DoD's $85.6M Facilities Support Services Contract Awarded to General Dynamics Land Systems Inc

Contract Overview

Contract Amount: $85,561,673 ($85.6M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-28

End Date: 2028-09-09

Contract Duration: 1,442 days

Daily Burn Rate: $59.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Other

Official Description: YEAR 4 DELIVERY ORDER TO CONTRACT W56HZV-21-D-0085

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $85.6 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: YEAR 4 DELIVERY ORDER TO CONTRACT W56HZV-21-D-0085 Key points: 1. Contract awarded for facilities support services, indicating a need for ongoing operational maintenance and management. 2. The contract's duration suggests a long-term commitment to these services, potentially impacting future budget allocations. 3. Awarded to a large, established defense contractor, raising questions about potential competition and pricing. 4. The 'NOT COMPETED' status warrants scrutiny regarding the justification for sole-source or limited competition. 5. Performance period extends over several years, requiring consistent oversight to ensure value and service delivery. 6. The nature of facilities support services is critical for maintaining operational readiness within the Army. 7. The contract's value places it as a significant expenditure within the facilities management sector for the DoD.

Value Assessment

Rating: questionable

Benchmarking the value of this $85.6 million facilities support services contract is challenging without detailed service breakdowns and performance metrics. Given the 'NOT COMPETED' status, it's difficult to assess if the pricing reflects competitive market rates. Comparing it to similar large-scale facilities management contracts within the DoD or other federal agencies would be necessary to determine if the cost is reasonable. The Cost No Fee (CNF) contract type suggests the government bears the cost risk, which can sometimes lead to less cost-consciousness from the contractor if not rigorously managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'NOT COMPETED,' indicating it was likely awarded on a sole-source or limited competition basis. The justification for this approach, such as unique capabilities, urgent need, or lack of other responsible sources, would need to be reviewed. Without a competitive bidding process, it is difficult to ascertain the full range of potential providers and the pricing they might have offered. This lack of competition can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The absence of competition means taxpayers may not be benefiting from the most cost-effective solution available. Without a bidding process, there's a reduced incentive for the contractor to offer the lowest possible price, potentially leading to overspending of public funds.

Public Impact

The Department of the Army benefits from the continuity of essential facilities support services, ensuring operational readiness. Services likely include maintenance, repair, and management of physical infrastructure at Army installations. Geographic impact is concentrated at the Army facilities managed by General Dynamics Land Systems Inc., potentially across multiple sites. Workforce implications may involve the contractor's employees performing the services, with potential for local employment opportunities. Ensures that critical infrastructure is maintained, supporting the overall mission effectiveness of the Army.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer money.
The 'Cost No Fee' contract type can incentivize higher spending if not closely monitored for efficiency.
Long contract duration requires sustained oversight to ensure performance and prevent scope creep.
Absence of specific performance metrics in the provided data makes it difficult to assess service quality.
Reliance on a single contractor for essential services could create dependency and reduce flexibility.

Positive Signals

Award to a large, experienced defense contractor like General Dynamics suggests a capacity to handle complex facilities management.
The contract's duration indicates a stable, long-term provision of critical support services.
Facilities support is essential for maintaining operational readiness and infrastructure integrity.
The contract is for a defined period, allowing for future re-evaluation of needs and procurement strategies.

Sector Analysis

Facilities Support Services fall under the broader category of facility operations and maintenance, a significant sector within government contracting. This industry encompasses a wide range of services including building maintenance, repair, custodial services, groundskeeping, and utility management. Government spending in this area is substantial, driven by the need to maintain extensive real property portfolios across various agencies. Comparable spending benchmarks would involve analyzing other large-scale facilities management contracts awarded by the Department of Defense or civilian agencies, considering factors like facility size, type, and geographic location.

Small Business Impact

The provided data indicates that small business participation (sb) is false (ss: false, sb: false). This suggests that there are no explicit small business set-aside requirements for this contract, nor is there an indication of subcontracting goals for small businesses within the data. Consequently, the direct impact on the small business ecosystem from this specific contract appears minimal. However, the prime contractor, General Dynamics Land Systems Inc., may engage small businesses for certain support roles not captured in this summary data, which would require further investigation into their subcontracting plans.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Given the 'NOT COMPETED' status and the 'Cost No Fee' structure, rigorous oversight is crucial to ensure that costs are reasonable and that the contractor is delivering services efficiently and effectively. Accountability measures would be defined in the contract's terms and conditions, outlining performance standards and remedies for non-compliance. Transparency might be limited due to the non-competitive award, but contract details and performance reports should be accessible through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Army Base Operations Support Services
General Services Administration (GSA) Facilities Management Schedules
Department of Veterans Affairs Facility Operations
Department of Homeland Security Facilities Support

Risk Flags

Non-competitive award justification required
Potential for cost overruns due to CNF contract type
Contractor's primary expertise may not align with services
Lack of transparency in competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.6 million to GENERAL DYNAMICS LAND SYSTEMS INC.. YEAR 4 DELIVERY ORDER TO CONTRACT W56HZV-21-D-0085

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 $85.6 million.

What is the period of performance?

Start: 2024-09-28. End: 2028-09-09.

What specific facilities support services are included under this contract, and what are the performance standards?

The provided data identifies the contract as being for 'Facilities Support Services' (NAICS code 561210) but does not detail the specific services rendered. Typically, these services can encompass a broad range of activities such as building operations and maintenance, repair services, custodial services, grounds maintenance, pest control, and waste management. Performance standards would be outlined in the contract's Performance Work Statement (PWS) or Statement of Work (SOW), detailing measurable objectives for service delivery, response times, quality of work, and customer satisfaction. Without access to the full contract documentation, a precise list of services and their associated standards cannot be provided. However, given the scale and duration, it implies comprehensive support for significant Army installations.

What is the justification for awarding this $85.6 million contract on a 'NOT COMPETED' basis?

The 'NOT COMPETED' designation signifies that the contract was not awarded through a full and open competitive process. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for competitive contracting, but also provides exceptions for non-competitive awards. Common justifications include: 1) Only one responsible source exists (e.g., unique proprietary technology or capability). 2) Urgent and compelling need where delays associated with competition would result in unacceptable delays in fulfilling the Government's needs. 3) Specific statutory authority allowing for non-competitive procurement. 4) Post-competition award where only one offer was received and it was determined to be fair and reasonable. To understand the specific justification for this contract, one would need to review the Justification and Approval (J&A) document associated with the non-competitive award, which is typically made public.

How does the 'Cost No Fee' (CNF) contract type impact cost control and contractor incentives?

A Cost No Fee (CNF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This structure is typically used when the level of risk or uncertainty is so high that a fee is not appropriate, or when the contractor is performing a service that is essentially an extension of government operations. For cost control, the government bears the financial risk of cost overruns, as the contractor is reimbursed for all allowable costs. This places a significant burden on the government to implement robust oversight and auditing processes to ensure costs are reasonable, allocable, and allowable. Contractor incentives for efficiency are generally lower compared to fixed-price contracts, as there is no direct financial reward for cost savings. The primary incentive is fulfilling the contract requirements.

What is the historical spending pattern for facilities support services at the relevant Army installations?

Analyzing historical spending patterns for facilities support services at the specific Army installations covered by this contract would provide crucial context for evaluating the $85.6 million award. This would involve examining past contracts for similar services, noting the award amounts, contract types, durations, and the contractors involved. Significant increases or decreases in spending over time, or a consistent reliance on a single contractor without competition, could indicate trends or potential issues. For instance, if previous spending was significantly lower for comparable services, it might suggest an escalation in costs or scope. Conversely, if spending has been consistently high and stable, it might reflect the ongoing needs and market rates for these essential services. Without access to historical procurement data for these specific installations, this analysis remains speculative.

What is General Dynamics Land Systems Inc.'s track record with similar facilities support contracts for the Department of Defense?

General Dynamics Land Systems Inc. (GDLS) is primarily known for its expertise in armored vehicle manufacturing and defense systems. While GDLS is a major defense contractor, its core business is not typically facilities support services. Therefore, its track record with large-scale, long-term facilities management contracts for the DoD may be limited or non-existent. It is possible that GDLS is performing these services through a subsidiary or a joint venture, or that this contract represents a diversification into a new service area. A review of GDLS's contract history, particularly focusing on facilities operations and maintenance contracts, would be necessary to assess their experience and performance in this specific domain. If their experience in facilities support is minimal, it could increase the risk associated with this contract.

Are there any comparable facilities support contracts awarded through full and open competition that could serve as a benchmark?

Yes, there are numerous facilities support contracts awarded through full and open competition across the federal government, particularly within the Department of Defense and the General Services Administration (GSA). These contracts often involve similar services such as base operations support, facility maintenance, repair, and management. Benchmarking this $85.6 million 'NOT COMPETED' contract against competitively awarded contracts would involve identifying similar-sized contracts for comparable services at comparable installations. Key metrics for comparison would include the price per square foot, price per facility, or price per service element, adjusted for geographic location, labor costs, and specific service requirements. The existence of competitively awarded contracts provides a market-based reference point to assess whether the non-competed award represents fair and reasonable pricing.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST NO FEE (S)

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: $85,561,673

Exercised Options: $85,561,673

Current Obligation: $85,561,673

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $9,322,490

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV21D0085

IDV Type: IDC

Timeline