DoD awards $39.2M for M-SHORAD contractor support, with limited competition and extended performance

Contract Overview

Contract Amount: $39,166,135 ($39.2M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2022-11-03

End Date: 2025-04-25

Contract Duration: 904 days

Daily Burn Rate: $43.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: INTERIM CONTRACTOR SUPPORT FOR M-SHORAD

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $39.2 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: INTERIM CONTRACTOR SUPPORT FOR M-SHORAD Key points: 1. Contract value represents a significant investment in ongoing military vehicle development. 2. The 'NOT COMPETED' award suggests potential limitations in market engagement. 3. Performance duration extends over two years, indicating a long-term need. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. This award falls within the broader category of military vehicle manufacturing and support. 6. The specific nature of M-SHORAD implies a focus on advanced defense capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards for similar specialized support. The Cost Plus Fixed Fee structure introduces inherent risk for cost escalation. However, the duration suggests a sustained need for these specialized services, which may justify the investment if performance is adequate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary specialized capabilities or when urgency dictates a rapid award. The lack of competition limits price discovery and potentially increases costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the most competitive pricing achievable through an open bidding process.

Public Impact

The primary beneficiaries are the Department of the Army and its M-SHORAD program, ensuring continued development and support. Services delivered include contractor support critical for the operationalization and sustainment of advanced military systems. The geographic impact is primarily within Michigan, where General Dynamics Land Systems Inc. is located. Workforce implications include the potential for specialized engineering and technical roles within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can incentivize higher spending if not rigorously overseen.
Extended performance period without clear competition raises questions about long-term value.
Lack of transparency in the justification for sole-source award.

Positive Signals

Ensures continuity of support for a critical defense program.
Leverages specialized expertise of a known contractor in military vehicle systems.
Potential for efficient program execution due to established relationship.

Sector Analysis

This contract operates within the defense industrial base, specifically focusing on advanced military vehicle manufacturing and support. The market for such specialized systems is characterized by high barriers to entry, significant R&D investment, and a limited number of qualified contractors. Spending in this sector is driven by national security priorities and technological advancements.

Small Business Impact

There is no indication of small business set-asides or subcontracting requirements in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless the prime contractor voluntarily engages them for specific support.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined in the contract terms, focusing on performance milestones and cost controls. Transparency is limited due to the sole-source nature of the award, with justifications for this approach usually documented internally.

Related Government Programs

M-SHORAD Program
Army Ground Vehicle Programs
Defense Contractor Support Services
Military Vehicle Manufacturing

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Extended performance period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.2 million to GENERAL DYNAMICS LAND SYSTEMS INC.. INTERIM CONTRACTOR SUPPORT FOR M-SHORAD

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 (Department of the Army).

What is the total obligated amount?

The obligated amount is $39.2 million.

What is the period of performance?

Start: 2022-11-03. End: 2025-04-25.

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

The provided data indicates the contract was 'NOT COMPETED' and awarded on a 'sole-source' basis. Typically, sole-source justifications are required when only one responsible source is available or when the government's need is of such a compelling urgency that it would be seriously impaired without the use of the proposed contractor. For specialized defense systems like M-SHORAD, this often relates to unique technical expertise, proprietary technology, or the need for continuity with an existing development partner. A detailed justification document, usually prepared by the requiring agency and reviewed by contracting officials, would outline the specific reasons and support the decision to forgo full and open competition.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar defense support contracts?

Cost Plus Fixed Fee (CPFF) contracts are common in defense acquisition, particularly for research, development, and complex services where the scope of work may evolve. Under CPFF, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure aims to provide flexibility and incentivize contractor performance. However, it carries a risk of cost growth if the contractor's costs exceed projections, as the government bears the majority of the cost risk. Compared to Firm-Fixed-Price (FFP) contracts, which offer greater price certainty for the government but less flexibility for scope changes, or Cost Plus Incentive Fee (CPIF) contracts, which share cost savings or overruns between the government and contractor, CPFF places a significant burden on government oversight to manage costs effectively.

What are the potential risks associated with the extended performance period of this contract?

The contract has a duration of 904 days (approximately 2.5 years), extending to April 2025. Risks associated with extended performance periods, especially for sole-source awards, include potential complacency from the contractor, reduced incentive to innovate or find efficiencies, and the risk of the government becoming locked into a particular solution or vendor without re-evaluating market alternatives. Furthermore, if the underlying technology or threat landscape evolves rapidly, an extended contract might not adequately adapt to new requirements, leading to obsolescence or suboptimal performance. Robust contract management and regular performance reviews are crucial to mitigate these risks.

What is the historical spending pattern for contractor support related to the M-SHORAD program?

The provided data only reflects a single award of $39.2 million for 'INTERIM CONTRACTOR SUPPORT FOR M-SHORAD'. Without access to historical contract databases or specific program budget documents, it is impossible to determine the overall historical spending pattern for this program. This award represents a specific funding action for a defined period. To understand historical spending, one would need to analyze all previous contracts awarded for M-SHORAD development, testing, and sustainment, including their values, durations, and the nature of the services provided.

How does the contractor, General Dynamics Land Systems Inc., typically perform on government contracts of this nature?

General Dynamics Land Systems Inc. (GDLS) is a major defense contractor with a long history of delivering complex military vehicles and support services to the U.S. Department of Defense and allied nations. Their track record generally includes the successful production and sustainment of various armored vehicles. Performance on specific contracts can vary, influenced by factors such as program complexity, funding stability, and contract type. While GDLS is a reputable entity, assessing their performance on this specific 'INTERIM CONTRACTOR SUPPORT FOR M-SHORAD' contract would require reviewing performance evaluations (e.g., CPARS reports), delivery schedules, and any documented issues or successes related to this particular award.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $39,166,135

Exercised Options: $39,166,135

Current Obligation: $39,166,135

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $12,578,815

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q20D0039

IDV Type: IDC

Timeline