

Start: 2018-08-30. End: 2022-08-01.

What is the specific type and intended use of the optical instrument being procured?

The data provided indicates the procurement of an optical instrument with NSN 1240-01-532-3942. While the specific model or detailed technical specifications are not available in the provided snippet, the NSN suggests it falls under the category of optical instruments and lenses. Given the awarding agency (Department of Defense) and the prime contractor (General Dynamics Land Systems Inc.), it is highly probable that these instruments are intended for military applications. These could include advanced targeting systems, surveillance equipment, night vision devices, or components for complex weapon platforms. The 'Optical Instrument and Lens Manufacturing' NAICS code further confirms the nature of the product. The context of defense procurement implies a need for ruggedized, high-performance optics capable of operating in demanding environmental conditions.

How does the unit cost of this contract compare to similar optical instrument procurements by the DoD?

Without specific unit cost data or detailed technical specifications for the 69 units procured, a direct comparison of unit cost is challenging. The total award of $28.3 million for 69 units yields an approximate unit cost of $410,143 ($28,299,936 / 69). This figure needs to be contextualized by the complexity, technological sophistication, and intended application of the optical instrument. For instance, advanced targeting pods or sophisticated surveillance systems can easily cost hundreds of thousands of dollars per unit. To perform a robust comparison, one would need to identify contracts for similar NSNs or instruments with comparable technical capabilities (e.g., resolution, magnification, spectral range, environmental hardening) awarded around the same period. Benchmarking against off-the-shelf commercial equivalents is also often not feasible due to the specialized military requirements and certifications involved.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential technical performance issues, schedule delays, and cost overruns, although the firm-fixed-price (FFP) contract type aims to mitigate the latter. Technical risks might arise from the complexity of the optical systems, requiring specialized manufacturing processes and quality control. Schedule risks could stem from supply chain disruptions for critical components or unforeseen production challenges. Mitigation strategies typically involve robust quality assurance processes, detailed project management by the contractor, and close oversight by the Defense Contract Management Agency (DCMA). The FFP structure incentivizes the contractor to manage costs effectively. Exercising the full option at award suggests a high degree of confidence in the contractor's ability to meet requirements, potentially reducing schedule and technical risks.

What is General Dynamics Land Systems Inc.'s track record with similar DoD optical instrument contracts?

General Dynamics Land Systems Inc. (GDLS) is a major defense contractor primarily known for its ground combat vehicles and related systems. While their core expertise lies in vehicle platforms, they often integrate complex subsystems, which can include advanced optics and sensor packages. Their track record with optical instrument contracts specifically might be less prominent than their vehicle programs, but it's probable they have experience in procuring, integrating, or manufacturing optical components as part of larger systems. A detailed review of their contract history would reveal the extent of their direct involvement in standalone optical instrument procurements versus their role as a prime integrator. GDLS's established position within the defense industrial base suggests a capacity to manage complex procurements and ensure delivery.

How has historical spending on optical instruments by the Defense Logistics Agency (DLA) trended?

Historical spending on optical instruments by the Defense Logistics Agency (DLA) is influenced by the evolving needs of the military services for surveillance, targeting, and situational awareness. DLA, as a major logistics provider, procures a wide array of equipment, including optical devices, to support global military operations. Trends in spending are often driven by technological advancements, modernization programs, and operational tempo. For example, increased demand for night vision capabilities or advanced targeting systems would likely lead to higher spending in these categories. Analyzing DLA's historical contract awards for optical instruments, particularly those with similar NSNs or PSC codes, would reveal patterns in volume, value, and types of instruments procured over time, indicating shifts in military requirements and technological priorities.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SPRDL117R0254

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: $28,299,936

Exercised Options: $28,299,936

Current Obligation: $28,299,936

Subaward Activity

Number of Subawards: 134

Total Subaward Amount: $90,455,131

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline