DoD's $766M contract for ballistic missile defense systems awarded to Computer Sciences Corporation shows concerning value and limited competition

Contract Overview

Contract Amount: $766,015,483 ($766.0M)

Contractor: General Dynamics Information Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2002-10-21

End Date: 2014-06-30

Contract Duration: 4,270 days

Daily Burn Rate: $179.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200301!000025!9700!ZD60 !MISSILE DEFENSE AGENCY !HQ000603C0003 !A!N! !N! !20021021!20041017!043991108!043991108!009581091!N!COMPUTER SCIENCES CORPORATION !3160 FAIRVIEW PARK DRIVE !FALLS CHURCH !VA!22042!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !+000007000000!N!N!000272110374!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !4CAA!BALLISTIC MISSILE DEFENSE SYS !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!U!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $766.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC. for work described as: 200301!000025!9700!ZD60 !MISSILE DEFENSE AGENCY !HQ000603C0003 !A!N! !N! !20021021!20041017!043991108!043991108!009581091!N!COMPUTER SCIENCES CORPORATION !3160 FAIRVIEW PARK DRIVE !FALLS CHURCH !VA!22042!03000!013!51!ARLINGTON !ARLIN… Key points: 1. The contract's value of over $766 million raises questions about cost-effectiveness given the limited competition. 2. Awarded as 'Not Competed', this suggests a lack of market exploration and potential for inflated pricing. 3. The long duration of the contract (over 12 years) warrants scrutiny for ongoing value and performance. 4. The 'Cost Plus Fixed Fee' pricing structure can incentivize cost overruns. 5. The absence of small business participation is noted. 6. The contract falls under 'Engineering Services' within the Defense sector, a critical but often high-cost area.

Value Assessment

Rating: concerning

The total award amount of $766,015,482.53 for engineering services related to ballistic missile defense systems is substantial. Without comparable contracts or detailed performance metrics, it's difficult to definitively benchmark value. However, the 'Not Competed' award type and 'Cost Plus Fixed Fee' pricing structure inherently raise concerns about potential overspending and lack of price discipline. The long contract duration (over 12 years) also suggests that ongoing oversight is crucial to ensure continued value for taxpayer money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'Not Competed' basis, indicating that the Missile Defense Agency did not solicit offers from multiple sources. This sole-source approach significantly limits price discovery and competitive pressure, potentially leading to higher costs for the government. The lack of a competitive bidding process means that the government did not benefit from the innovation and cost-saving measures that typically arise from a robust competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The lack of transparency in the pricing negotiation process for sole-source contracts makes it harder to ensure the best possible price was achieved.

Public Impact

The primary beneficiary is the Missile Defense Agency, receiving critical engineering services for national defense systems. The contract supports the development and sustainment of ballistic missile defense capabilities. The geographic impact is primarily within Virginia, where Computer Sciences Corporation is headquartered. The contract likely supports a specialized workforce in engineering and defense technology.

Waste & Efficiency Indicators

Waste Risk Score: 30 / 10

Warning Flags

Sole-source award limits competitive pressure and price discovery.
Cost Plus Fixed Fee contract type can incentivize cost overruns.
Long contract duration (over 12 years) requires sustained oversight to ensure value.
Lack of small business participation noted.

Positive Signals

Supports critical national defense capabilities.
Awarded to a known contractor (Computer Sciences Corporation) with a significant federal presence.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research, Development, Test, and Evaluation (RDTE) for advanced defense technologies. The market for missile defense systems is highly specialized, dominated by a few large prime contractors. Spending in this area is driven by national security priorities and technological advancements. Comparable spending benchmarks are difficult to establish due to the unique nature of missile defense, but overall DoD R&D spending is in the tens of billions annually.

Small Business Impact

There is no indication of small business set-aside or subcontracting requirements in the provided data. The absence of small business involvement in such a large contract suggests missed opportunities to leverage the innovation and agility of smaller firms within the defense industrial base. This could also limit the broader economic impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Missile Defense Agency and potentially the Department of Defense's Inspector General. The 'Cost Plus Fixed Fee' structure necessitates rigorous financial oversight to monitor expenditures and prevent cost overruns. Transparency is limited by the sole-source nature of the award, making public scrutiny of the pricing and performance more challenging.

Related Government Programs

Missile Defense Systems
Ballistic Missile Defense Program
Advanced Technology Development
Engineering Services Contracts
Department of Defense Research and Development

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $766.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC.. 200301!000025!9700!ZD60 !MISSILE DEFENSE AGENCY !HQ000603C0003 !A!N! !N! !20021021!20041017!043991108!043991108!009581091!N!COMPUTER SCIENCES CORPORATION !3160 FAIRVIEW PARK DRIVE !FALLS CHURCH !VA!22042!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !+000007000000!N!N!000272110374!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !4CAA!BALLISTIC MISSILE DEFENSE SYS !541330!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY 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 $766.0 million.

What is the period of performance?

Start: 2002-10-21. End: 2014-06-30.

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

The provided data indicates the contract was 'Not Competed' (CT: NOT COMPETED). Specific justifications for sole-source awards typically include factors such as urgency of need, unique capabilities of a single source, or situations where competition is deemed impractical or not in the government's best interest. Without further documentation from the Missile Defense Agency, the precise rationale remains unclear. However, sole-source awards are generally subject to strict justification requirements to ensure fair and open competition principles are upheld to the greatest extent possible.

How does the 'Cost Plus Fixed Fee' (CPFF) pricing structure impact cost control for this contract?

The Cost Plus Fixed Fee (CPFF) pricing structure means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the contractor has less incentive to control costs compared to fixed-price contracts, as cost overruns directly increase the total contract value (reimbursed costs plus the fixed fee). This structure is often used for research and development or services where the scope is not well-defined, but it places a significant burden on the government to meticulously audit costs and ensure they are reasonable and allocable to the contract. Robust oversight is critical to mitigate the risk of inflated costs.

What is the historical spending trend for similar ballistic missile defense engineering services within the DoD?

Historical spending on ballistic missile defense (BMD) engineering services within the DoD has been substantial and generally increasing, driven by evolving threats and technological advancements. The Missile Defense Agency (MDA) is the primary entity responsible for BMD, and its budget consistently includes significant allocations for research, development, and systems engineering. While specific figures for 'engineering services' as a distinct category are hard to isolate without detailed budget breakdowns, the overall MDA budget has historically ranged in the billions of dollars annually. Contracts like this one, awarded over extended periods, represent a significant portion of that investment.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. For engineering services contracts, particularly those related to complex defense systems, KPIs typically focus on technical performance (e.g., system reliability, accuracy, integration success), schedule adherence (meeting milestones), cost control (managing expenditures within allocated budgets), and quality of deliverables (e.g., design documents, test results, analyses). Effective oversight would involve regular performance reviews against these KPIs, with potential for award fees or penalties tied to performance outcomes.

What is Computer Sciences Corporation's track record with large, sole-source defense contracts?

Computer Sciences Corporation (CSC), now part of DXC Technology, has a long history of performing large, complex contracts for the U.S. Department of Defense and other federal agencies. While specific details on their track record with sole-source awards are not provided here, CSC has been a major federal contractor for decades, often involved in IT services, systems integration, and support for defense programs. Their experience suggests a capability to manage large-scale projects, but the nature of sole-source awards means that performance and value are primarily assessed through government oversight rather than direct market competition.

Are there any known risks associated with the contractor or the technology involved in this contract?

The provided data does not highlight specific risks associated with Computer Sciences Corporation or the missile defense technology itself. However, general risks in large, sole-source defense contracts include potential cost overruns due to the CPFF structure, schedule delays in complex R&D projects, and the risk of technological obsolescence or performance shortfalls. Contractor performance issues, such as quality deficiencies or management problems, are also inherent risks. Without specific risk assessments from the contracting agency, these remain general considerations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Csra LLC (UEI: 080011988)

Address: 3170 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $271,296,169

Exercised Options: $239,469,919

Current Obligation: $766,015,483

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline