DoD's $22.7M contract for speed changers awarded to General Dynamics-OTS, Inc. in 2010, with a 2-year term

Contract Overview

Contract Amount: $22,707,283 ($22.7M)

Contractor: General Dynamics-Ots, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-07-30

End Date: 2012-07-31

Contract Duration: 732 days

Daily Burn Rate: $31.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS AWARD FORMALLY ESTABLISHES AND INCORPORATES THE TERMS AND CONDITIONS, AND MANDATORY CLAUSES AND PRICING STUCTURE IN THE ELECTRONIC PADDS SYSTEM AFTER ISSUANCE OF THE UNDEFINITIZED CONTRACT ACTION (UCA) THAT WAS ISSUED VIA LETTER CONTRACT AWARD ON 30 JULY 2010.

Place of Performance

Location: WILLISTON, CHITTENDEN County, VERMONT, 05495

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to GENERAL DYNAMICS-OTS, INC. for work described as: THIS AWARD FORMALLY ESTABLISHES AND INCORPORATES THE TERMS AND CONDITIONS, AND MANDATORY CLAUSES AND PRICING STUCTURE IN THE ELECTRONIC PADDS SYSTEM AFTER ISSUANCE OF THE UNDEFINITIZED CONTRACT ACTION (UCA) THAT WAS ISSUED VIA LETTER CONTRACT AWARD ON 30 JULY 2010. Key points: 1. The contract value of $22.7 million over two years suggests a significant investment in specialized industrial equipment. 2. Awarded as 'NOT COMPETED', this indicates a potential lack of market exploration or a specific justification for sole-source procurement. 3. The firm-fixed-price contract type aims to provide cost certainty for the government, shifting cost risk to the contractor. 4. The duration of 732 days (approximately 2 years) is typical for procuring complex industrial components. 5. The North American Industry Classification System (NAICS) code 333612 points to the manufacturing of industrial high-speed drives and gear manufacturing. 6. The contract was issued following an undefinitized contract action (UCA), suggesting an initial urgent need or phased approach to finalization.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the 'Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing' specifications. However, a $22.7 million award for a two-year period for specialized industrial equipment suggests a substantial investment. The lack of competition raises concerns about whether the government secured the best possible price. Without comparable contract data or detailed cost breakdowns, it's difficult to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'NOT COMPETED', indicating a sole-source award. This means the Department of the Army did not solicit bids from multiple potential suppliers. Such awards are typically made when only one source can fulfill the requirement, often due to proprietary technology, unique capabilities, or urgent needs where competition is not feasible. The lack of competition limits price discovery and may result in higher costs compared to a fully competed procurement.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive pricing, potentially leading to a higher overall expenditure for the required speed changers and related industrial equipment.

Public Impact

The Department of Defense (specifically the Department of the Army) is the primary beneficiary, receiving critical industrial equipment. The services delivered include the provision of speed changers and industrial high-speed drives, essential for various military operational or maintenance functions. The geographic impact is likely concentrated within military facilities or depots where this equipment is installed or maintained. Workforce implications could involve specialized technicians for installation, maintenance, and operation of this industrial machinery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal value for taxpayer funds.
The use of an Undefinitized Contract Action (UCA) followed by a formal award suggests a potentially rushed or complex initial procurement process.
Limited transparency due to sole-source nature makes it difficult to independently verify the necessity and cost-effectiveness of the award.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, mitigating the risk of cost overruns.
The award to a known entity like General Dynamics-OTS, Inc. may indicate a reliance on established suppliers with proven capabilities for specialized equipment.
The contract specifies a clear end date, providing a defined period for delivery and performance.

Sector Analysis

This contract falls within the industrial machinery manufacturing sector, specifically focusing on high-speed drives and gear systems. This is a niche but critical area supporting various industrial and defense applications. The market for such specialized components can be concentrated among a few key manufacturers. Spending benchmarks for similar industrial equipment can vary widely based on customization, volume, and technological sophistication. The Department of Defense is a significant consumer of such specialized manufacturing capabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no specific mention of subcontracting plans for small businesses (sb: false). This suggests that the primary contractor, General Dynamics-OTS, Inc., is likely a large business, and the procurement did not prioritize small business participation. Consequently, the direct impact on the small business ecosystem for this specific award appears minimal, with no explicit mechanisms in place to ensure subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a firm-fixed-price contract, oversight would focus on ensuring timely delivery and adherence to specifications. The use of an Undefinitized Contract Action (UCA) initially might have involved specific oversight protocols during its preliminary phase. Transparency is limited due to the sole-source nature, making public oversight more challenging. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Industrial Equipment Procurement
Defense Manufacturing Contracts
High-Speed Drive Systems
Gear Manufacturing
Sole-Source Defense Awards
Undefinitized Contract Actions (UCAs)

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing
Limited transparency
Use of Undefinitized Contract Action (UCA)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to GENERAL DYNAMICS-OTS, INC.. THIS AWARD FORMALLY ESTABLISHES AND INCORPORATES THE TERMS AND CONDITIONS, AND MANDATORY CLAUSES AND PRICING STUCTURE IN THE ELECTRONIC PADDS SYSTEM AFTER ISSUANCE OF THE UNDEFINITIZED CONTRACT ACTION (UCA) THAT WAS ISSUED VIA LETTER CONTRACT AWARD ON 30 JULY 2010.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS-OTS, 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 $22.7 million.

What is the period of performance?

Start: 2010-07-30. End: 2012-07-31.

What is the specific technical capability or unique requirement that necessitated a sole-source award to General Dynamics-OTS, Inc. for these speed changers?

The provided data does not specify the exact technical capability or unique requirement that led to the sole-source award. Typically, sole-source procurements are justified when only one responsible source is available or capable of meeting the government's needs. This could be due to proprietary technology, unique manufacturing processes, specialized expertise, or urgent and compelling circumstances where competition is not feasible. Without further documentation or justification from the Department of the Army, the precise reason remains unclear. This lack of transparency is a common concern with non-competed contracts, as it limits the public's ability to understand the rationale behind awarding contracts without competitive bidding.

How does the $22.7 million contract value compare to industry benchmarks for similar industrial high-speed drives and gear manufacturing services?

Comparing the $22.7 million contract value to industry benchmarks for similar industrial high-speed drives and gear manufacturing is difficult without more specific details about the contract's scope, specifications, and quantity. The nature of 'Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing' can encompass a wide range of products, from standard components to highly customized, heavy-duty industrial machinery. General Dynamics-OTS, Inc. is a known entity in defense manufacturing, suggesting the equipment may be specialized for military applications. However, the lack of competition means there's no direct market comparison to establish if this price represents good value. A firm-fixed-price contract aims to provide cost certainty, but without competitive bids, it's hard to gauge if the price was optimized.

What are the potential risks associated with awarding a contract of this magnitude ($22.7M) on a sole-source basis?

The primary risk associated with awarding a $22.7 million contract on a sole-source basis is the potential for paying a non-competitive price, which could be higher than if the contract were competed. This lack of competition limits price discovery and reduces the government's leverage to negotiate the best possible terms. Other risks include a potential lack of innovation, as the contractor may face less pressure to offer cutting-edge solutions. Furthermore, it can create a perception of favoritism or a lack of due diligence in seeking out all capable sources. For taxpayers, this translates to a higher likelihood of inefficient use of public funds. The government must have robust internal justification processes to ensure sole-source awards are truly necessary and in the best interest of the public.

What is the historical spending pattern for 'Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing' by the Department of the Army or DoD?

The provided data focuses on a single contract awarded in 2010. To understand historical spending patterns for 'Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing' by the Department of the Army or DoD, a broader analysis of federal procurement databases would be necessary. This would involve searching for contracts under NAICS code 333612 and related product service codes (PSCs) over multiple fiscal years. Such an analysis would reveal trends in contract volume, average award values, key contractors, and the prevalence of competitive versus non-competitive awards within this specific manufacturing sector. Without this broader dataset, it's impossible to establish a historical context or identify significant spending patterns beyond this isolated $22.7 million award.

What does the 'Undefinitized Contract Action (UCA)' status imply about the initial procurement process for this contract?

The mention of an 'Undefinitized Contract Action (UCA)' implies that the contract was initially awarded based on a preliminary agreement, likely a letter contract, before all terms and conditions, including final pricing, were settled. UCAs are typically used when the government needs to start work immediately but cannot finalize the contract terms due to various reasons, such as the need for urgent delivery or ongoing negotiations on complex aspects like pricing or technical specifications. The fact that this UCA was issued on July 30, 2010, and the formal award incorporating terms and pricing occurred later, suggests a phased approach to contract finalization. While UCAs can facilitate rapid starts, they also carry risks, including potential cost increases during negotiation and the need for careful oversight to ensure the final contract is fair and reasonable.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing

Product/Service Code: WEAPONS

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

Address: 128 LAKESIDE AVE, BURLINGTON, VT, 00

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,707,283

Exercised Options: $22,707,283

Current Obligation: $22,707,283

Contract Characteristics

Cost or Pricing Data: YES

Timeline