DoD's $1.2B contract with General Dynamics for computer peripherals saw 3,943 days of performance

Contract Overview

Contract Amount: $1,236,174,826 ($1.2B)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2002-04-19

End Date: 2013-02-03

Contract Duration: 3,943 days

Daily Burn Rate: $313.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $1.24 billion to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: Key points: 1. The contract's extended duration suggests a long-term need for the specified computer peripherals. 2. Performance spanned over a decade, indicating a stable, albeit lengthy, relationship with the contractor. 3. The cost-plus award fee structure incentivizes performance but requires careful monitoring of costs. 4. With full and open competition, the initial award likely secured competitive pricing. 5. The absence of small business set-asides means opportunities for smaller firms may have been limited. 6. The contract's value and duration place it as a significant procurement within its category.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the peripherals procured and their market evolution over the 11-year performance period. The cost-plus award fee (CPAF) structure, while allowing for flexibility, can sometimes lead to higher costs if not managed rigorously. Comparing it to similar long-term, high-value IT peripheral contracts would be necessary for a more precise value assessment. The significant duration suggests a potentially good value if the technology remained relevant and effective throughout.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to drive down prices and ensure fair market value. The number of bidders and the specific evaluation criteria would provide further insight into the strength of the competition. A robust competition at the outset is a positive sign for price discovery.

Taxpayer Impact: Taxpayers likely benefited from competitive pricing achieved through the full and open solicitation process, potentially leading to cost savings compared to sole-source or limited competition awards.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential computer peripherals. Services delivered include the provision and potential maintenance of specialized computer equipment. The contract's performance was primarily based in Arizona, indicating a geographic focus. The workforce implications are likely related to manufacturing, logistics, and technical support roles associated with the peripherals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can lead to cost overruns if not managed effectively.
The extended performance period (over 10 years) raises questions about technology obsolescence.
Lack of small business participation could limit broader economic impact and innovation.

Positive Signals

Awarded under full and open competition, suggesting a competitive initial pricing.
Long performance duration indicates a sustained need and potentially reliable contractor performance.
The contract was managed by the Defense Contract Management Agency, implying established oversight.

Sector Analysis

This contract falls within the broader Information Technology and Defense sectors, specifically related to computer peripheral manufacturing and supply. The market for such equipment is vast and constantly evolving. Given the significant dollar value and long performance period, this contract represents a substantial investment in maintaining the operational capabilities of the Department of Defense. Comparable spending benchmarks would involve analyzing other large-scale procurements of IT hardware for military applications.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was likely aimed at large-scale suppliers capable of meeting the extensive requirements. Consequently, opportunities for small businesses to directly participate as prime contractors were limited. However, there might have been indirect opportunities through subcontracting, though the extent of this is not detailed in the provided data.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for overseeing contract performance and ensuring compliance. The Cost Plus Award Fee (CPAF) structure implies performance metrics and potential award incentives, subject to oversight. Transparency would be enhanced by public reporting on performance reviews and cost audits. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Procurement
Defense Logistics Agency Contracts
Computer Hardware Manufacturing Contracts
Cost-Plus Award Fee Contracts
Long-Term Government Contracts

Risk Flags

Long contract duration may indicate potential for technology obsolescence.
Cost-plus award fee structure requires robust oversight to manage costs effectively.
Lack of small business set-aside limits direct participation opportunities for smaller enterprises.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.24 billion to GENERAL DYNAMICS MISSION SYSTEMS, INC.. See the official description on USAspending.

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 $1.24 billion.

What is the period of performance?

Start: 2002-04-19. End: 2013-02-03.

What specific types of computer peripherals were procured under this contract, and how did their technology evolve over the contract's lifespan?

The provided data classifies the contract under NAICS code 334119, 'Other Computer Peripheral Equipment Manufacturing.' This broad category could encompass a wide range of items such as specialized printers, scanners, data storage devices, or input/output peripherals not covered by more specific codes. Given the contract's performance period from 2002 to 2013, the technology landscape for computer peripherals underwent significant changes, including advancements in speed, storage capacity, connectivity (e.g., USB adoption), and form factors. Without more granular details on the specific items, it's difficult to assess how well the procured equipment kept pace with technological advancements or if it became obsolete before the contract's end. The CPAF structure might have allowed for adaptation, but the core value proposition would depend on the initial and ongoing relevance of the peripherals.

How did the Cost Plus Award Fee (CPAF) structure influence the final cost and contractor performance compared to other contract types?

The CPAF structure incentivizes the contractor (General Dynamics Mission Systems, Inc.) to meet or exceed performance objectives while allowing the government to control costs. The 'cost plus' element means the government reimburses allowable costs plus a fixed fee, while the 'award fee' provides additional compensation based on performance evaluations. This structure can be beneficial for complex projects where performance standards are high and difficult to define precisely upfront. However, it requires robust government oversight to ensure costs are reasonable and that award fees are justified. Compared to fixed-price contracts, CPAF might lead to higher final costs if performance is exceptional, but it offers more flexibility and potential for higher quality outcomes. Conversely, it carries more cost risk for the government than fixed-price contracts. The effectiveness hinges on clear performance metrics and objective evaluations by the Defense Contract Management Agency.

What was the rationale for such a long performance period (3,943 days) for a computer peripherals contract?

A performance period spanning over 11 years (3,943 days) for computer peripherals suggests a strategic, long-term acquisition strategy rather than routine purchasing. This could be due to several factors: 1) The peripherals might have been highly specialized, custom-developed systems integral to specific defense platforms or operations, requiring a long integration and operational lifecycle. 2) The contract might have included options for sustainment, maintenance, upgrades, and support over an extended period, reflecting the total ownership cost. 3) It could represent a framework agreement for ongoing supply and service, allowing the Department of Defense (DoD) to procure needed items incrementally over time under pre-negotiated terms. 4) The lengthy period might also reflect the slow pace of technology refresh cycles in certain defense applications compared to the commercial sector. The initial 'full and open competition' likely aimed to secure a capable provider for this extended duration.

How does the $1.2 billion total value compare to other similar long-term IT hardware contracts within the DoD?

The total value of approximately $1.24 billion for this contract is substantial, placing it among significant IT hardware procurements. To benchmark it effectively against similar long-term contracts, one would need to analyze the average value and duration of other DoD contracts for computer peripherals, network equipment, or related hardware systems awarded over comparable periods (e.g., 2002-2013). Factors like the specific nature of the equipment (e.g., ruggedized, classified systems vs. standard commercial off-the-shelf), the number of units procured, and the scope of services (e.g., installation, maintenance, training) would influence comparisons. Generally, large-scale, multi-year procurements for critical defense infrastructure often reach into the hundreds of millions or billions of dollars, making this contract significant but potentially not an outlier within the context of major defense IT spending.

What oversight mechanisms were in place to manage this contract, and were there any significant issues reported during its performance?

The contract was managed by the Defense Contract Management Agency (DCMA), indicating standard government oversight procedures were applied. As a Cost Plus Award Fee (CPAF) contract, oversight would focus on monitoring allowable costs, evaluating performance against defined criteria, and determining the appropriate award fee. Specific oversight mechanisms would include regular progress reports from the contractor, site visits, audits of financial records, and performance reviews. The provided data does not detail any specific issues or disputes that arose during the contract's performance. However, the sheer length of the contract and its significant value imply a continuous need for diligent oversight to ensure compliance, cost control, and effective delivery of required peripherals.

Given the contract's duration and value, what was the likely impact on General Dynamics Mission Systems, Inc.'s business and the broader defense IT market?

For General Dynamics Mission Systems, Inc., a contract of this magnitude and duration would represent a significant and stable revenue stream, contributing substantially to their business volume in the defense IT sector. It likely solidified their position as a key supplier to the Department of Defense for computer peripherals and related services. Such a long-term commitment could also influence their strategic planning, R&D investments, and workforce allocation. In the broader defense IT market, a large contract awarded through full and open competition signals the government's intent to leverage established prime contractors for critical needs. It could also influence competitive dynamics, potentially making it harder for smaller or less established firms to penetrate this specific market segment, while reinforcing the capabilities of major defense contractors.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Other Computer Peripheral Equipment Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

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

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline