DoD Awards $38.7M to General Dynamics for Fire Control Units, Raising Oversight Questions

Contract Overview

Contract Amount: $38,700,061 ($38.7M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2016-12-27

End Date: 2020-02-28

Contract Duration: 1,158 days

Daily Burn Rate: $33.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACTOR SHALL FURNISH ALL SERVICES, FACILITIES, LABOR, PARTS, MATERIALS, EQUIPMENT, TOOLS AND DATA THAT ARE NECESSARY TO SUPPLY NEW IMPROVED FIRE CONTROL AND ELECTRONIC UNITS (IFCEUS) AND IMPROVED COMMANDERS DISPLAY UNITS (ICDUS), REPAIRED AND UPGRADED IFCEUS, AND NEW CONTAINERS FOR ALL IFCEUS AND ICDUS. THE CONTRACTOR SHALL ALSO INSPECT, UPGRADE AND REPAIR THE GOVERNMENT FURNISHED IFCEUS.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $38.7 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: CONTRACTOR SHALL FURNISH ALL SERVICES, FACILITIES, LABOR, PARTS, MATERIALS, EQUIPMENT, TOOLS AND DATA THAT ARE NECESSARY TO SUPPLY NEW IMPROVED FIRE CONTROL AND ELECTRONIC UNITS (IFCEUS) AND IMPROVED COMMANDERS DISPLAY UNITS (ICDUS), REPAIRED AND UPGRADED IFCEUS, AND NEW CONTAINE… Key points: 1. Contract focuses on critical fire control and display units for military vehicles. 2. General Dynamics Land Systems is the sole awardee, limiting competition. 3. The contract's lack of competition and fixed-price nature warrant close scrutiny. 4. Spending aligns with the Military Armored Vehicle manufacturing sector.

Value Assessment

Rating: fair

The $38.7 million award is a significant sum for specialized military hardware. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous contracts for similar systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to General Dynamics Land Systems. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down the price.

Taxpayer Impact: The lack of competition for this substantial contract may result in taxpayers paying a premium for essential military equipment.

Public Impact

Ensures modernization of critical fire control systems for armored vehicles. Supports a major defense contractor and its supply chain. Potential for increased costs due to non-competitive award. Highlights the need for robust oversight in sole-source procurements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Fixed-price contract with potential for cost overruns if not managed tightly

Positive Signals

Addresses critical military hardware needs
Supports established defense industrial base

Sector Analysis

This contract falls within the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. Spending in this area is often characterized by high technical requirements, long development cycles, and significant government investment, frequently involving specialized contractors.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as General Dynamics Land Systems is a large corporation. There is no indication of subcontracting opportunities for small businesses within this specific award.

Oversight & Accountability

The sole-source nature of this contract necessitates strong oversight from the Department of the Army to ensure the contractor is meeting all requirements efficiently and that costs are reasonable. Transparency in performance metrics and financial reporting is crucial.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for inflated costs due to non-competition.
Fixed-price contract may not fully account for unforeseen complexities.
Limited transparency on justification for sole-source procurement.
No small business participation explicitly stated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.7 million to GENERAL DYNAMICS LAND SYSTEMS INC.. CONTRACTOR SHALL FURNISH ALL SERVICES, FACILITIES, LABOR, PARTS, MATERIALS, EQUIPMENT, TOOLS AND DATA THAT ARE NECESSARY TO SUPPLY NEW IMPROVED FIRE CONTROL AND ELECTRONIC UNITS (IFCEUS) AND IMPROVED COMMANDERS DISPLAY UNITS (ICDUS), REPAIRED AND UPGRADED IFCEUS, AND NEW CONTAINERS FOR ALL IFCEUS AND ICDUS. THE CONTRACTOR SHALL ALSO INSPECT, UPGRADE AND REPAIR THE GOVERNMENT FURNISHED IFCEUS.

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 $38.7 million.

What is the period of performance?

Start: 2016-12-27. End: 2020-02-28.

What justification was provided for awarding this contract on a sole-source basis, and what steps were taken to ensure the price was fair and reasonable?

The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. Without access to the specific justification document, it's impossible to detail the reasoning. However, agencies are expected to conduct market research and price analyses, even in sole-source situations, to validate cost reasonableness against benchmarks or historical data.

What are the potential risks associated with a fixed-price contract for complex military hardware, especially when awarded non-competitively?

Fixed-price contracts aim to shift risk to the contractor, but in complex, non-competitively awarded scenarios, risks remain. The primary risk is that the contractor may have underestimated costs, leading to demands for change orders or reduced quality to maintain profitability. Without competition, the government lacks a benchmark to assess if the initial price was appropriate, potentially overpaying for the delivered goods or services.

How will the effectiveness of these new and improved fire control units be measured, and what is the impact on overall military readiness?

Effectiveness is typically measured through rigorous testing, performance evaluations, and operational feedback post-deployment. Success hinges on the units meeting or exceeding specified technical requirements and enhancing the capabilities of the armored vehicles they are integrated into. Improved readiness is the ultimate goal, ensuring warfighters have reliable and advanced systems to execute their missions effectively.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

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

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

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: $38,700,061

Exercised Options: $38,700,061

Current Obligation: $38,700,061

Subaward Activity

Number of Subawards: 137

Total Subaward Amount: $125,468,898

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline