DoD's $44.6M Logistics and Engineering Support for Land Warrior Systems awarded to General Dynamics Mission Systems

Contract Overview

Contract Amount: $44,570,030 ($44.6M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-25

End Date: 2012-09-20

Contract Duration: 1,091 days

Daily Burn Rate: $40.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LOGISTICS AND ENGINEERING SUPPORT FOR EXISTING LAND WARRIOR SYSTEMS.

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $44.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: LOGISTICS AND ENGINEERING SUPPORT FOR EXISTING LAND WARRIOR SYSTEMS. Key points: 1. Contract provides essential engineering and logistics support for the Land Warrior system, crucial for soldier modernization. 2. The award was a sole-source procurement, raising questions about potential price efficiencies and market competition. 3. Contract duration of nearly three years suggests a significant, ongoing need for these specialized services. 4. The contract's cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 5. Performance context is critical given the system's role in soldier readiness and technological advancement. 6. Sector positioning is within defense logistics and engineering services, a specialized but vital area for military operations.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized engineering services provided. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D and complex services, can lead to higher costs compared to fixed-price contracts if not managed diligently. Without competitive bids, it's difficult to ascertain if the government secured the best possible price. The reported value of approximately $44.6 million over its duration suggests a substantial investment in maintaining and evolving the Land Warrior system.

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 used when a unique capability or proprietary technology is required, or in situations where competition is not feasible or practical. The lack of competition means that price discovery through market forces was absent, potentially leading to a higher price than if multiple bids had been received. The justification for sole-source procurement would need to be robust to ensure taxpayer value.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down costs, potentially resulting in higher expenditures for taxpayers. It also bypasses opportunities to foster innovation among a broader range of defense contractors.

Public Impact

Directly benefits U.S. Army soldiers by ensuring the continued functionality and improvement of the Land Warrior system. Provides critical logistics and engineering services that support soldier modernization and operational readiness. Geographic impact is primarily within the U.S. Army's operational theaters and supporting infrastructure. Workforce implications include specialized engineering and logistics personnel employed by General Dynamics Mission Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee structure requires stringent oversight to control costs.
Lack of transparency in the sole-source justification process.

Positive Signals

Ensures continuity of essential engineering and logistics support for a critical soldier system.
Leverages specialized expertise of a known contractor with experience in the Land Warrior system.
Supports ongoing modernization efforts for U.S. Army personnel.

Sector Analysis

The defense engineering services sector is characterized by high barriers to entry, specialized technical expertise, and long-term relationships between contractors and government agencies. This contract falls within the broader category of defense logistics and systems integration, a market segment critical for maintaining and upgrading military hardware. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of soldier modernization systems, but overall U.S. defense spending on engineering and technical services runs into billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting opportunities for small businesses. 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 support not covered by the prime contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are embedded within the CPFF structure, requiring detailed cost reporting and justification. Transparency is limited due to the sole-source nature, but contract modifications and performance reviews would be subject to internal DoD oversight and potentially Inspector General reviews if performance issues or fraud are suspected.

Related Government Programs

Land Warrior System
Soldier Modernization Programs
Defense Logistics Support Contracts
Engineering Services for Military Systems

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Potential for vendor lock-in
Limited transparency in procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.6 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. LOGISTICS AND ENGINEERING SUPPORT FOR EXISTING LAND WARRIOR SYSTEMS.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $44.6 million.

What is the period of performance?

Start: 2009-09-25. End: 2012-09-20.

What is the specific justification for awarding this contract on a sole-source basis to General Dynamics Mission Systems?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For the Land Warrior system, this could be due to proprietary technology, unique expertise developed over years of working with the system, or a lack of viable alternatives that meet the stringent requirements. The specific justification would be documented in a Justification and Approval (J&A) document, which outlines the rationale and demonstrates that competition is not practicable or not in the government's best interest. Without access to this specific J&A, the precise reasons remain speculative, but often relate to the complexity and specialized nature of integrated soldier systems.

How does the cost-plus-fixed-fee (CPFF) pricing structure compare to other contract types for similar engineering services?

The Cost-Plus-Fixed-Fee (CPFF) structure is common for research, development, and complex services where the scope of work is not fully defined at the outset, or where innovation is a key objective. It reimburses the contractor for allowable costs plus a fixed fee, representing profit. Compared to fixed-price contracts, CPFF generally carries higher risk for the government regarding cost control, as the contractor is incentivized to incur costs to achieve the fixed fee. However, it offers flexibility. Fixed-price incentive fee (FPIF) or firm-fixed-price (FFP) contracts, if feasible, could offer better cost certainty but might stifle innovation or require a more rigidly defined scope, which may not be suitable for evolving soldier systems.

What are the key performance indicators (KPIs) used to assess the performance of General Dynamics Mission Systems under this contract?

Key Performance Indicators (KPIs) for a contract like this would likely focus on technical performance, schedule adherence, and cost management. Technical KPIs might include system reliability metrics, successful integration of upgrades, and the effectiveness of engineering solutions provided. Schedule KPIs would track the timely completion of milestones and deliverables. Cost KPIs would involve monitoring actual costs against the estimated cost base, ensuring adherence to the contract budget, and efficient use of resources. Performance would also be assessed through contractor reporting, government acceptance of deliverables, and potentially user feedback from soldiers utilizing the Land Warrior system.

What is the historical spending trend for logistics and engineering support of the Land Warrior system prior to this contract?

Historical spending data for the Land Warrior system prior to this specific $44.6 million contract would provide crucial context. Analyzing previous contracts for similar support services would reveal trends in cost, duration, and contractor performance. If spending has been consistently high or increasing, it might indicate evolving system requirements or potential inefficiencies. Conversely, stable or decreasing costs could suggest effective program management and contractor performance. Without access to historical contract databases or specific program budget documents, a precise historical spending trend cannot be determined, but it is a critical area for further analysis to understand the long-term investment in this system.

What are the potential risks associated with relying on a single contractor for critical soldier system support?

Relying on a single contractor, as in this sole-source award, presents several risks. Firstly, there's a risk of vendor lock-in, where the government becomes dependent on the contractor's technology, expertise, and pricing, making it difficult and costly to switch providers. Secondly, the lack of competition can reduce the incentive for the contractor to innovate or offer competitive pricing, potentially leading to higher costs and slower technological advancement. Thirdly, if the contractor experiences financial difficulties, operational issues, or decides to exit the market, it could severely disrupt the support for a critical military system, impacting soldier readiness. Robust contract management and contingency planning are essential 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

Solicitation ID: W91CRB09R0088

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

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: $49,912,218

Exercised Options: $49,865,814

Current Obligation: $44,570,030

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline