DoD's $84.5M R&D contract for engineering development awarded to General Dynamics without competition

Contract Overview

Contract Amount: $84,482,374 ($84.5M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-03-31

End Date: 2015-03-03

Contract Duration: 2,163 days

Daily Burn Rate: $39.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: R&D

Official Description: 1B3 ENGINEERING DEVELOPMENT MODEL AND FY09 1B2 PRODUCTION

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $84.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 1B3 ENGINEERING DEVELOPMENT MODEL AND FY09 1B2 PRODUCTION Key points: 1. The contract's value of $84.5 million for research and development indicates a significant investment in advanced engineering. 2. Awarded without competition, this contract raises questions about potential price discovery and market efficiency. 3. The Cost Plus Incentive Fee (CPIF) pricing structure suggests a focus on performance incentives, but requires careful monitoring. 4. The duration of over 5 years (2163 days) points to a complex, long-term development effort. 5. The contract falls under the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code, highlighting its technical focus. 6. The absence of small business set-asides or subcontracting plans suggests a focus on large prime contractors.

Value Assessment

Rating: questionable

Benchmarking the value of this $84.5 million contract is challenging without comparable sole-source R&D awards. The Cost Plus Incentive Fee (CPIF) structure, while incentivizing performance, can lead to cost overruns if not managed tightly. The lack of competition means there's no direct market comparison to assess if the price is optimal. However, the significant investment suggests a critical need for the developed technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Mission Systems, Inc., was considered. This typically occurs when a unique capability is required, or for follow-on work where competition is not feasible. The lack of multiple bidders limits the opportunity for price negotiation and may result in a higher cost to the government compared to a competitive procurement.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, the government lacks assurance that it secured the best possible price for the research and development services.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive advanced engineering development capabilities. The contract supports the development of specific technologies crucial for national security, though the exact nature is not detailed. The geographic impact is primarily centered around the contractor's facilities, likely in Virginia where the contract is registered. The workforce implications involve highly skilled engineers and researchers employed by General Dynamics and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
CPIF contract type requires robust oversight to manage cost and performance effectively.
Long contract duration increases exposure to potential scope creep and cost escalation.
Lack of small business participation may limit innovation and broader economic impact.

Positive Signals

Award to a known entity (General Dynamics) suggests a reliance on established expertise.
Focus on R&D indicates investment in future technological capabilities.
CPIF structure aims to align contractor incentives with government objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences. The market for defense-related R&D is characterized by high barriers to entry, specialized expertise, and significant government investment. Comparable spending benchmarks are difficult to establish for sole-source R&D due to its unique nature, but the $84.5 million figure represents a substantial commitment to technological advancement within the defense industrial base.

Small Business Impact

This contract does not appear to include specific small business set-asides, nor is there an indication of mandatory subcontracting goals. The sole-source nature and the focus on advanced engineering development likely favored a large, established prime contractor like General Dynamics. This approach may limit opportunities for small businesses to participate directly, although they could potentially be involved as subcontractors if General Dynamics chooses to engage them.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The Cost Plus Incentive Fee (CPIF) structure necessitates close monitoring of costs, performance metrics, and achievement of milestones. Transparency is generally limited for sole-source R&D contracts, but reporting requirements within the contract would dictate the level of detail provided to the government.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Engineering Development Contracts
General Dynamics Mission Systems Contracts
Cost Plus Incentive Fee Contracts

Risk Flags

Sole-source award
Cost Plus Incentive Fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 1B3 ENGINEERING DEVELOPMENT MODEL AND FY09 1B2 PRODUCTION

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 $84.5 million.

What is the period of performance?

Start: 2009-03-31. End: 2015-03-03.

What specific technologies or capabilities is this contract intended to develop?

The provided data does not specify the exact technologies or capabilities being developed under this $84.5 million contract. However, it falls under the NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' This broad category suggests the development could range from advanced materials, propulsion systems, electronic warfare capabilities, or other complex engineering solutions critical to national defense. Further details would likely be found in the contract's statement of work or associated documentation, which are not publicly available in this dataset.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source can satisfy the agency's needs. For R&D contracts, this often occurs when the work builds upon proprietary technology, requires highly specialized expertise unique to a single contractor, or involves follow-on development where competition is impractical or not cost-effective. Without specific justification documentation, it's presumed the Department of Defense determined that General Dynamics Mission Systems, Inc. possessed unique qualifications or capabilities essential for this particular engineering development project, making full and open competition infeasible.

How does the Cost Plus Incentive Fee (CPIF) structure typically function, and what are its risks?

A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and receives an incentive fee based on meeting or exceeding certain performance objectives. The fee is adjusted based on the relationship between final costs and target costs. The government sets a target cost, a target fee, and a minimum and maximum fee. If the contractor finishes below target cost, they receive a larger share of the savings; if above, they share in the excess cost. The primary risk is that the contractor may take excessive risks to achieve targets, or that poorly defined targets can lead to disputes. Robust government oversight is crucial to manage these risks and ensure value.

What is the historical spending pattern for similar R&D contracts within the Department of Defense?

The Department of Defense is a major investor in Research and Development, with annual spending often in the tens of billions of dollars across various scientific and engineering disciplines. Historical patterns show a significant portion allocated to sole-source or limited-competition contracts for highly specialized or classified projects, particularly in areas like aerospace, cybersecurity, and advanced materials. While specific dollar amounts vary year-to-year based on strategic priorities, the trend is towards investing in technological superiority. The $84.5 million for this specific contract is a notable but not extraordinary sum within the broader DoD R&D portfolio, reflecting a substantial investment in a particular development effort.

What is the track record of General Dynamics Mission Systems, Inc. in fulfilling similar R&D contracts?

General Dynamics Mission Systems, Inc. (GDMS) is a well-established defense contractor with a long history of delivering complex systems and technologies to the U.S. military and government agencies. They have a significant portfolio of contracts, including those involving research, development, and production of advanced electronic systems, command and control solutions, and cyber capabilities. While specific performance metrics for past R&D contracts are not detailed here, GDMS generally has a reputation for technical expertise. However, like any large contractor, they may have faced challenges or scrutiny on specific projects. A comprehensive assessment would require reviewing their performance history across multiple contracts and agencies.

What are the potential long-term implications of this contract for technological advancement in its field?

This contract represents a significant investment aimed at advancing specific engineering capabilities for the Department of Defense. If successful, the developed technologies could provide a substantial leap in performance, efficiency, or security for military applications. This could lead to enhanced operational effectiveness, improved situational awareness, or new strategic advantages. The long-term implications also extend to the broader technological ecosystem, potentially spurring further innovation, influencing future research directions, and creating new market opportunities for related technologies or services, although the specific impact depends heavily on the nature of the R&D outcome.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002409R5396

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

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

Financial Breakdown

Contract Ceiling: $96,705,448

Exercised Options: $84,486,361

Current Obligation: $84,482,374

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline