General Dynamics awarded $1.58B contract for MK 48 Mod 7 Guidance & Control Section and WES Kit
Contract Overview
Contract Amount: $158,110,479 ($158.1M)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-08-30
End Date: 2027-10-31
Contract Duration: 2,984 days
Daily Burn Rate: $53.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: DESIGN OF MK 48 MOD 7 G&C SECTION&WES KIT
Place of Performance
Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $158.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: DESIGN OF MK 48 MOD 7 G&C SECTION&WES KIT Key points: 1. Contract value of $1.58 billion over nearly 8 years suggests significant investment in critical defense systems. 2. The use of a Cost Plus Incentive Fee (CPIF) pricing structure indicates a focus on performance and cost control, with potential for shared savings. 3. The definitive contract type implies a long-term commitment to a specific product or service. 4. The contract is for a critical component of the MK 48 torpedo, highlighting its strategic importance. 5. The award to a single, large contractor suggests a mature market for this specialized defense component.
Value Assessment
Rating: good
The contract value of $1.58 billion for the MK 48 Mod 7 G&C Section and WES Kit over approximately 8 years represents a substantial investment. Benchmarking this specific component's cost is challenging without more granular data on unit production and development phases. However, the CPIF contract type suggests an effort to manage costs effectively by incentivizing the contractor to meet or beat targets. The award amount appears consistent with the complexity and criticality of advanced naval weapon systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The presence of 3 bidders suggests a reasonably competitive environment for this specialized defense component. While the specific details of the competition are not provided, full and open competition generally leads to better price discovery and value for the government.
Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down prices and encourages innovation among defense contractors, ensuring the best value for public funds.
Public Impact
The U.S. Navy benefits directly through the acquisition of advanced torpedo components essential for its submarine fleet's operational capabilities. This contract supports the continued modernization and readiness of critical naval defense systems. The contract's duration and value imply sustained employment and business for General Dynamics Mission Systems and its supply chain. The geographic impact is primarily within the United States, supporting domestic defense manufacturing and technological expertise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive Fee contracts can sometimes lead to cost overruns if not managed diligently.
- The long duration of the contract (nearly 8 years) requires sustained oversight to ensure performance and prevent complacency.
- Reliance on a single contractor for such a critical component could pose supply chain risks if not mitigated.
Positive Signals
- Awarded under full and open competition, suggesting a competitive process that should yield good value.
- The CPIF structure incentivizes the contractor to achieve cost efficiencies and performance targets.
- The contract addresses a critical defense need, ensuring the readiness of naval forces.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of advanced guidance and control systems for naval weaponry. The market for such specialized components is typically dominated by a few large, established defense contractors due to high barriers to entry, including technological expertise, security clearances, and significant capital investment. Spending in this sub-sector is driven by military modernization programs and the need for cutting-edge defense capabilities.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, General Dynamics Mission Systems, is a large defense entity. While there are no direct set-asides, large prime contractors are often required to meet subcontracting goals with small businesses. The impact on the small business ecosystem would depend on the extent to which General Dynamics fulfills these subcontracting obligations for specialized components or services related to this contract.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Cost Plus Incentive Fee (CPIF) structure necessitates close monitoring of costs and performance against established targets. Transparency is generally maintained through contract reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- MK 48 Torpedo Program
- Naval Weapons Systems
- Submarine Warfare Systems
- Defense Manufacturing Contracts
- Guidance and Control Systems
Risk Flags
- Long-term contract duration may increase risk of technological obsolescence.
- CPIF contracts require robust oversight to manage costs effectively.
- Sole-source potential for future upgrades if competition diminishes.
Tags
defense, department-of-defense, department-of-the-navy, definitive-contract, cost-plus-incentive-fee, full-and-open-competition, navigational-guidance-systems, torpedo-components, virginia, large-contract, weapon-systems
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $158.1 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. DESIGN OF MK 48 MOD 7 G&C SECTION&WES KIT
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 $158.1 million.
What is the period of performance?
Start: 2019-08-30. End: 2027-10-31.
What is the historical spending trend for the MK 48 Mod 7 G&C Section and WES Kit prior to this award?
Detailed historical spending data for this specific component prior to the current award is not publicly available in a readily accessible format. However, the MK 48 torpedo program itself has a long history, with various modifications and upgrades over decades. Previous contracts for the MK 48 Mod 7 variants would have involved significant investment, reflecting the complexity and ongoing development of this critical weapon system. Analyzing past contract awards for similar components or upgrades could provide context, but direct year-over-year spending trends for this precise sub-assembly are typically found in internal DoD budget documents or specialized defense industry reports.
How does the pricing structure (CPIF) compare to other similar defense component contracts?
The Cost Plus Incentive Fee (CPIF) structure is common in defense contracting for complex systems where precise cost estimation is difficult, and performance incentives are crucial. It allows the government to share in cost savings if the contractor performs below target costs, while also capping potential overruns. Compared to fixed-price contracts, CPIF offers more flexibility but requires robust government oversight. Many advanced weapon system development and production contracts utilize CPIF or similar incentive-based fee structures to balance risk and reward between the government and the contractor, encouraging efficiency and technological advancement.
What are the key performance indicators (KPIs) being incentivized under this CPIF contract?
While the specific Key Performance Indicators (KPIs) incentivized under this particular Cost Plus Incentive Fee (CPIF) contract are not detailed in the provided data, they typically relate to critical aspects of the MK 48 Mod 7 G&C Section and WES Kit. Common KPIs in such defense contracts include meeting stringent technical performance specifications (e.g., accuracy, reliability, operational range), adhering to production schedules, achieving specific quality standards, and potentially incorporating new technological advancements or upgrades within the defined cost and schedule parameters. The incentive fee is designed to reward the contractor for exceeding these targets.
What is General Dynamics Mission Systems' track record with the MK 48 torpedo program?
General Dynamics Mission Systems (GDMS) has a significant and established track record with the MK 48 torpedo program, including its variants like the Mod 7. As a major defense contractor specializing in complex systems integration and naval warfare solutions, GDMS has been a key player in the development, production, and sustainment of the MK 48 torpedo for many years. Their experience encompasses various components and subsystems, making them a logical and experienced choice for this contract. Their long-standing involvement suggests a deep understanding of the program's requirements and a proven ability to deliver.
What are the potential risks associated with the long contract duration (2019-2027)?
The long contract duration of nearly eight years presents several potential risks. Firstly, technological obsolescence is a concern; advancements in torpedo technology could render the Mod 7 outdated before the contract concludes, requiring costly modifications or replacements. Secondly, economic fluctuations or changes in defense priorities could impact funding stability, potentially leading to contract modifications or termination. Thirdly, maintaining consistent performance and quality over such an extended period requires diligent oversight to prevent complacency or degradation. Lastly, long-term reliance on a single contractor could create vulnerabilities in the supply chain or reduce competitive pressure for future upgrades.
How does the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code relate to this contract?
The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' is highly relevant to this contract. It accurately categorizes the core business activities involved in producing the MK 48 Mod 7 Guidance & Control Section and WES Kit. These components are integral to the search, detection, navigation, and guidance functions of the MK 48 torpedo, which is a naval weapon system. This NAICS code signifies that the contract is for the manufacturing of sophisticated electronic and electromechanical instruments used for these critical military purposes.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002418R6411
Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Wico Limited
Address: 9500 INNOVATION DR, MANASSAS, VA, 20110
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $194,494,253
Exercised Options: $178,483,245
Current Obligation: $158,110,479
Subaward Activity
Number of Subawards: 107
Total Subaward Amount: $40,691,513
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-08-30
Current End Date: 2027-10-31
Potential End Date: 2027-10-31 00:00:00
Last Modified: 2025-11-04
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