DoD Awards $138M Engineering Support Contract to General Dynamics, Lacking Competition

Contract Overview

Contract Amount: $137,950,938 ($138.0M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2019-02-14

End Date: 2027-01-30

Contract Duration: 2,907 days

Daily Burn Rate: $47.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: STRYKER LOGISTICS ENGINEERING SUPPORT

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $138.0 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: STRYKER LOGISTICS ENGINEERING SUPPORT Key points: 1. Significant contract value of $138 million for logistics engineering support. 2. Sole awardee, General Dynamics Land Systems Inc., raises competition concerns. 3. Potential for inflated costs due to lack of competitive bidding. 4. Engineering Services sector sees substantial government investment.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive benchmarking, assessing the fairness of the fixed fee is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to reduce bids.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these engineering services.

Public Impact

Taxpayers may be overpaying for essential engineering services due to a lack of competitive bidding. The long duration of the contract (ending 2027) means potential overspending could continue for years. Dependence on a single contractor for critical logistics engineering support could pose a risk if performance falters.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration

Positive Signals

Essential service provision
Experienced contractor

Sector Analysis

This contract falls within the Engineering Services sector, which is crucial for defense operations. Spending in this area is often high due to the complexity and specialized nature of the work.

Small Business Impact

The data indicates that small businesses were not involved in this specific contract award, as it was awarded to a large corporation and was not competed.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets requirements. Transparency in reporting is essential.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited transparency
Long-term dependency on one vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $138.0 million to GENERAL DYNAMICS LAND SYSTEMS INC.. STRYKER LOGISTICS ENGINEERING SUPPORT

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 $138.0 million.

What is the period of performance?

Start: 2019-02-14. End: 2027-01-30.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available sources. Without further information, it's difficult to assess if these criteria were met. A thorough review would be needed to confirm the necessity of bypassing the competitive process and ensure it was in the government's best interest.

How will the agency ensure cost control and value for money with a Cost Plus Fixed Fee contract awarded non-competitively?

Effective oversight is critical. The agency must implement robust monitoring of direct costs, establish clear performance metrics, and conduct regular audits. Benchmarking against similar services, even if not directly competed, can help identify potential cost anomalies. Strong negotiation and management of the fixed fee are also paramount.

What are the risks associated with relying on a single contractor for logistics engineering support over an extended period?

The primary risks include potential complacency, reduced innovation, and vulnerability to contractor performance issues or financial instability. If the contractor fails to perform adequately or faces disruptions, the Department of the Army could experience significant operational impacts. Contingency planning and strong contract management are vital to mitigate these risks.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $137,950,938

Exercised Options: $137,950,938

Current Obligation: $137,950,938

Actual Outlays: $11,073

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $13,765,962

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV19D0046

IDV Type: IDC

Timeline