Naval Sea Systems Command awards $103.8M contract for fire control systems to Digital System Resources, Inc

Contract Overview

Contract Amount: $103,796,044 ($103.8M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-03-11

End Date: 2012-09-30

Contract Duration: 2,760 days

Daily Burn Rate: $37.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200506!047711!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5100 !A!N! !N! ! !20050311!20090930!153245857!116187758!001381284!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000027840613!N!N!000000000000!1230!FIRE CONTROL SYSTEMS, COMPLETE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !582 !CEC !334511!E! !3! ! ! ! ! !20200930!B!C! !A! !A!N!R!2!002!B! !A!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!Y! ! ! ! !1724!N00024!0001! !

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $103.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200506!047711!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5100 !A!N! !N! ! !20050311!20090930!153245857!116187758!001381284!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIR… Key points: 1. The contract's value of $103.8 million represents a significant investment in naval defense capabilities. 2. Competition dynamics for this contract are assessed to understand pricing efficiency and potential for taxpayer savings. 3. Risk indicators are evaluated to ensure successful delivery and performance of critical fire control systems. 4. Performance context is crucial for understanding the operational impact and effectiveness of the acquired systems. 5. This contract positions Digital System Resources, Inc. as a key supplier within the naval electronics sector.

Value Assessment

Rating: good

The contract value of $103.8 million for fire control systems appears reasonable when benchmarked against similar defense procurements. While specific per-unit cost data is not provided, the overall award suggests a competitive pricing environment. The Cost Plus Award Fee (CPAF) structure allows for performance incentives, potentially driving better value for the government if the contractor meets or exceeds performance targets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bidders, General Dynamics Mission Systems, Inc. and Digital System Resources, Inc., suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and can lead to more cost-effective solutions for the government.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and encouraging innovation among bidders.

Public Impact

The primary beneficiaries are the U.S. Navy, which receives advanced fire control systems essential for naval operations. Services delivered include the provision of complete fire control systems, likely encompassing hardware, software, and integration. The geographic impact is primarily within naval installations and deployed vessels, ensuring operational readiness. Workforce implications may include specialized technical roles for installation, maintenance, and support of these advanced systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance targets are not met efficiently.
Dependence on a single contractor for critical system components could pose supply chain risks.
Ensuring long-term sustainment and upgradeability of the fire control systems requires careful planning.

Positive Signals

Award under full and open competition suggests a robust selection process and potential for competitive pricing.
The Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
The contract duration of over 7 years indicates a long-term commitment and potential for stable support.

Sector Analysis

This contract falls within the broader defense electronics and communication equipment sector, specifically focusing on fire control systems. The North American Industry Classification System (NAICS) code 334511 covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. The market for such specialized defense systems is characterized by high technological barriers to entry and significant government investment, with major defense contractors often dominating.

Small Business Impact

There is no explicit indication of a small business set-aside for this contract, and the primary awardee, Digital System Resources, Inc., is not identified as a small business in this context. However, the prime contractor may engage small businesses for subcontracting opportunities related to specific components or services, contributing to the broader small business ecosystem within the defense industrial base.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which ensures compliance with contract terms and performance standards. The Naval Sea Systems Command (NAVSEA) would also maintain program-level oversight. Transparency is facilitated through contract award databases, though detailed performance metrics may be sensitive. Inspector General jurisdiction would apply in cases of fraud or significant mismanagement.

Related Government Programs

Naval Combat Systems
Defense Electronics Procurement
Weapon System Integration
Tactical Data Links
Shipboard Electronics

Risk Flags

Potential for cost overruns due to CPAF structure.
Dependence on contractor for critical system delivery.
Ensuring long-term system sustainment and upgradeability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.8 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200506!047711!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5100 !A!N! !N! ! !20050311!20090930!153245857!116187758!001381284!N!DIGITAL SYSTEM RESOURCES, INC !12450 FAIR LAKES CIRCLE, S!FAIRFAX !VA!22033!26496!600!51!FAIRFAX !FAIRFAX (CITY) !VIRGINIA !+000027840613!N!N!000000000000!1230!FIRE CONTROL SYSTEMS, COMPLETE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !582 !CEC !334511!E! !3! ! ! ! ! !202

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 $103.8 million.

What is the period of performance?

Start: 2005-03-11. End: 2012-09-30.

What is the historical spending trend for fire control systems by the Naval Sea Systems Command?

Historical spending on fire control systems by NAVSEA can be analyzed by examining contract awards over several fiscal years. Data from sources like USAspending.gov reveals that NAVSEA consistently allocates significant funds to weapon systems, including fire control. For instance, in the years leading up to and following this contract award (2005-2012), spending on similar systems often fluctuated based on modernization priorities, fleet readiness needs, and the introduction of new technologies. Analyzing trends requires looking at the total value of awarded contracts, the number of competitive versus sole-source awards, and the types of systems being procured (e.g., upgrades vs. new platforms). This specific contract, valued at over $100 million, represents a substantial single investment, suggesting a significant upgrade or procurement initiative for a particular class of naval vessels or a new system development.

How does the performance of Digital System Resources, Inc. compare to other contractors in the defense electronics sector?

Assessing the performance of Digital System Resources, Inc. (DSR) requires a review of their contract history, including on-time delivery, quality of work, and adherence to budget across previous government contracts. Publicly available data, such as contract award histories and past performance reviews (if accessible), can provide insights. DSR's ability to win a large, competitively bid contract like this one from NAVSEA suggests a level of established capability and a positive track record. Benchmarking DSR against other major defense electronics contractors involves comparing their success rates in competitive bids, the average value and duration of their contracts, and any reported instances of contract disputes or performance issues. Companies like General Dynamics, which also bid on this contract, represent significant players in the sector, making DSR's success noteworthy.

What are the key risks associated with the 'Cost Plus Award Fee' contract type for this fire control system?

The 'Cost Plus Award Fee' (CPAF) contract type introduces specific risks for the government. While it allows for flexibility and incentivizes performance, there's a risk of cost growth if the contractor's incurred costs exceed initial estimates, even with the award fee mechanism. The 'award fee' portion is determined by the government's subjective evaluation of the contractor's performance against pre-defined criteria. This subjectivity can lead to disputes if the contractor disagrees with the assessment. Furthermore, contractors might focus on achieving award fee targets, potentially at the expense of other critical but less quantifiable aspects of performance or long-term system viability. Effective oversight and clearly defined, objective performance criteria are crucial to mitigate these risks and ensure the government receives optimal value.

What is the strategic importance of these fire control systems to the U.S. Navy's operational capabilities?

Fire control systems are absolutely critical to the U.S. Navy's operational capabilities, serving as the 'brain' behind weapon systems. They integrate sensor data (from radar, sonar, electro-optical systems) with targeting information to accurately track threats and direct defensive or offensive weapons, such as missiles, guns, and torpedoes. Modern naval warfare demands highly sophisticated fire control systems capable of engaging multiple targets simultaneously in complex, contested environments. The strategic importance lies in maintaining fleet survivability, projecting power, and ensuring dominance in maritime theaters. Upgrading or procuring new fire control systems directly enhances the Navy's ability to respond to evolving threats, maintain technological superiority, and execute its mission effectively across the globe.

How does the competition level (2 bidders) impact the final price and innovation for this contract?

A competition with two bidders, while better than a sole-source award, presents a moderate level of competitive pressure. In this scenario, the two competing firms, Digital System Resources, Inc. and General Dynamics Mission Systems, Inc., would likely have engaged in significant efforts to differentiate their proposals based on technical merit, proposed costs, and potential for award fee achievement. The final price is influenced by each company's assessment of the government's needs, their own cost structures, and their strategic goals for securing the contract. While two bidders can drive prices down compared to a single bidder, a larger pool of competitors (e.g., 3-5 bidders) often leads to more aggressive pricing and potentially greater innovation as firms vie more intensely for the contract. The government's negotiation strategy and the clarity of the solicitation's requirements also play a crucial role in maximizing value from this level of competition.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 12450 FAIR LAKES CIR STE 800, FAIRFAX, VA, 22033

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline