DoD's $15.7M R&D contract for armor awarded to General Dynamics, lacking competition

Contract Overview

Contract Amount: $15,728,383 ($15.7M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2007-09-28

End Date: 2011-12-31

Contract Duration: 1,555 days

Daily Burn Rate: $10.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: RESEARCH & DEVELOPMENT - ARMOR

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $15.7 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: RESEARCH & DEVELOPMENT - ARMOR Key points: 1. Contract awarded on a non-competitive basis, raising questions about price discovery and potential value. 2. Significant investment in research and development for advanced armor systems. 3. Long contract duration of over 4 years suggests a substantial project scope. 4. Awarded to a large, established defense contractor, indicating a focus on specialized capabilities. 5. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not closely managed. 6. Geographic concentration in Michigan for contract performance.

Value Assessment

Rating: questionable

Benchmarking the value of this specific R&D contract is challenging due to its specialized nature and lack of competitive bids. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, carries inherent risks of cost escalation. Without comparable sole-source R&D contracts for similar armor technologies, it's difficult to definitively assess if the final cost represented fair market value. The absence of competition means there was no market pressure to drive down prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the unique capabilities or technology required for the project. The lack of competition limits the government's ability to leverage market forces to secure the best possible price and terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, the government had less leverage to negotiate favorable pricing, potentially leading to higher overall expenditure for this research and development effort.

Public Impact

The primary beneficiary is the Department of Defense, which will receive advanced armor research and development. The services delivered include specialized research and development aimed at improving vehicle survivability. The contract performance is primarily located in Michigan, potentially impacting the local workforce and economy. This contract supports the development of next-generation military hardware, enhancing soldier protection.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not rigorously monitored.
Long contract duration increases the risk of scope creep and budget adjustments.
Lack of transparency in the sole-source justification process.

Positive Signals

Award to a prime contractor with established expertise in armor systems.
Focus on critical R&D for defense applications enhances national security.
Contract performance in Michigan may support regional defense industry jobs.

Sector Analysis

This contract falls within the Defense Research and Development sector, specifically focusing on materials and systems for vehicle protection. The broader market for defense R&D is characterized by significant government investment, long development cycles, and a reliance on specialized contractors. Comparable spending benchmarks are difficult to establish for sole-source R&D due to proprietary technologies and unique requirements, but the overall defense R&D budget runs into billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, General Dynamics Land Systems Inc., is a large corporation. There is no explicit information provided regarding subcontracting plans to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless the prime contractor voluntarily engages small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices, potentially with support from the Defense Contract Management Agency (DCMA). Accountability measures would be tied to the Cost Plus Fixed Fee contract terms, requiring detailed reporting on costs and progress. Transparency is limited due to the sole-source nature of the award, with justifications for non-competition usually being internal or classified. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development
Vehicle Armor Systems
Military Vehicle Modernization
Advanced Materials Research

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.7 million to GENERAL DYNAMICS LAND SYSTEMS INC.. RESEARCH & DEVELOPMENT - ARMOR

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $15.7 million.

What is the period of performance?

Start: 2007-09-28. End: 2011-12-31.

What is the track record of General Dynamics Land Systems Inc. in fulfilling similar R&D contracts for the Department of Defense?

General Dynamics Land Systems Inc. (GDLS) has a long and extensive history of contracting with the Department of Defense, particularly in the area of ground combat vehicles and associated technologies. They are a major prime contractor for numerous vehicle programs, including the Abrams Main Battle Tank and the Stryker family of vehicles. Their experience encompasses not only production but also significant research and development efforts related to survivability, mobility, and lethality. While specific R&D contract performance data is often proprietary or aggregated, GDLS's consistent role as a prime contractor on major defense programs suggests a generally strong track record in delivering complex technological solutions. However, like any large contractor, they may have faced challenges or criticisms on specific projects regarding cost, schedule, or performance, which would require a deeper dive into individual contract histories.

How does the $15.7 million value of this contract compare to other DoD R&D contracts for armor?

The $15.7 million value for this specific R&D contract for armor is moderate within the context of overall Department of Defense research and development spending. DoD R&D budgets are in the tens of billions of dollars annually, funding a wide array of projects from basic research to advanced prototyping. Contracts for major system development, such as new vehicle platforms or advanced weapon systems, can easily reach hundreds of millions or even billions of dollars. Conversely, smaller, more focused R&D efforts, like specific material enhancements or component testing, might fall into the multi-million dollar range. Therefore, $15.7 million represents a significant but not exceptionally large investment for a targeted R&D initiative in armor technology, especially considering it was a sole-source award over a multi-year period.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, particularly for research and development, revolve around cost control and potential for overruns. In a CPFF contract, the contractor is reimbursed for allowable costs incurred, plus a predetermined fixed fee representing profit. The risk to the contractor is that their actual costs might exceed the estimated costs, reducing their effective profit margin. Conversely, the risk to the government (and thus taxpayers) is that the contractor may have less incentive to control costs rigorously, as they are guaranteed to be reimbursed for allowable expenses and receive their fixed fee regardless. This can lead to scope creep, inefficient resource allocation, and ultimately, higher final costs than initially projected. Effective oversight, clear definition of scope, and robust cost tracking are crucial to mitigate these risks.

What does the 'NOT COMPETED' status imply for the effectiveness of taxpayer spending on this contract?

The 'NOT COMPETED' status, indicating a sole-source award, implies a potential reduction in the effectiveness of taxpayer spending. When a contract is not competed, the government foregoes the benefits of competitive bidding, which typically drives down prices, encourages innovation, and ensures the best value is obtained. In a sole-source scenario, the government negotiates directly with a single contractor. While this may be justified if only one entity possesses the necessary unique capabilities, it removes the market pressure that would otherwise compel the contractor to offer the most competitive pricing. Consequently, there is a higher risk that the price paid may be above what could have been achieved through competition, thereby diminishing the overall value for taxpayer dollars invested in this R&D effort.

How does the contract's duration (1555 days) impact the assessment of its value and risk?

The contract duration of 1555 days (approximately 4.25 years) significantly impacts the assessment of its value and risk. A longer duration suggests a complex, multi-phase research and development project that requires sustained effort and potentially involves evolving requirements. From a value perspective, it allows for in-depth exploration and development of advanced technologies. However, it also increases the risk of cost escalation due to inflation, potential changes in technology or threat landscapes, and the possibility of scope creep over such an extended period. For a Cost Plus Fixed Fee contract, a longer duration amplifies the importance of stringent oversight and change management to ensure the project stays within budget and aligned with evolving strategic needs. It also means taxpayer funds are committed for a substantial period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV06R0793

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 48310

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,728,383

Exercised Options: $15,728,383

Current Obligation: $15,728,383

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline