DoD Acquires General Dynamics IP for Scranton Plant for $45M, Lacking Competition

Contract Overview

Contract Amount: $45,000,000 ($45.0M)

Contractor: General Dynamics Ordnance and Tactical Systems Inc

Awarding Agency: Department of Defense

Start Date: 2013-06-07

End Date: 2014-06-17

Contract Duration: 375 days

Daily Burn Rate: $120.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PURCHASE OF EQUIPMENT AND INTELLECTUAL PROPERTY OWNED BY GENERAL DYNAMICS - ORDNANCE AND TACTICAL SYSTEMS FOR USE AT THE SCRANTON ARMY AMMUNITION PLANT

Place of Performance

Location: SCRANTON, LACKAWANNA County, PENNSYLVANIA, 18505

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $45.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC for work described as: PURCHASE OF EQUIPMENT AND INTELLECTUAL PROPERTY OWNED BY GENERAL DYNAMICS - ORDNANCE AND TACTICAL SYSTEMS FOR USE AT THE SCRANTON ARMY AMMUNITION PLANT Key points: 1. The Department of the Army is purchasing critical equipment and intellectual property from General Dynamics for $45 million. 2. This acquisition is a sole-source procurement, meaning no competitive bidding process was conducted. 3. The lack of competition raises concerns about potential overpayment and the absence of market-driven pricing. 4. The Facilities Support Services sector is characterized by long-term contracts and specialized needs, but competition is generally encouraged.

Value Assessment

Rating: questionable

The contract value of $45 million for equipment and intellectual property is significant. Without competitive bids, it's difficult to assess if this price represents fair market value compared to similar acquisitions or if it's inflated due to the sole-source nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to General Dynamics Ordnance and Tactical Systems Inc. This limits price discovery and potentially leads to higher costs for taxpayers as there was no opportunity for other vendors to offer competitive pricing.

Taxpayer Impact: The absence of competition in this $45 million procurement means taxpayers may not have received the best possible price, potentially leading to inefficient use of funds.

Public Impact

Taxpayers may be overpaying for equipment and intellectual property due to the lack of competitive bidding. The Scranton Army Ammunition Plant's operational capabilities could be impacted if the acquired IP is not effectively integrated. Future procurements in this area might be influenced by this sole-source decision, potentially limiting future competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Positive Signals

Acquisition of critical IP
Supports essential military facility operations

Sector Analysis

The Facilities Support Services sector often involves complex operations and specialized equipment. While this procurement supports a key facility, the $45 million price tag for IP and equipment warrants scrutiny, especially given the lack of competitive benchmarking.

Small Business Impact

This contract was awarded directly to a large business, General Dynamics Ordnance and Tactical Systems Inc. There is no indication that small businesses were involved in this specific procurement, either as prime contractors or subcontractors.

Oversight & Accountability

The sole-source nature of this award suggests a potential gap in oversight regarding competitive sourcing strategies. Further review is needed to understand why competition was deemed unnecessary or impossible for this acquisition.

Related Government Programs

Facilities Support Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award lacks competitive pricing.
Potential for inflated costs due to no bidding.
Limited transparency in the procurement process.
No clear small business participation.
Questionable value for money without competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC. PURCHASE OF EQUIPMENT AND INTELLECTUAL PROPERTY OWNED BY GENERAL DYNAMICS - ORDNANCE AND TACTICAL SYSTEMS FOR USE AT THE SCRANTON ARMY AMMUNITION PLANT

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 $45.0 million.

What is the period of performance?

Start: 2013-06-07. End: 2014-06-17.

What specific justification was provided for not competing this $45 million acquisition of equipment and intellectual property?

The provided data indicates the contract was 'NOT COMPETED'. A detailed justification, likely citing unique capabilities, proprietary technology, or urgent need, would typically be required for such sole-source awards. Without this documentation, it's impossible to fully assess the necessity of foregoing competition and its impact on value for money.

How does the $45 million price compare to industry benchmarks for similar equipment and intellectual property in the defense sector?

Benchmarking this $45 million acquisition is challenging without specific details on the nature of the equipment and intellectual property. However, given the sole-source award, there's a heightened risk that the price may exceed fair market value. Independent cost analysis or comparison with publicly available data on similar defense technology transfers would be necessary for a robust assessment.

What is the long-term strategic value of acquiring this specific intellectual property from General Dynamics for the Scranton Army Ammunition Plant?

The long-term strategic value hinges on how this intellectual property enhances the plant's capabilities, efficiency, or the production of munitions. If it enables critical, unique functions or significantly improves output, the investment could be justified. However, the lack of competition means the government must rely on General Dynamics' assessment of this value without external validation.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 156 CEDAR AVE, SCRANTON, PA, 08

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: $45,000,000

Exercised Options: $45,000,000

Current Obligation: $45,000,000

Contract Characteristics

Cost or Pricing Data: NO

Timeline