DoD's $455.7M engineering services contract to General Dynamics IT shows strong competition and long-term performance

Contract Overview

Contract Amount: $455,702,635 ($455.7M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2012-12-31

Contract Duration: 1,918 days

Daily Burn Rate: $237.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ATLANTIC RANGES ENGINEERING AND TECHNICAL SUPPORT SERVICES

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $455.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: ATLANTIC RANGES ENGINEERING AND TECHNICAL SUPPORT SERVICES Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Long contract duration (5 years) suggests a need for sustained engineering support. 3. Cost-plus-fixed-fee pricing structure may incentivize contractor efficiency. 4. Significant contract value points to a critical role in defense operations. 5. No small business set-aside indicates a focus on large, capable prime contractors. 6. High number of bids (though not explicitly stated, implied by 'full and open') likely drove competitive pricing.

Value Assessment

Rating: good

The contract's value of over $455 million over five years represents substantial investment in engineering services. Benchmarking this against similar large-scale engineering support contracts for the Department of Defense is crucial. The cost-plus-fixed-fee (CPFF) structure, while common, requires careful oversight to ensure costs remain reasonable and the fixed fee provides adequate profit without excessive risk to the government. Without specific per-unit cost data, a direct value-for-money assessment is challenging, but the competitive award suggests a reasonable price was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. This typically leads to a wider pool of potential contractors and encourages competitive pricing. The fact that it was competed broadly suggests the government sought the best technical solution and price available in the market for these specialized engineering services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value for its investment.

Public Impact

Provides critical engineering and technical support services to the Department of the Navy. Supports advanced defense capabilities and readiness for naval operations. Likely impacts a specialized engineering workforce, potentially in Maryland where the contract is managed. Ensures the continued development and maintenance of complex military systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed diligently.
Long-term contracts may reduce flexibility to adapt to changing technological needs.
Reliance on a single large contractor could pose risks if performance falters.

Positive Signals

Awarded through full and open competition, suggesting strong market engagement.
General Dynamics Information Technology is a well-established defense contractor with a track record.
The contract's duration implies a stable and predictable need for these services.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for design, development, testing, and sustainment of complex military platforms and systems. General Dynamics Information Technology is a major player in this space, competing with other large defense contractors for significant government contracts. This specific award represents a substantial portion of spending within this specialized engineering niche.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This is common for large, complex service contracts where prime contractors possess specialized capabilities and infrastructure. While there's no direct set-aside, General Dynamics Information Technology may engage small businesses as subcontractors to fulfill specific requirements, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to monitor expenditures and ensure compliance with the contract terms. Transparency is typically maintained through regular reporting requirements from the contractor. Inspector General involvement would be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services
Naval Sea Systems Command (NAVSEA) Contracts
Information Technology Support Services
Defense Research and Development

Risk Flags

Long-term contract duration may limit flexibility for technological adaptation.
Cost-plus-fixed-fee structure requires diligent cost oversight.
No small business set-aside noted, potential impact on SMB participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $455.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. ATLANTIC RANGES ENGINEERING AND TECHNICAL SUPPORT SERVICES

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $455.7 million.

What is the period of performance?

Start: 2007-10-01. End: 2012-12-31.

What is the historical spending trend for engineering services by the Department of the Navy?

The Department of the Navy consistently allocates significant funding towards engineering services, essential for maintaining its technological superiority and operational readiness. Historical data shows a steady demand, often fluctuating with defense budgets and specific platform modernization or sustainment needs. For instance, spending in this category can increase during periods of major shipbuilding programs or upgrades to existing naval assets. While specific year-over-year figures for the Navy's engineering services procurement vary, the overall trend indicates a sustained and substantial investment, reflecting the complexity and critical nature of naval systems. This $455.7 million contract with General Dynamics IT represents a notable allocation within this broader spending pattern, underscoring the ongoing requirement for advanced engineering expertise.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) pricing structure used for this contract is common for complex services where the scope of work may evolve or is difficult to define precisely upfront. In a CPFF contract, the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This differs from Fixed Price contracts, where the price is set regardless of actual costs, offering more cost certainty to the government but potentially higher risk for the contractor. It also differs from Cost Plus Incentive Fee (CPIF), which adjusts the fee based on performance against targets. CPFF is often chosen when the government needs flexibility and wants to incentivize contractor effort, but it requires robust government oversight to manage costs effectively and prevent potential overruns. Compared to purely fixed-price arrangements, CPFF can be more adaptable but may yield higher final costs if not managed diligently.

What is General Dynamics Information Technology's track record with similar large-scale defense engineering contracts?

General Dynamics Information Technology (GDIT), a business unit of General Dynamics, has a substantial and well-documented track record in providing large-scale IT and engineering services to the U.S. federal government, particularly the Department of Defense. They have historically secured and successfully executed numerous complex contracts involving systems engineering, integration, modernization, and sustainment across various military branches. Their experience spans areas like C4ISR systems, enterprise IT infrastructure, cybersecurity, and specialized technical support. GDIT's ability to win and perform on contracts of this magnitude, such as this $455.7 million award from the Department of the Navy, suggests a strong capability in managing complex projects, large workforces, and sophisticated technical requirements. Their extensive portfolio indicates a deep understanding of defense needs and a proven capacity to deliver.

What are the potential risks associated with a 5-year contract duration for engineering services?

A 5-year contract duration for engineering services, while providing stability, carries several potential risks. Firstly, technological advancements can outpace the contract's scope, potentially rendering some services or systems obsolete before the contract ends, leading to inefficiencies or the need for costly modifications. Secondly, market conditions and contractor performance can change over such a long period; a contractor that starts strong might falter, or the competitive landscape could shift, offering better value elsewhere. Thirdly, long-term reliance on a single contractor can reduce government flexibility to pivot to new solutions or vendors if requirements change significantly. Finally, maintaining consistent oversight and ensuring continued innovation from the contractor over five years requires sustained effort and resources from the government side to prevent complacency and ensure ongoing value.

How does the geographic location (Maryland) influence the contract's execution and workforce?

The contract's designation of Maryland (MD) as its State suggests a significant operational presence or management hub within that region. Maryland is a major hub for federal contracting, particularly defense and intelligence, with a large concentration of skilled engineers, IT professionals, and technical experts. This geographic focus likely means that General Dynamics Information Technology draws heavily from the local talent pool for personnel. It also implies proximity to key Department of the Navy commands and facilities, potentially facilitating collaboration and oversight. The presence of a large contract like this in Maryland can stimulate the local economy through job creation and support for ancillary businesses. However, it also concentrates a significant portion of the workforce and associated economic activity in one area, which could present risks if the contract were to be significantly reduced or terminated.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002406R3659

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Csra LLC (UEI: 079735371)

Address: 1201 M ST SE 400, WASHINGTON, DC, 20003

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $462,714,593

Exercised Options: $462,714,593

Current Obligation: $455,702,635

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4030

IDV Type: IDC

Timeline