DoD awards $44.1M for fire control units, with General Dynamics Land Systems Inc. as the sole provider

Contract Overview

Contract Amount: $44,109,149 ($44.1M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2019-11-08

End Date: 2023-06-15

Contract Duration: 1,315 days

Daily Burn Rate: $33.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: REPAIR AND UPGRADE OF 91 IMPROVED FIRE CONTROL ELECTRONIC UNITS (IFCEUS) AND PURCHASE OF 91 NEW IFCEUS

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $44.1 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: REPAIR AND UPGRADE OF 91 IMPROVED FIRE CONTROL ELECTRONIC UNITS (IFCEUS) AND PURCHASE OF 91 NEW IFCEUS Key points: 1. Contract awarded to a single, established defense contractor, raising questions about competitive pricing. 2. Focus on repair and upgrade of existing units alongside new purchases suggests a need for modernization and sustainment. 3. The contract duration of over three years indicates a significant, long-term requirement for these critical components. 4. Firm Fixed Price contract type aims to control costs, but limited competition may offset this benefit. 5. The specific nature of the IFCEUs points to a specialized niche within military vehicle technology. 6. No small business set-aside indicates the scale and nature of the requirement likely favored large prime contractors.

Value Assessment

Rating: fair

The contract value of $44.1 million for 91 IFCEUs and associated repairs appears substantial. Without specific unit cost data or benchmarks for comparable electronic fire control systems, it is difficult to definitively assess value for money. The firm fixed price structure provides cost certainty, but the lack of competition is a significant concern that could lead to inflated pricing compared to a more open market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Land Systems Inc., was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where only one source can fulfill the requirement. The lack of competition means potential savings from a bidding process were not realized, and the government relied on negotiation to secure terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without alternative offers, it's challenging to ascertain if the price reflects the best possible value achievable in a competitive environment.

Public Impact

The primary beneficiaries are the U.S. Army units equipped with the affected military vehicles, ensuring their fire control systems are operational and modernized. Services delivered include the repair and upgrade of 91 existing Improved Fire Control Electronic Units (IFCEUs) and the purchase of 91 new units. The geographic impact is likely concentrated where these specific military vehicles are deployed or maintained. Workforce implications may involve specialized technicians for repair and integration, potentially within General Dynamics' facilities or at military depots.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Dependence on a single contractor for critical military components can create supply chain risks.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
General Dynamics Land Systems Inc. is an established contractor with a track record in defense systems.
Repair and upgrade component ensures sustainment of existing assets, potentially extending their service life.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on military armored vehicle components. The market for such specialized electronic systems is often dominated by a few large, established defense contractors due to high barriers to entry, including R&D costs, security clearances, and specialized manufacturing capabilities. Spending in this niche is driven by military modernization programs and sustainment requirements for aging fleets.

Small Business Impact

The absence of a small business set-aside suggests that the requirement was either too specialized or too large in scope to be effectively fulfilled by small businesses. It is possible that General Dynamics Land Systems Inc. may utilize small business subcontractors for certain components or services, but this is not explicitly detailed in the provided data. The overall impact on the small business ecosystem for this specific contract appears minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed price contract type, which obligates the contractor to deliver specified goods and services at an agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Vehicle Modernization Programs
Defense Electronics Procurement
Armored Vehicle Component Manufacturing
Tactical Vehicle Sustainment

Risk Flags

Sole-source award
Lack of competitive pricing data
Potential for cost overruns without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.1 million to GENERAL DYNAMICS LAND SYSTEMS INC.. REPAIR AND UPGRADE OF 91 IMPROVED FIRE CONTROL ELECTRONIC UNITS (IFCEUS) AND PURCHASE OF 91 NEW 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 $44.1 million.

What is the period of performance?

Start: 2019-11-08. End: 2023-06-15.

What is the historical spending pattern for IFCEUs by the Department of Defense?

Analyzing historical spending on Improved Fire Control Electronic Units (IFCEUs) requires access to detailed procurement databases. However, general trends in defense electronics suggest consistent investment in these critical systems to maintain battlefield superiority. Spending often fluctuates based on modernization cycles, geopolitical events, and the lifecycle of existing military platforms. Contracts for such specialized components are typically awarded to a limited number of prime contractors with proven expertise, often through sole-source or limited competition vehicles due to the high technical requirements and security considerations. Without specific historical data for IFCEUs, it's difficult to provide precise figures, but the nature of the technology implies significant, recurring investment over time to ensure operational readiness and technological relevance.

How does the unit cost of these IFCEUs compare to similar systems in the market?

Benchmarking the unit cost of these IFCEUs is challenging without access to specific pricing details and comparable market data. The provided data indicates a total award of $44.1 million for 91 new IFCEUs and repairs, suggesting an average cost per new unit in the range of several hundred thousand dollars, excluding repair costs. The sole-source nature of this award significantly hinders direct comparison, as competitive bids often drive down prices. To perform a robust comparison, one would need data on similar fire control systems procured competitively by other military branches or allied nations, factoring in differences in technical specifications, capabilities, and production volumes. The absence of such comparative data makes it difficult to definitively assess if the price paid represents good value for money.

What are the specific risks associated with a sole-source award for critical military components?

Sole-source awards for critical military components like IFCEUs present several risks. Firstly, the primary risk is financial: the government may pay a higher price than if the contract were competed, as the contractor faces no direct competitive pressure to offer the lowest possible cost. Secondly, there's a risk of vendor lock-in, where the government becomes overly dependent on a single supplier, potentially limiting future flexibility and negotiation power. This dependence can also create supply chain vulnerabilities; disruptions at the sole source could significantly impact military readiness. Lastly, without the scrutiny of a competitive bidding process, there's a reduced incentive for the contractor to innovate or optimize efficiency, potentially leading to stagnation in technology or performance over time.

What is the track record of General Dynamics Land Systems Inc. in delivering similar electronic systems?

General Dynamics Land Systems Inc. (GDLS) has a long-standing and extensive track record in the defense sector, particularly in the manufacturing and sustainment of armored vehicles and their associated systems. They are a primary contractor for numerous U.S. Army platforms, including the Abrams Main Battle Tank and the Stryker family of vehicles. Their experience encompasses the integration of complex electronic systems, including fire control, communication, and sensor technologies, into these platforms. GDLS has consistently been awarded large-scale contracts for vehicle production, upgrades, and maintenance, demonstrating their capability to manage complex projects and deliver sophisticated military hardware. Their established position within the defense industrial base suggests a high level of technical expertise and program management capability relevant to the IFCEU contract.

How does the duration and value of this contract align with typical defense electronics procurement?

The duration of this contract (approximately 3.5 years from award to estimated completion) and its value ($44.1 million) are generally aligned with typical procurements for specialized defense electronic systems. Such systems often require significant research, development, testing, and integration, necessitating multi-year contracts. The value reflects the complexity and critical nature of fire control systems, which are essential for platform effectiveness. While individual unit costs can be high, the total contract value is moderate within the broader context of major defense acquisitions. The firm fixed price structure is common for systems where technical specifications are well-defined, aiming to provide cost predictability for the government over the contract's life.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $44,109,150

Exercised Options: $44,109,149

Current Obligation: $44,109,149

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $32,379,151

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV17D0089

IDV Type: IDC

Timeline