DoD's $293M contract for AN/BYG-1 TCS engineering services awarded to General Dynamics Mission Systems

Contract Overview

Contract Amount: $293,225,767 ($293.2M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-07-31

End Date: 2021-12-31

Contract Duration: 4,536 days

Daily Burn Rate: $64.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: ENGINEERING AND DEVELOPMENT SERVICES FOR THE AN/BYG-1 TACTICAL CONTROL SYSTEM (TCS)

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $293.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: ENGINEERING AND DEVELOPMENT SERVICES FOR THE AN/BYG-1 TACTICAL CONTROL SYSTEM (TCS) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type (Cost Plus Incentive Fee) can lead to cost overruns if not managed carefully. 3. A long performance period of over 12 years indicates a significant, long-term need for these services. 4. The value of the contract, while substantial, needs to be benchmarked against similar engineering services. 5. The specific tactical control system (AN/BYG-1) suggests a specialized defense application. 6. The absence of small business set-asides means opportunities for smaller firms may be limited.

Value Assessment

Rating: fair

The total award amount of $293.2 million over approximately 12 years represents a significant investment in specialized engineering services. Benchmarking this against similar long-term, complex defense system development contracts is crucial for a true value assessment. The Cost Plus Incentive Fee (CPIF) contract type introduces inherent risk, as costs can escalate beyond initial estimates if performance incentives are not structured to tightly control expenditures. Without specific comparable contract data or detailed cost breakdowns, it is difficult to definitively assess if the pricing is optimal or if significant value was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Navy sought bids from all responsible sources. While the number of bidders is not specified, this approach generally fosters a competitive environment, which can lead to better pricing and innovation. The open competition suggests that multiple companies were capable of meeting the stringent requirements for engineering and development services for the AN/BYG-1 Tactical Control System.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government explores a wide range of potential solutions, potentially leading to more cost-effective outcomes.

Public Impact

The primary beneficiaries are the U.S. Navy's submarine and surface fleet, which rely on the AN/BYG-1 TCS for critical command and control functions. The contract delivers essential engineering, development, and sustainment services for a key defense system. Geographic impact is likely concentrated around naval bases and defense contractor facilities, particularly in Virginia where the contractor is located. Workforce implications include employment for highly skilled engineers, technicians, and project managers within General Dynamics Mission Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee (CPIF) contract type carries inherent risk of cost overruns if incentives are not precisely aligned with cost control.
Long performance period (over 12 years) increases the potential for scope creep and evolving requirements that could impact final cost.
Lack of specific performance metrics or outcome data makes it difficult to assess the efficiency and effectiveness of the engineering services provided.
Specialized nature of the system means limited marketability or alternative uses for the developed technology, potentially reducing overall value.

Positive Signals

Awarded via full and open competition, suggesting a robust and fair bidding process.
General Dynamics Mission Systems is a well-established defense contractor with a track record in complex systems integration.
The contract addresses a critical capability for naval operations, indicating strategic importance.
The incentive fee structure, if well-defined, can motivate contractor performance towards specific goals.

Sector Analysis

This contract falls within the Defense Engineering Services sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would involve analyzing other large, long-term engineering support contracts for major defense platforms within the Navy and other military branches.

Small Business Impact

This contract does not appear to have included specific small business set-asides, as indicated by 'sb': false. This suggests that the primary award was made to a large business, General Dynamics Mission Systems. While large prime contractors are often required to subcontract a portion of their work to small businesses, the absence of a direct set-aside means that opportunities for small businesses may be less structured and dependent on the prime contractor's subcontracting plan. This could limit direct access for small businesses seeking to contribute to this specific program.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting officers and program management teams. Accountability measures are typically embedded within the Cost Plus Incentive Fee structure, linking contractor payment to performance against defined objectives. Transparency is often limited in defense contracts due to national security considerations, but contract awards and basic details are usually publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

AN/BYG-1 Tactical Combat System
Submarine Combat Systems
Naval Command and Control Systems
Defense Engineering Services Contracts
Department of the Navy IT and Software Development

Risk Flags

Cost Overrun Risk (CPIF)
Long Duration Performance Risk
Scope Creep Potential
Requirement Volatility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $293.2 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. ENGINEERING AND DEVELOPMENT SERVICES FOR THE AN/BYG-1 TACTICAL CONTROL SYSTEM (TCS)

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 $293.2 million.

What is the period of performance?

Start: 2009-07-31. End: 2021-12-31.

What is the historical spending trend for the AN/BYG-1 TCS program with General Dynamics Mission Systems?

The provided data reflects a single definitive contract awarded on July 31, 2009, with an end date of December 31, 2021, totaling $293,225,767.05. This suggests that the majority of the spending occurred within this period. To understand the historical trend, one would need to examine the contract's funding history, including any modifications, task orders, and actual disbursements over its lifespan. Without access to the contract's detailed financial execution data, it's impossible to determine if spending was consistent year-over-year or if there were significant fluctuations. Further analysis would require accessing the contract's funding reports and potentially comparing it to previous or subsequent contracts for the same system to identify trends in investment.

How does the per-unit cost of the AN/BYG-1 TCS engineering services compare to similar systems?

Determining a 'per-unit cost' for engineering and development services like those provided for the AN/BYG-1 TCS is inherently complex and often not directly comparable across different systems or contracts. Unlike the procurement of tangible goods, engineering services are often priced based on labor hours, complexity, and project milestones. The total contract value of $293.2 million spread over more than a decade represents investment in ongoing development, sustainment, and upgrades, rather than a fixed number of discrete units. To benchmark value, one would need to compare the total cost against the scope of work, the system's criticality, the number of platforms it supports, and the duration of support, relative to similar complex defense system engineering contracts. Without detailed breakdowns of labor categories, hours, and specific deliverables, a direct per-unit cost comparison to market rates or similar contracts is not feasible.

What are the key performance indicators (KPIs) used to manage this Cost Plus Incentive Fee (CPIF) contract?

The specific Key Performance Indicators (KPIs) for this Cost Plus Incentive Fee (CPIF) contract are not detailed in the provided summary data. In a CPIF contract, the government and contractor agree on target costs, target profits, and a fee-sharing arrangement for cost savings or overruns, linked to specific performance objectives. These objectives typically relate to technical performance (e.g., system reliability, functionality), schedule adherence (e.g., meeting milestones), and potentially other metrics relevant to the engineering and development services. The 'incentive' aspect means the contractor's final profit is adjusted based on how well they meet or exceed these pre-defined KPIs. A thorough review of the contract's Statement of Work (SOW) and the contract clauses related to the incentive fee structure would be necessary to identify the precise KPIs governing this agreement.

What is General Dynamics Mission Systems' track record with the AN/BYG-1 TCS program prior to and after this contract?

General Dynamics Mission Systems (GDMS) has a long-standing relationship with the AN/BYG-1 Tactical Control System (TCS), as evidenced by this extensive contract. GDMS is known for its work on various naval combat systems. This specific contract, awarded in 2009 and ending in 2021, represents a significant period of their involvement. To fully assess their track record, one would need to investigate their performance during this contract period, looking for any contract modifications, awards, or disputes. Additionally, research into GDMS's involvement with the AN/BYG-1 TCS before 2009 and any subsequent contracts or sustainment activities after 2021 would provide a more complete picture of their continuous support and development role for this critical system.

What are the potential risks associated with the long duration and CPIF structure of this contract?

The combination of a long contract duration (over 12 years) and a Cost Plus Incentive Fee (CPIF) structure presents several potential risks. For the government, the primary risk is cost escalation. CPIF contracts, while incentivizing performance, can lead to higher final costs than fixed-price contracts if the target cost is not well-defined or if performance incentives are not tightly aligned with cost control. The long duration increases the likelihood of requirement changes, technological obsolescence, and potential scope creep, all of which can drive up costs and extend timelines. For the contractor, risks include the challenge of accurately estimating costs over such an extended period and ensuring consistent performance to meet incentive targets. Effective program management, rigorous oversight, and proactive risk mitigation strategies are essential to manage these inherent risks.

Industry Classification

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

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002408R6295

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $393,328,704

Exercised Options: $386,052,945

Current Obligation: $293,225,767

Actual Outlays: $2,574,688

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline