General Dynamics awarded $32.6M for PROPHET Enhanced RDT&E, a sole-source contract for communications equipment

Contract Overview

Contract Amount: $32,621,042 ($32.6M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-01-03

End Date: 2023-09-30

Contract Duration: 1,366 days

Daily Burn Rate: $23.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: TASK ORDER W56KGY-19-F-0013 IS HEREBY ISSUED IN ACCORDANCE WITH (IAW) THE TERMS AND CONDITIONS OF BASIC CONTRACT W56KGY-17-D-0006 FOR RESEARCH, DEVELOPMENT, TEST, AND EVALUATION TECHNICAL INSERTION, FOR THE PROPHET ENHANCED PROGRAM OF RECORD.

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $32.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: TASK ORDER W56KGY-19-F-0013 IS HEREBY ISSUED IN ACCORDANCE WITH (IAW) THE TERMS AND CONDITIONS OF BASIC CONTRACT W56KGY-17-D-0006 FOR RESEARCH, DEVELOPMENT, TEST, AND EVALUATION TECHNICAL INSERTION, FOR THE PROPHET ENHANCED PROGRAM OF RECORD. Key points: 1. Contract focuses on research, development, test, and evaluation for a specific program. 2. Sole-source award raises questions about price discovery and potential for overpayment. 3. Long performance period (1366 days) suggests a complex or ongoing development effort. 4. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 5. Awarded to a single vendor, limiting opportunities for market-based innovation. 6. The specific program (PROPHET Enhanced) is critical for Army communications capabilities.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific RDT&E focus. Without competitive bids, it's difficult to ascertain if the $32.6 million represents a fair market price. The Cost Plus Fixed Fee (CPFF) contract type, while common for RDT&E, carries inherent risks of cost escalation if not closely managed. Comparing it to similar RDT&E efforts for specialized communication systems would be necessary for a more robust value assessment, but such data is not readily available.

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 Mission Systems, Inc., was solicited. This approach is typically justified when a unique capability or proprietary technology is required, or when only one source is capable of meeting the requirement. However, the lack of competition means there was no opportunity for price negotiation based on multiple offers, potentially leading to a higher price than if the contract had been competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing offers, the government had limited leverage to negotiate the lowest possible price for the RDT&E services.

Public Impact

The U.S. Army benefits from the development and enhancement of its PROPHET communication systems. Services delivered include research, development, testing, and evaluation of advanced communication technology. The geographic impact is primarily within the Department of Defense, supporting military operations. Workforce implications include specialized RDT&E roles within General Dynamics and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
Lack of transparency in the justification for sole-source award.
Potential for vendor lock-in due to specialized nature of RDT&E.

Positive Signals

Award to an established contractor with a track record in defense systems.
Focus on RDT&E for a critical military program.
Long-term contract indicates a sustained need for the technology.

Sector Analysis

This contract falls within the Other Communications Equipment Manufacturing sector, specifically focusing on research, development, test, and evaluation (RDT&E) for a specialized military program. The market for defense communications equipment is characterized by high technological barriers to entry and significant government investment. Comparable spending benchmarks are difficult to establish without detailed knowledge of the PROPHET Enhanced program's specific technical requirements and the competitive landscape for such niche RDT&E services.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting plans specifically targeting small businesses in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless General Dynamics Mission Systems actively engages small businesses for specialized RDT&E support.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the achievement of RDT&E milestones outlined in the contract. Transparency is limited due to the sole-source nature and the proprietary aspects of defense RDT&E. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Tactical Communications Systems
Defense Research and Development Programs
Military Communications Equipment Manufacturing
PROPHET Program

Risk Flags

Sole-source award
Cost-plus contract type
Long performance period
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. TASK ORDER W56KGY-19-F-0013 IS HEREBY ISSUED IN ACCORDANCE WITH (IAW) THE TERMS AND CONDITIONS OF BASIC CONTRACT W56KGY-17-D-0006 FOR RESEARCH, DEVELOPMENT, TEST, AND EVALUATION TECHNICAL INSERTION, FOR THE PROPHET ENHANCED PROGRAM OF RECORD.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS MISSION 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 $32.6 million.

What is the period of performance?

Start: 2020-01-03. End: 2023-09-30.

What is the specific technical capability of the PROPHET Enhanced Program of Record?

The PROPHET Enhanced Program of Record is a U.S. Army initiative focused on providing robust, tactical battlefield communication capabilities. It aims to deliver integrated systems that support voice and data communications across various echelons of command. The 'Enhanced' designation suggests upgrades and improvements over previous iterations, likely incorporating newer technologies for increased bandwidth, security, and interoperability. These systems are crucial for maintaining situational awareness and command and control in dynamic operational environments. The RDT&E work under this task order would focus on advancing these capabilities, potentially including software updates, hardware modifications, and rigorous testing to ensure reliability and performance under demanding conditions.

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

The justification for a sole-source award typically stems from specific circumstances where competition is not feasible or not in the government's best interest. For RDT&E contracts, this often occurs when a contractor possesses unique technical expertise, proprietary data, or has already invested significantly in developing a specific technology or system. In the case of the PROPHET Enhanced Program, General Dynamics Mission Systems may have been the only entity with the necessary knowledge, intellectual property, or existing infrastructure to perform the required research, development, testing, and evaluation. Without this specific justification, a sole-source award would be unusual and potentially violate procurement regulations designed to ensure fair and open competition.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost management for this RDT&E effort?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development efforts where the scope of work can be uncertain or evolve. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as it doesn't increase with higher costs), the primary risk of cost overrun lies with the government. If the contractor's costs exceed estimates, the government still pays the actual costs plus the fixed fee. Effective oversight, detailed cost tracking, and clear milestone definitions are crucial to manage potential cost escalations and ensure the government receives value for its investment.

What are the potential risks associated with a long-duration contract (1366 days) for RDT&E?

A long-duration contract for RDT&E, such as this 1366-day task order, presents several potential risks. Firstly, technological obsolescence: the technology being developed might become outdated before the project is completed, especially in fast-moving fields like communications. Secondly, scope creep: the extended timeline can make it easier for requirements to change or expand, leading to increased costs and delays if not managed through formal contract modifications. Thirdly, contractor performance degradation: maintaining focus and efficiency over several years can be challenging for both the contractor and the government oversight team. Finally, market shifts: changes in strategic priorities or budget allocations within the government could impact the program's continuation or relevance.

How does this contract compare to other spending on military communications equipment RDT&E?

Comparing this $32.6 million task order to overall military communications equipment RDT&E spending requires broader context. The Department of Defense invests billions annually in research, development, and acquisition of advanced communication systems across all branches. This specific contract represents a portion of that investment dedicated to a particular program (PROPHET Enhanced). While the dollar amount is significant for a single task order, it is likely a fraction of the total RDT&E budget for tactical communications. Benchmarking requires analyzing similar sole-source RDT&E contracts for specialized systems, which are often difficult to access publicly due to their sensitive nature and unique technical specifications.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 8201 E MCDOWELL ROAD, SCOTTSDALE, AZ, 85257

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

Financial Breakdown

Contract Ceiling: $40,179,400

Exercised Options: $32,621,042

Current Obligation: $32,621,042

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $6,939,397

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56KGY17D0006

IDV Type: IDC

Timeline