DoD's $104M contract for guided missile manufacturing awarded to General Dynamics without competition

Contract Overview

Contract Amount: $104,301,042 ($104.3M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-09-24

End Date: 2019-03-31

Contract Duration: 2,014 days

Daily Burn Rate: $51.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UCA

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $104.3 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: UCA Key points: 1. The contract value of over $104 million represents a significant investment in guided missile and space vehicle manufacturing. 2. Awarded to a single, established defense contractor, this suggests a focus on specialized capabilities rather than broad market engagement. 3. The lack of competition raises questions about potential price efficiencies and the exploration of alternative solutions. 4. Performance context is tied to the Department of the Army's needs within the defense sector. 5. This contract falls within the Guided Missile and Space Vehicle Manufacturing industry, a critical component of national defense. 6. The firm-fixed-price structure aims to provide cost certainty for the government.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable data for similar sole-source awards in guided missile manufacturing. The firm-fixed-price structure provides some cost certainty, but without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money. The total award amount of over $104 million is substantial, indicating a significant procurement for specialized defense equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The absence of competition limits the government's ability to leverage market forces to drive down prices or explore a wider range of innovative solutions.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers compared to competitively bid contracts, as the government does not benefit from the price reductions that often result from multiple bidders vying for the contract.

Public Impact

The primary beneficiaries are the Department of the Army and potentially other branches of the Department of Defense requiring guided missile and space vehicle components. The services delivered include the manufacturing of guided missiles and related space vehicle components, crucial for national defense operations. The geographic impact is primarily centered around the contractor's facilities in Florida, where the work is performed. Workforce implications include employment opportunities within the specialized manufacturing sector at General Dynamics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can limit innovation by not exploring alternative solutions from other companies.
Dependence on a single supplier could create supply chain risks if the contractor faces production issues.

Positive Signals

Award to an established contractor suggests a focus on proven capabilities and reliability.
Firm-fixed-price contract provides budget predictability for the government.
Specialized nature of the product likely requires unique manufacturing expertise.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector (NAICS 336414) is a highly specialized and critical segment of the aerospace and defense industry. It involves complex engineering, advanced materials, and stringent quality control. Spending in this sector is heavily influenced by national security priorities and defense budgets. Comparable spending benchmarks are difficult to establish due to the proprietary nature of many defense contracts and the specialized capabilities required, but this $104 million award represents a significant, albeit singular, investment within this niche.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large, established defense contractor like General Dynamics suggests that the primary focus was on specialized manufacturing capabilities rather than promoting small business participation. This could mean limited direct opportunities for small businesses on this specific contract, though they may be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver the specified goods within the agreed price. Transparency is limited due to the sole-source nature of the award, but contract modifications and performance reports would be subject to internal DoD oversight and potentially Inspector General reviews if performance issues arise.

Related Government Programs

Missile Manufacturing Contracts
Defense Procurement
Aerospace Manufacturing
Space Vehicle Production
Tactical Weapon Systems

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $104.3 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. UCA

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND TACTICAL 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 $104.3 million.

What is the period of performance?

Start: 2013-09-24. End: 2019-03-31.

What is the track record of General Dynamics Ordnance and Tactical Systems, Inc. in fulfilling similar defense manufacturing contracts?

General Dynamics Ordnance and Tactical Systems, Inc. (GD-OTS) has a long-standing history as a major defense contractor specializing in munitions, missile components, and tactical systems. They are known for their expertise in areas such as warhead manufacturing, rocket motor production, and assembly of various ordnance items. Their track record includes numerous contracts with the Department of Defense and allied nations, often involving complex manufacturing processes and stringent quality requirements. While specific performance metrics for individual contracts are not always publicly disclosed, GD-OTS is generally considered a reliable supplier within the defense industrial base, possessing the necessary infrastructure and technical capabilities to produce sophisticated defense hardware.

How does the $104 million contract value compare to typical spending on guided missile manufacturing by the Department of the Army?

The $104 million contract value for guided missile and space vehicle manufacturing is a substantial figure, reflecting the high cost and complexity associated with producing such advanced defense systems. While specific annual spending figures for the Army's guided missile procurement can fluctuate based on strategic needs and budget allocations, this single contract represents a significant investment. For context, major missile programs can involve multi-year contracts worth hundreds of millions or even billions of dollars. Therefore, $104 million, while large, is likely within the expected range for acquiring specialized missile components or systems, especially when awarded on a sole-source basis for specific, potentially unique, requirements.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with a sole-source award of this magnitude include potential overpayment due to the lack of competitive pricing, reduced incentive for the contractor to innovate or improve efficiency beyond contractual minimums, and a heightened risk of supply chain disruption if the sole provider encounters production issues. Taxpayers may not receive the best possible value for their investment. Furthermore, sole-source awards can stifle competition in the long run by creating barriers to entry for potential new suppliers who might offer more cost-effective or technologically advanced solutions. Dependence on a single entity also concentrates risk, making the program vulnerable to that contractor's financial stability or strategic decisions.

What is the strategic importance of this contract for the Department of the Army's capabilities?

This contract is strategically important as it ensures the continued supply of critical guided missile and space vehicle components essential for the Department of the Army's operational readiness and future force projection. Guided missiles are key enablers for various combat missions, including air defense, ground attack, and strategic deterrence. By awarding this contract, the Army secures access to specialized manufacturing capabilities necessary to maintain and modernize its arsenal. The specific nature of the components or systems procured under this contract would dictate its precise strategic impact, but it undoubtedly contributes to maintaining a technological edge and fulfilling national defense objectives.

How has federal spending in the Guided Missile and Space Vehicle Manufacturing sector (NAICS 336414) trended over the past five years?

Federal spending in the Guided Missile and Space Vehicle Manufacturing sector (NAICS 336414) has generally remained robust, driven by ongoing modernization efforts and national security priorities within the Department of Defense. While specific year-over-year figures can vary based on major program awards and budget cycles, the sector consistently represents a significant portion of defense procurement. Data from sources like the U.S. Census Bureau and Deltek indicate sustained, high levels of government contracting activity in this area. Factors such as geopolitical tensions, the development of new missile technologies, and the need to replenish inventories often contribute to consistent or increasing spending trends in this critical defense manufacturing segment.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q13R0092

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 11399 16TH CT N STE 200, SAINT PETERSBURG, FL, 33716

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: $104,301,042

Exercised Options: $104,301,042

Current Obligation: $104,301,042

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline