DoD's $133M contract for digital systems engineering services awarded to Digital System Resources, Inc
Contract Overview
Contract Amount: $132,989,164 ($133.0M)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2003-12-22
End Date: 2018-12-17
Contract Duration: 5,474 days
Daily Burn Rate: $24.3K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: 200412!V00100!1700!BY006 !NAVSEA WASHINGTON DC !N0002404C6205 !A!N! !N! ! !20031222!20050810!153245857!116187758!001381284!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000027467361!N!N!000036623150!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !541330!E! !1! ! ! ! ! !99990909!B! ! !A! !A!U!V!1!001!B! !A!N!Z! ! !N!B!N!N! ! !Z! !A!A!00 !D!B!N! ! ! !Y! !N00024!0001! !
Place of Performance
Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $133.0 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200412!V00100!1700!BY006 !NAVSEA WASHINGTON DC !N0002404C6205 !A!N! !N! ! !20031222!20050810!153245857!116187758!001381284!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIR… Key points: 1. Contract awarded for engineering and manufacturing development of electronics and communication equipment. 2. Significant duration of over 15 years suggests a long-term need for these services. 3. The contract's value of over $133 million indicates a substantial investment in advanced technological capabilities. 4. Awarded under full and open competition, suggesting a robust bidding process. 5. The 'Cost Plus Incentive Fee' pricing structure aims to align contractor performance with government objectives. 6. The contractor, Digital System Resources, Inc., is based in Fairfax, Virginia.
Value Assessment
Rating: good
The contract value of $132,989,163.57 for engineering and manufacturing development of electronics and communication equipment appears reasonable given the extensive 15-year performance period. Benchmarking against similar long-term, complex R&D contracts within the Department of Defense is necessary for a definitive value assessment. However, the 'Cost Plus Incentive Fee' (CPIF) structure suggests an effort to control costs by incentivizing contractor efficiency, which is a positive sign for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'full and open competition after exclusion of sources.' While the 'exclusion of sources' phrasing might initially seem restrictive, it typically refers to specific circumstances where certain sources are excluded from consideration based on predefined criteria, but the overall competition remains open to all eligible entities. The fact that it's categorized as 'full and open' implies that multiple bidders were likely considered, leading to a competitive price discovery process.
Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down costs and ensuring the government receives the best possible value for its investment. This approach helps prevent inflated pricing that can occur with sole-source or limited competition contracts.
Public Impact
The primary beneficiaries are the Department of Defense, specifically the Navy, which gains advanced digital systems and communication equipment. Services delivered include engineering, manufacturing development, and support for electronics and communication systems. The geographic impact is primarily within Virginia, where the contractor is located, potentially creating local employment and economic activity. Workforce implications include specialized engineering and technical roles required for the development and manufacturing of advanced electronic systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The long duration of the contract (over 15 years) could introduce risks related to technological obsolescence and changing requirements.
- CPIF contracts can sometimes lead to cost overruns if not managed meticulously, despite the incentive structure.
- The 'exclusion of sources' clause, even within a full and open competition, warrants further investigation to understand its specific implications.
Positive Signals
- Awarded through full and open competition, indicating a competitive marketplace for these services.
- The use of an incentive fee structure suggests a focus on performance and cost control.
- The contract supports critical defense capabilities in electronics and communication.
Sector Analysis
This contract falls within the broader Defense Industrial Base sector, specifically focusing on the development and manufacturing of advanced electronics and communication equipment. The market for such specialized engineering services is characterized by high barriers to entry due to technical expertise and security requirements. Comparable spending benchmarks would involve analyzing other large-scale R&D and manufacturing contracts for similar defense systems, which often run into hundreds of millions or billions of dollars over their lifecycle.
Small Business Impact
There is no indication from the provided data that this contract included a small business set-aside. The prime contractor, Digital System Resources, Inc., is a significant entity. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in this summary. The overall impact on the small business ecosystem would depend on the extent to which the prime contractor engages with small business suppliers and subcontractors for specialized components or services.
Oversight & Accountability
Oversight for this Department of Defense contract would typically be managed by the contracting officer and program management office within the Department of the Navy. Accountability measures are embedded in the 'Cost Plus Incentive Fee' structure, which links contractor profit to performance metrics. Transparency is generally facilitated through contract award databases, though detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Electronics Manufacturing
- Communication Systems Development
- Research, Development, Test, and Evaluation (RDT&E)
- Naval Systems Engineering
- Information Technology Infrastructure
Risk Flags
- Long contract duration may lead to technological obsolescence.
- CPIF contracts require careful monitoring to prevent cost overruns.
- Need to verify the justification for 'exclusion of sources' in competition.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, manufacturing-development, electronics, communication-equipment, cost-plus-incentive-fee, full-and-open-competition, virginia, large-contract, rdte
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $133.0 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200412!V00100!1700!BY006 !NAVSEA WASHINGTON DC !N0002404C6205 !A!N! !N! ! !20031222!20050810!153245857!116187758!001381284!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000027467361!N!N!000036623150!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !541330!E! !1! ! ! ! ! !999
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $133.0 million.
What is the period of performance?
Start: 2003-12-22. End: 2018-12-17.
What is the track record of Digital System Resources, Inc. with government contracts, particularly within the Department of Defense?
Digital System Resources, Inc. has a history of performing government contracts. While specific details on their entire contract portfolio are not provided here, their selection for this significant $133 million contract with the Department of the Navy suggests a demonstrated capability and a positive performance history relevant to defense engineering and manufacturing. Further analysis would involve reviewing their past performance evaluations, any contract disputes, and the types of services they have previously provided to government agencies to fully assess their track record.
How does the per-unit cost or value proposition of this contract compare to similar defense electronics development contracts?
A direct per-unit cost comparison is challenging without knowing the specific units or deliverables. However, the overall contract value of $133 million spread over a 15-year period for complex R&D and manufacturing development indicates a substantial investment. To benchmark its value, one would need to compare it against other contracts for similar advanced electronic and communication systems development within the DoD. Factors like technological complexity, innovation required, and the specific performance metrics tied to the incentive fee would influence this comparison. The 'full and open competition' aspect suggests that the pricing was vetted against market alternatives.
What are the primary risks associated with a 'Cost Plus Incentive Fee' (CPIF) contract of this magnitude and duration?
The primary risks with a CPIF contract of this scale and duration include potential cost overruns if the incentive targets are not well-defined or achievable, leading to increased government expenditure beyond initial projections. There's also a risk that the contractor might prioritize achieving the incentive metrics over other critical, non-incentivized aspects of performance or quality. For a long-duration contract, technological obsolescence is a significant risk; the system developed might become outdated before the contract concludes. Effective oversight and clear, measurable performance metrics are crucial to mitigate these risks.
How effective is the 'full and open competition after exclusion of sources' approach in ensuring optimal value for taxpayers?
The 'full and open competition after exclusion of sources' approach aims to balance broad market access with specific requirements. 'Full and open' ensures a wide range of potential bidders can participate, fostering competition that typically drives down prices and improves quality. The 'exclusion of sources' element suggests that certain entities might be disqualified based on specific criteria (e.g., security, past performance, or specific technical capabilities). If these exclusions are justified and narrowly tailored, this approach can ensure that only qualified and capable bidders compete, potentially leading to better technical solutions and value, while still leveraging competitive pressures. However, overly broad exclusions could limit competition and negatively impact value.
What are the historical spending patterns for similar engineering and manufacturing development contracts within the Department of the Navy?
Historical spending patterns for similar contracts within the Department of the Navy often show significant investments in R&D and manufacturing for advanced systems, particularly in electronics and communication. Contracts in this domain frequently span multiple years and can range from tens to hundreds of millions of dollars, depending on the complexity and scope. The Navy consistently funds programs aimed at maintaining technological superiority, which includes substantial outlays for developing and procuring cutting-edge equipment. Analyzing past budgets and contract awards for programs like shipbuilding, aviation systems, and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) would provide context for this $133 million award.
What are the implications of the contract's extended duration (over 15 years) on technological relevance and contractor commitment?
An extended duration of over 15 years for a technology-focused contract presents dual implications. On one hand, it allows for deep development, integration, and refinement of complex systems, potentially leading to highly optimized solutions. It also provides the contractor with long-term stability and commitment, encouraging investment in specialized resources. However, the primary risk is technological obsolescence; the pace of innovation in electronics and communication is rapid, and systems developed early in the contract could be outdated by its end. This necessitates robust contract management, including provisions for technology refresh, adaptation, and potentially re-competition or modification to ensure continued relevance and effectiveness throughout the contract's life.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 12450 FAIR LAKES CIR STE 800, FAIRFAX, VA, 22033
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 ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2003-12-22
Current End Date: 2018-12-17
Potential End Date: 2018-12-17 00:00:00
Last Modified: 2019-01-25
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