DoD Awards $22.7M Contract for Communications Equipment to General Dynamics, Facing Potential Overpricing Concerns
Contract Overview
Contract Amount: $22,705,309 ($22.7M)
Contractor: General Dynamics C4 Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2003-03-31
End Date: 2013-03-31
Contract Duration: 3,653 days
Daily Burn Rate: $6.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200306!003330!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0703DD205 !A!N! !N!0001 !20030331!20130331!046863929!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8201 E MCDOWELL ROAD !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARICOPA !ARIZONA !+000006999841!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!J!2!001!B! !A!Y!Z! ! !N!C!N! ! ! !B!B!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257, UNITED STATES OF AMERICA
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $22.7 million to GENERAL DYNAMICS C4 SYSTEMS, INC. for work described as: 200306!003330!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0703DD205 !A!N! !N!0001 !20030331!20130331!046863929!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8201 E MCDOWELL ROAD !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARIC… Key points: 1. The contract, awarded to General Dynamics, is for miscellaneous communication equipment. 2. Competition was full and open, but the long duration and fixed-price nature raise questions about price discovery. 3. A significant risk exists regarding potential overpricing due to the extended contract period and lack of clear benchmarks. 4. The sector is Defense, specifically electronics and communication equipment manufacturing.
Value Assessment
Rating: questionable
The contract value of $22.7 million over 10 years for communication equipment is difficult to benchmark without specific unit details. The lack of a clear per-unit cost makes it challenging to assess if the pricing is competitive against similar, shorter-term contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the 10-year duration and firm fixed-price structure may limit the government's ability to benefit from market fluctuations or technological advancements over time.
Taxpayer Impact: The long-term nature of the contract, coupled with potential overpricing, could lead to inefficient use of taxpayer funds if not closely monitored for value.
Public Impact
Taxpayers may be overpaying for communication equipment due to the extended contract duration and lack of granular cost data. The Department of Defense relies on this equipment, making its availability critical, but cost-effectiveness is a concern. General Dynamics, a major defense contractor, is the sole awardee, highlighting potential market concentration in this niche.
Waste & Efficiency Indicators
Waste Risk Score: 62 / 10
Warning Flags
- Extended contract duration (10 years)
- Lack of per-unit cost transparency
- Firm Fixed Price on a long-term contract
Positive Signals
- Full and open competition awarded
- Established contractor with relevant experience
Sector Analysis
This contract falls within the Defense sector, specifically for miscellaneous communication equipment. Spending in this area is critical for military operations, but often involves complex, high-value systems where cost control is paramount.
Small Business Impact
The data indicates this contract was awarded to a large business (General Dynamics). There is no explicit indication of small business participation or subcontracting requirements in the provided information.
Oversight & Accountability
The contract's long duration necessitates robust oversight to ensure performance and value. The lack of detailed cost breakdowns makes it harder for oversight bodies to track potential inefficiencies or overcharges effectively.
Related Government Programs
- Other Communications Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for overpricing due to long duration and fixed price.
- Lack of transparency in per-unit costs.
- Extended contract period may not reflect evolving technology or market prices.
- Sole award to a large business may limit broader economic participation.
Tags
other-communications-equipment-manufactu, department-of-defense, az, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.7 million to GENERAL DYNAMICS C4 SYSTEMS, INC.. 200306!003330!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0703DD205 !A!N! !N!0001 !20030331!20130331!046863929!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8201 E MCDOWELL ROAD !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARICOPA !ARIZONA !+000006999841!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !5!B!S! ! ! !99990909!B
Who is the contractor on this award?
The obligated recipient is GENERAL DYNAMICS C4 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 $22.7 million.
What is the period of performance?
Start: 2003-03-31. End: 2013-03-31.
What is the average per-unit cost for similar communication equipment procured under shorter-term contracts?
Determining the average per-unit cost for similar communication equipment under shorter-term contracts is crucial for assessing value. Without this benchmark, it's difficult to ascertain if the $22.7 million over 10 years represents a fair market price or if potential overpayment is occurring due to the extended duration and fixed-price nature.
What mechanisms are in place to mitigate the risk of overpricing given the 10-year contract term?
Given the 10-year contract term, robust oversight and potential price adjustment clauses are critical to mitigate overpricing risks. The government should actively monitor market trends, technological advancements, and contractor performance to ensure the fixed price remains reasonable throughout the contract's life, potentially through periodic reviews or renegotiations.
How does the lack of specific unit cost data impact the effectiveness of competition and oversight?
The absence of specific unit cost data significantly hampers the effectiveness of both competition and oversight. For competition, it prevents potential bidders from accurately pricing their offerings against specific requirements. For oversight, it makes it exceedingly difficult to verify that the government is receiving fair value for its money, increasing the risk of inefficient spending.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 8201 E MCDOWELL RD, SCOTTSDALE, AZ, 85257
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: DAAB0703DD205
IDV Type: IDC
Timeline
Start Date: 2003-03-31
Current End Date: 2013-03-31
Potential End Date: 2013-03-31 00:00:00
Last Modified: 2015-05-28
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