Department of the Army awards $24.3M engineering services contract to General Dynamics Land Systems Inc

Contract Overview

Contract Amount: $24,280,982 ($24.3M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2015-03-19

End Date: 2019-12-31

Contract Duration: 1,748 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: IGF::OT::IGF Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract was not competed, raising questions about potential cost savings through competition. 3. A long duration of 1748 days suggests a significant, ongoing need for these engineering services. 4. The contract's value is substantial, requiring careful oversight to ensure value for money. 5. Services are categorized under Engineering Services, a broad field with diverse applications. 6. The award was made to a single, large, established defense contractor.

Value Assessment

Rating: fair

The contract value of $24.3 million over approximately 4.8 years represents a significant investment. Without comparable contract data for similar engineering services within the Department of the Army or across the DoD, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator. The lack of competition, however, limits the ability to benchmark pricing against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This approach is typically used when only one source is capable of meeting the requirement, or in specific circumstances where competition is not feasible or advantageous. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from a bidding process.

Taxpayer Impact: Taxpayers may have paid a higher price than if the contract had been competed. The absence of competitive pressure could lead to less favorable pricing and terms for the government.

Public Impact

The primary beneficiaries are likely the Department of the Army, receiving specialized engineering services to support its operations. The services delivered are engineering-related, potentially encompassing design, development, testing, or sustainment of military systems or infrastructure. The geographic impact is centered around the operations of the Department of the Army, with potential implications for personnel and facilities within its purview. Workforce implications could include the employment of engineers and technical staff by General Dynamics Land Systems Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs for taxpayers.
Sole-source awards require strong justification to ensure they are in the government's best interest.
Long contract duration necessitates ongoing monitoring to ensure continued alignment with evolving needs.
The specific nature of engineering services can sometimes be complex to define and oversee effectively.

Positive Signals

Firm-fixed-price contract structure shifts cost risk to the contractor.
Award to a large, established contractor like General Dynamics suggests a focus on capability and reliability.
The contract addresses a specific, defined need within the Department of the Army.

Sector Analysis

The engineering services sector is a critical component of the defense industrial base, providing essential support for the development, maintenance, and modernization of military platforms and systems. This contract falls within the broader defense sector, where specialized engineering expertise is consistently in demand. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the engineering services, but significant contracts in this area often range from millions to billions of dollars, reflecting the complexity and criticality of defense engineering.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award was made directly to a large prime contractor, General Dynamics Land Systems Inc. This suggests that small businesses are unlikely to be direct recipients of this prime contract. However, there is potential for subcontracting opportunities to small businesses, depending on the prime contractor's subcontracting plan and the specific nature of the engineering services required. The absence of a set-aside means that the primary focus was not on direct small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. The firm-fixed-price nature of the contract provides a degree of accountability for cost control by the contractor.

Related Government Programs

Department of Defense Engineering Services
Army Combat Systems Development
Military Vehicle Engineering
Defense Research and Development Support

Risk Flags

Sole-source award requires justification.
Potential for uncompetitive pricing.
Lack of transparency in competition process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to GENERAL DYNAMICS LAND SYSTEMS INC.. IGF::OT::IGF

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 $24.3 million.

What is the period of performance?

Start: 2015-03-19. End: 2019-12-31.

What specific engineering services are being provided under this contract?

The provided data indicates the contract is for 'Engineering Services' (nd: Engineering Services) under NAICS code 541330. However, the specific nature of these services is not detailed in the abbreviated data. These could range from conceptual design and analysis to detailed engineering, testing, integration, and sustainment support for various Army platforms or systems. Without further documentation, such as the contract statement of work, the precise scope of engineering activities remains unspecified. This lack of detail makes it challenging to fully assess the contract's objectives and performance metrics.

How does the $24.3 million contract value compare to similar engineering services contracts awarded by the Department of the Army?

Comparing the $24.3 million value requires access to a broader dataset of similar contracts. However, for a contract spanning approximately 4.8 years (1748 days), this value averages around $5 million per year. This figure is moderate for specialized engineering services within a large organization like the Department of the Army, which procures a wide range of services from minor technical support to major system development. Without specific benchmarks for comparable engineering tasks (e.g., vehicle design, systems integration, simulation development), it's difficult to definitively state if this represents high or low spending. The sole-source nature also complicates direct value comparisons.

What are the primary risks associated with a sole-source award for engineering services?

The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competitive pressure. The government may not achieve the best possible price or terms. Another risk is a lack of innovation, as the incumbent contractor may not feel compelled to introduce cost-saving efficiencies or novel solutions if there is no threat of losing the contract to a competitor. Furthermore, sole-source awards can sometimes mask underlying issues with market research or acquisition planning, suggesting that competition was not adequately explored or pursued. Robust oversight and negotiation are crucial to mitigate these risks.

What is the track record of General Dynamics Land Systems Inc. in delivering engineering services to the government?

General Dynamics Land Systems Inc. (GDLS) is a major defense contractor with a long history of providing complex systems and services to the U.S. military, particularly in the area of ground combat vehicles. Their track record includes the development and production of iconic platforms like the Abrams tank and Stryker vehicle. While known for large-scale production and integration, their performance on specific engineering services contracts can vary. GDLS has experience in various engineering disciplines relevant to defense, including mechanical, electrical, and systems engineering. A detailed review of their past performance on similar contracts, including any past performance evaluations or disputes, would be necessary for a comprehensive assessment.

How has spending on engineering services by the Department of the Army evolved over the past five years?

To assess the evolution of spending on engineering services by the Department of the Army, one would need to analyze historical contract data over the past five years, specifically filtering for NAICS code 541330 and the awarding agency 'Department of the Army'. This analysis would reveal trends in total obligated amounts, the number of contracts awarded, and the prevalence of competitive versus sole-source procurements. Without access to this historical data, it is impossible to provide specific figures or trends. However, it is generally understood that the Army consistently invests significant resources in engineering services to maintain and modernize its vast array of equipment and infrastructure.

What are the potential performance implications of a firm-fixed-price contract for complex engineering tasks?

A firm-fixed-price (FFP) contract holds the contractor financially responsible for all costs incurred in performing the work. For complex engineering tasks, this can incentivize efficiency and cost control by the contractor. However, it also places the risk of unforeseen technical challenges or cost overruns squarely on the contractor. If the scope of work is not precisely defined or if significant technical uncertainties exist, an FFP contract could lead the contractor to either price very high to cover potential risks or to cut corners if they underestimate costs, potentially impacting quality. Clear and comprehensive SOWs are critical for FFP success in complex engineering.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV14R0230

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,280,982

Exercised Options: $24,280,982

Current Obligation: $24,280,982

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline