DoD's $76M contract for configuration items awarded to General Dynamics Mission Systems without competition

Contract Overview

Contract Amount: $76,168,980 ($76.2M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-08-31

End Date: 2021-02-21

Contract Duration: 905 days

Daily Burn Rate: $84.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS ORDER IS FOR LOT 9 CONFIGURATION ITEMS (CIS) SUBJECTED TO PROGRESS PAYMENT.

Place of Performance

Location: TAUNTON, BRISTOL County, MASSACHUSETTS, 02780

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $76.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: THIS ORDER IS FOR LOT 9 CONFIGURATION ITEMS (CIS) SUBJECTED TO PROGRESS PAYMENT. Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined costs for the government. 2. The contract duration of 905 days suggests a significant, multi-year commitment. 3. Awarded as a delivery order under a larger contract vehicle. 4. The North American Industry Classification System (NAICS) code 334210 points to the telephone apparatus manufacturing sector. 5. Progress payments are utilized, which can benefit the contractor by providing cash flow. 6. The contract was not competed, raising questions about potential price efficiencies.

Value Assessment

Rating: questionable

Benchmarking the value of this specific delivery order is challenging without knowing the terms of the parent contract or comparable pricing for configuration items. The firm-fixed-price structure provides cost certainty, but the lack of competition means the government may not have achieved the lowest possible price. The total award amount of $76.17 million over approximately 2.5 years suggests a substantial investment in these configuration items.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a delivery order under a non-competed basis, indicating that the procurement strategy did not involve soliciting offers from multiple vendors. The absence of a competitive bidding process limits the government's ability to leverage market forces to secure the best possible pricing and terms. It suggests that either the specific configuration items were unique to General Dynamics Mission Systems or that the parent contract vehicle itself was not subject to open competition for this particular order.

Taxpayer Impact: The lack of competition means taxpayers may have paid a higher price than if multiple vendors had vied for the contract, potentially missing out on cost savings.

Public Impact

The Department of the Army benefits from the acquisition of essential configuration items for its operations. These items are critical for supporting military communication and operational readiness. The contract supports the defense industrial base, specifically within the telecommunications equipment manufacturing sector. Workforce implications are likely within General Dynamics Mission Systems, supporting manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Absence of competitive bidding limits transparency in pricing.
Reliance on a single source could create future dependency and reduce negotiation leverage.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Delivery order structure suggests it aligns with an existing, potentially pre-negotiated, framework.
Progress payments can ensure contractor viability and timely delivery.

Sector Analysis

The contract falls within the broader Information Technology and Defense sectors, specifically related to telecommunications equipment manufacturing (NAICS 334210). This industry is characterized by complex supply chains and significant research and development investments. Spending in this area is often driven by modernization efforts and the need for secure, reliable communication systems within the Department of Defense. Comparable spending benchmarks would typically involve analyzing other contracts for similar communication hardware and systems procured by defense agencies.

Small Business Impact

The data indicates this contract was not competed and does not specify any small business set-aside provisions or subcontracting goals. Therefore, the direct impact on small businesses is likely minimal unless General Dynamics Mission Systems voluntarily includes them in its supply chain. Without explicit set-asides, opportunities for small businesses to directly participate in this specific award are limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and auditing functions. The use of progress payments suggests financial oversight to ensure proper expenditure. Transparency is limited due to the non-competed nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Telecommunications Procurement
Army Communication Systems Contracts
General Dynamics Mission Systems Contracts
Configuration Item Procurement
Firm Fixed Price Contracts

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. THIS ORDER IS FOR LOT 9 CONFIGURATION ITEMS (CIS) SUBJECTED TO PROGRESS PAYMENT.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS MISSION SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $76.2 million.

What is the period of performance?

Start: 2018-08-31. End: 2021-02-21.

What is the specific nature of the 'configuration items' (CIS) being procured under this contract?

The 'configuration items' (CIS) procured under this contract are not explicitly defined in the provided data. However, given the NAICS code 334210 (Telephone Apparatus Manufacturing) and the contractor's specialization, these items likely refer to components, modules, or subsystems related to telecommunications equipment. This could include hardware for base stations, network infrastructure, user terminals, or specialized communication devices essential for military operations. The term 'configuration items' suggests they are specific parts that make up a larger system, and their precise nature would be detailed in the contract's Statement of Work (SOW) and technical specifications.

Why was this contract awarded on a sole-source (not competed) basis?

The provided data states the contract was 'NOT COMPETED,' indicating a sole-source award. The specific justification for this is not detailed. Common reasons for sole-source awards include proprietary technology, unique capabilities held by only one vendor, urgent and compelling needs where competition is not feasible, or if the item is a follow-on to a previously competed contract where only the original awardee can provide the necessary integration or support. Without further information from the contracting agency, the exact rationale remains unknown, but it implies a perceived lack of viable alternatives or specific circumstances justifying bypassing competition.

How does the firm-fixed-price (FFP) contract type impact the government's risk and potential cost savings?

A Firm-Fixed-Price (FFP) contract shifts most of the cost risk from the government to the contractor. The contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This provides the government with significant cost certainty and predictability, making budgeting easier. For potential cost savings, FFP contracts are generally preferred when the scope of work is well-defined, as they incentivize the contractor to be efficient to maximize their profit. However, in a sole-source FFP contract, the government lacks the competitive pressure that typically drives prices down, meaning the 'fixed price' might be higher than it would be in a competitive scenario.

What is the significance of progress payments in this contract?

Progress payments are a form of financing provided by the government to the contractor during the performance of the contract, typically based on a percentage of the costs incurred. For this $76.17 million contract, progress payments would allow General Dynamics Mission Systems to receive funds before the final delivery, helping to manage cash flow and finance ongoing production or development activities. While beneficial for contractor liquidity, progress payments can increase the government's financial exposure during the contract period. The contract specifies progress payments, indicating a need to support the contractor's financial operations throughout the performance period.

What is the typical market for telephone apparatus manufacturing (NAICS 334210) and how does this contract fit?

The NAICS code 334210, Telephone Apparatus Manufacturing, covers establishments primarily engaged in manufacturing wired and wireless telephones, telephone answering machines, and other telephone and telegraph equipment. This market serves both commercial and government sectors, including telecommunications providers, businesses, and defense agencies. This specific contract with the Department of Defense suggests a specialized application of telephone apparatus, likely for secure, ruggedized, or mission-specific communication systems rather than standard commercial products. It fits within the defense sector's need for reliable and advanced communication hardware to support military operations.

What is the historical spending trend for similar configuration items or contracts with General Dynamics Mission Systems by the Department of the Army?

Analyzing historical spending trends for similar configuration items or contracts with General Dynamics Mission Systems by the Department of the Army requires access to comprehensive federal procurement databases. Without direct access to such data, a precise historical comparison is not possible. However, General Dynamics Mission Systems is a major defense contractor, and the Department of the Army frequently procures communication systems, electronic equipment, and related components from them. Past awards would likely show a pattern of significant contract values, reflecting the company's established role in supplying defense technology. Understanding the volume and value of previous, similar sole-source awards would be crucial for assessing whether this $76.17 million contract represents a typical or anomalous level of spending.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Telephone Apparatus Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 400 JOHN QUINCY ADAMS RD, TAUNTON, MA, 02780

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: $76,168,980

Exercised Options: $76,168,980

Current Obligation: $76,168,980

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T10DC007

IDV Type: IDC

Timeline