DoD awards $31.7M for tactical network support, raising questions about competition and value

Contract Overview

Contract Amount: $31,711,155 ($31.7M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-06-02

End Date: 2021-06-01

Contract Duration: 364 days

Daily Burn Rate: $87.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS TASK ORDER IS ISSUED TO PROCURE POST DEPLOYMENT SOFTWARE SUPPORT (PDSS) SERVICES FOR PRODUCT MANAGER MISSION NETWORK TACTICAL NETWORK TRANSPORT ON THE MOVE (TNT OTM) PROGRAM.

Place of Performance

Location: TAUNTON, BRISTOL County, MASSACHUSETTS, 02780

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $31.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: THIS TASK ORDER IS ISSUED TO PROCURE POST DEPLOYMENT SOFTWARE SUPPORT (PDSS) SERVICES FOR PRODUCT MANAGER MISSION NETWORK TACTICAL NETWORK TRANSPORT ON THE MOVE (TNT OTM) PROGRAM. Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. High cost for software support services, necessitating benchmarking against similar contracts. 3. Lack of competition raises concerns about contractor performance incentives and market responsiveness. 4. The contract duration of one year is relatively short, suggesting potential for future re-competition or modifications. 5. The specific nature of post-deployment software support for tactical networks indicates a critical but potentially niche requirement. 6. The use of a Cost Plus Fixed Fee (CPFF) contract type requires careful monitoring of indirect costs and fee realization.

Value Assessment

Rating: questionable

The contract value of $31.7 million for one year of post-deployment software support for a tactical network program appears high. Without specific details on the scope of services, it is difficult to benchmark against comparable contracts. However, the sole-source nature of this award means there was no opportunity to test the market or secure competitive pricing, which is a significant concern for value for money. The CPFF structure also introduces risk if not managed diligently, as it allows for the recovery of costs plus a fixed fee, potentially disincentivizing cost control by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Mission Systems, Inc., was solicited. There is no indication of a competitive process, such as a Request for Proposal (RFP) that received only one response or a justification for other than full and open competition. This lack of competition limits the government's ability to explore alternative solutions or negotiate the best possible price.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a competitive bidding process, there is less assurance that the price reflects the lowest reasonable cost for the required services.

Public Impact

The primary beneficiaries are the Department of the Army and potentially other Department of Defense entities relying on the Product Manager Mission Network Tactical Network Transport On The Move (TNT OTM) program. The services delivered include post-deployment software support, ensuring the continued functionality and maintenance of critical tactical communication systems. The geographic impact is likely global, supporting deployed military operations where these tactical networks are essential. Workforce implications include the potential for highly skilled software engineers and technical support personnel employed by General Dynamics Mission Systems, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value for money.
Cost Plus Fixed Fee contract type requires robust oversight to manage costs effectively.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if contractor's indirect costs are not rigorously scrutinized.
Limited visibility into alternative solutions or market innovations due to lack of competition.

Positive Signals

Contract supports a critical tactical network program for the Department of Defense.
General Dynamics Mission Systems, Inc. is an established defense contractor with relevant experience.
The contract is for post-deployment support, indicating a focus on maintaining existing capabilities.
The fixed fee component of the CPFF contract provides some level of cost predictability for the fee portion.

Sector Analysis

The telecommunications equipment manufacturing sector (NAICS 334210) is a significant part of the defense industrial base, providing critical communication systems for military operations. Spending in this area is often characterized by long-term development cycles and specialized requirements. This contract for post-deployment software support for tactical networks fits within this specialized segment, focusing on maintaining and enhancing the operational readiness of existing communication infrastructure. Comparable spending benchmarks would typically involve other software support contracts for complex defense systems, which can vary widely based on system criticality and vendor pricing.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a specific small business set-aside component. The prime contractor, General Dynamics Mission Systems, Inc., is a large business. There is no information provided regarding subcontracting plans or goals for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though large prime contractors often utilize small businesses for various subcontracted services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, there may be enhanced scrutiny required to justify the lack of competition and ensure fair pricing. Transparency regarding the justification for other than full and open competition is crucial. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Tactical Network Programs
Command and Control Systems
Defense Communications Infrastructure
Software Maintenance and Support Services
Department of the Army IT Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
CPFF contract type requires diligent oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.7 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. THIS TASK ORDER IS ISSUED TO PROCURE POST DEPLOYMENT SOFTWARE SUPPORT (PDSS) SERVICES FOR PRODUCT MANAGER MISSION NETWORK TACTICAL NETWORK TRANSPORT ON THE MOVE (TNT OTM) PROGRAM.

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 $31.7 million.

What is the period of performance?

Start: 2020-06-02. End: 2021-06-01.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. However, the specific justification for this determination is not detailed in the provided information. Typically, sole-source awards require a formal justification and approval (J&A) process, citing reasons such as unique capabilities, urgent and compelling needs, or lack of sources. Without access to the J&A document, it is impossible to ascertain the government's rationale. This lack of transparency is a significant concern, as it prevents an independent assessment of whether competition was truly not feasible or if it was simply bypassed.

How does the cost of this contract compare to similar post-deployment software support contracts for tactical networks?

Benchmarking this $31.7 million contract against similar post-deployment software support contracts for tactical networks is challenging without more specific details on the scope of services, the complexity of the software, and the specific systems supported. However, given the sole-source nature and the Cost Plus Fixed Fee (CPFF) structure, there is an inherent risk that the pricing may not be as competitive as it could be under a fully competed contract. A thorough value-for-money assessment would require comparing key performance indicators, service level agreements, and unit costs (if applicable) with other government contracts for comparable services, ideally those awarded through a competitive process.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract for software support?

The primary risk with a CPFF contract is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their allowable costs are reimbursed, and they receive a predetermined fixed fee. While the fixed fee is intended to provide some incentive for efficiency, the contractor's focus might shift towards maximizing allowable costs to ensure a higher fee base if not managed properly. For the government, this necessitates robust oversight and auditing of all claimed costs to ensure they are reasonable, allocable, and allowable. Inadequate oversight can lead to cost overruns and reduced value for money.

What is the track record of General Dynamics Mission Systems, Inc. in providing similar software support services to the DoD?

General Dynamics Mission Systems, Inc. (GDMS) is a well-established and significant defense contractor with extensive experience in providing a wide range of technology solutions, including command, control, communications, computers, and intelligence (C4I) systems, to the Department of Defense. They have a long history of supporting complex military programs, which likely includes post-deployment software support for various platforms. While specific performance metrics for this particular contract are not available, GDMS's overall track record suggests they possess the technical capabilities and experience necessary for such services. However, the absence of competition for this specific award means that the government did not leverage its ability to select the best-value offeror from a competitive field.

What are the potential implications of this contract on the broader market for tactical network software support?

The sole-source award of this $31.7 million contract to General Dynamics Mission Systems, Inc. could have several implications for the broader market. Firstly, it signals to other potential vendors that for this specific program or requirement, competition was not pursued, which might discourage them from investing resources in developing capabilities for future opportunities related to this program. Secondly, it reinforces GDMS's position in this niche market. If there are other qualified vendors capable of providing these services, the lack of competition prevents them from demonstrating their capabilities and potentially offering more cost-effective solutions. This can stifle innovation and limit the government's access to a wider range of technological advancements.

How does the duration of this contract (364 days) influence the assessment of its value and risk?

The contract duration of 364 days (approximately one year) is relatively short for a post-deployment software support requirement, especially for complex tactical systems. This short duration might suggest that the government intends to re-evaluate the requirement or the contractor's performance in the near future, potentially leading to another competition or modification. From a risk perspective, a shorter duration can limit the government's exposure to long-term performance issues or cost escalations. However, it also means that the administrative effort and cost associated with contract award and management are incurred more frequently. It could also indicate that the scope of support needed is limited or that the program is undergoing significant changes.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Telephone Apparatus Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corporation

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: $31,711,155

Exercised Options: $31,711,155

Current Obligation: $31,711,155

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T10DC007

IDV Type: IDC

Timeline