DoD's $145M Kuwait Warehouse Operations Contract Awarded to General Dynamics Faces Scrutiny
Contract Overview
Contract Amount: $144,983,538 ($145.0M)
Contractor: General Dynamics Information Technology, Inc.
Awarding Agency: Department of Defense
Start Date: 2010-12-30
End Date: 2015-12-29
Contract Duration: 1,825 days
Daily Burn Rate: $79.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SUPPLY SUPPORT ACTIVITY WAREHOUSE OPERATIONS IN KUWAIT
Plain-Language Summary
Department of Defense obligated $145.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: SUPPLY SUPPORT ACTIVITY WAREHOUSE OPERATIONS IN KUWAIT Key points: 1. The contract value of $145M for warehouse operations in Kuwait is substantial. 2. General Dynamics Information Technology, Inc. secured this award under full and open competition. 3. Potential risks include contract type (Cost Plus Fixed Fee) and duration, which can lead to cost overruns. 4. The sector is primarily logistics and support services within the Defense industry.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee contract type, while allowing flexibility, can be less price-efficient than fixed-price contracts. Benchmarking against similar logistics support contracts is needed to assess if the $145M value is reasonable for the services provided over five years.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The award was made under full and open competition, suggesting a robust price discovery process. However, the Cost Plus Fixed Fee structure might limit the competitive pressure on cost control throughout the contract's life.
Taxpayer Impact: Taxpayer funds are being utilized for essential logistical support. The effectiveness of the competition and contract type in controlling costs will directly impact the overall taxpayer burden.
Public Impact
Ensures critical supply chain operations for military personnel in Kuwait. Supports the Department of the Army's logistical capabilities in a key operational theater. General Dynamics, a major defense contractor, is responsible for execution. The contract's duration of five years indicates a long-term need for these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can incentivize spending.
- Long contract duration (5 years) may reduce flexibility and increase risk.
- Lack of specific performance metrics or outcomes makes value assessment difficult.
Positive Signals
- Awarded under full and open competition, maximizing potential bidders.
- Supports critical operational needs in a challenging environment.
- Experienced contractor in General Dynamics.
Sector Analysis
This contract falls within the broader Defense sector, specifically focusing on logistics and warehousing. Spending benchmarks for similar outsourced warehouse operations in overseas military installations can vary significantly based on location, scope, and duration.
Small Business Impact
The data indicates that this contract was not awarded to small businesses, as General Dynamics Information Technology, Inc. is a large corporation. There is no information provided on subcontracting opportunities for small businesses within this award.
Oversight & Accountability
Oversight would typically be managed by the contracting officer's representative (COR) within the Department of the Army. Accountability for performance and cost control rests with General Dynamics, with the DoD responsible for monitoring contract compliance.
Related Government Programs
- Other Warehousing and Storage
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- Lack of specific performance metrics in provided data.
- Potential for cost overruns.
- Geographic location implies complex logistical challenges.
Tags
other-warehousing-and-storage, department-of-defense, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $145.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. SUPPLY SUPPORT ACTIVITY WAREHOUSE OPERATIONS IN KUWAIT
Who is the contractor on this award?
The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, 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 $145.0 million.
What is the period of performance?
Start: 2010-12-30. End: 2015-12-29.
What specific performance metrics are in place to ensure the efficiency and effectiveness of warehouse operations under this Cost Plus Fixed Fee contract?
The provided data does not specify performance metrics. Effective oversight would require clearly defined KPIs related to inventory accuracy, order fulfillment times, cost containment, and safety. Without these, assessing the true value and operational effectiveness is challenging, potentially leading to inefficiencies being masked by the fee structure.
How does the $145M contract value compare to industry benchmarks for similar outsourced logistics and warehousing services in comparable overseas military environments?
Benchmarking this $145M contract requires detailed analysis of scope, duration, and specific services. However, for a five-year contract supporting significant military operations, the value appears substantial. A thorough comparison with contracts for similar services in regions like the Middle East would be necessary to determine if it represents good value or potential overspending.
What mechanisms are in place to mitigate the inherent risks of cost overruns associated with a Cost Plus Fixed Fee contract over its 5-year duration?
Mitigation strategies for CPFF contracts typically include robust oversight, detailed audits, and clear limitations of cost. The Department of the Army should have established procedures for monitoring expenditures, reviewing contractor justifications for costs, and potentially implementing incentive clauses or award-fee structures to encourage cost efficiency beyond the fixed fee.
Industry Classification
NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W52P1J09R0248
Offers Received: 10
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 3150 FAIRVIEW PARK DR STE 100, FALLS CHURCH, VA, 22042
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $144,983,538
Exercised Options: $144,983,538
Current Obligation: $144,983,538
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-12-30
Current End Date: 2015-12-29
Potential End Date: 2015-12-29 12:12:00
Last Modified: 2020-09-24
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