DoD's $191M contract for PGM MGMT & SYS ENG awarded to General Dynamics Mission Systems, Inc

Contract Overview

Contract Amount: $191,468,423 ($191.5M)

Contractor: General Dynamics Mission Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-03-31

End Date: 2028-06-30

Contract Duration: 3,013 days

Daily Burn Rate: $63.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: PGM MGMT, SYS ENG&BUSINESS MGMT

Place of Performance

Location: PITTSFIELD, BERKSHIRE County, MASSACHUSETTS, 01201

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $191.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: PGM MGMT, SYS ENG&BUSINESS MGMT Key points: 1. Contract awarded on a cost-plus-incentive-fee basis, suggesting potential for cost overruns if not managed carefully. 2. The contract's duration of over 8 years (3013 days) indicates a long-term commitment for these services. 3. Awarded as 'NOT COMPETED', raising questions about the justification for foregoing a competitive process. 4. The contract is a definitive contract, implying a firm commitment from the government. 5. The base value of $63.5M suggests significant initial investment, with potential for growth through incentives. 6. The contract falls under Facilities Support Services, a broad category that may encompass various operational needs.

Value Assessment

Rating: questionable

Benchmarking the value of this $191M contract is challenging without detailed service breakdowns and performance metrics. The cost-plus-incentive-fee (CPIF) structure means the final cost is not fixed and depends on achieving certain performance targets, which can lead to costs exceeding initial estimates if targets are missed or if the incentive structure is not well-aligned with value for money. Comparing it to similar long-term, sole-source facilities support contracts would be necessary for a more robust assessment of its pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' procedure, indicating that a full and open competition was not conducted. The specific justification for this sole-source award is not provided in the data, but it typically implies that only one responsible source was available or that the urgency of the requirement precluded competition. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through a bidding process.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. The justification for the sole-source award needs to be thoroughly reviewed to ensure it was appropriate and that the government did not forgo potential cost savings.

Public Impact

The primary beneficiaries are likely the Department of the Navy and potentially other Department of Defense entities requiring program management and systems engineering support. Services delivered include program management and systems engineering, crucial for the successful execution of defense initiatives. The geographic impact is not specified but likely supports naval operations and facilities within the purview of the Department of the Navy. Workforce implications could include the employment of specialized engineers, program managers, and support staff by General Dynamics Mission Systems, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
The CPIF contract type introduces risk of cost overruns if performance incentives are not structured effectively.
The long duration of the contract (over 8 years) may reduce flexibility to adapt to changing technological needs or strategic priorities.
The broad nature of 'Facilities Support Services' could lead to scope creep if not tightly managed.

Positive Signals

Award to a large, established defense contractor like General Dynamics suggests a focus on reliability and proven capability.
The CPIF structure, if well-managed, can incentivize contractor performance towards specific, measurable goals.
The definitive contract type provides a stable framework for long-term program execution.
The contract supports critical program management and systems engineering functions essential for defense operations.

Sector Analysis

This contract falls within the broader defense sector, specifically supporting program management and systems engineering for the Department of the Navy. The market for these specialized services is dominated by large defense contractors. Comparable spending benchmarks would involve analyzing other large, long-term contracts for similar professional services within the DoD, particularly those focused on complex program execution and technical support. The total value of $191M over 3013 days places it as a significant, long-term investment in critical support functions.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses, and General Dynamics Mission Systems, Inc., as a large prime contractor, is unlikely to have significant subcontracting obligations to small businesses unless mandated by other contract clauses not detailed here. The absence of small business considerations in this award may limit opportunities for smaller firms within this specific contract's scope.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. Accountability measures are embedded within the Cost Plus Incentive Fee (CPIF) structure, which ties contractor profit to performance outcomes. Transparency could be enhanced by making the justification for the sole-source award publicly available and by regularly reporting on performance metrics and cost performance. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Program Management Support
Naval Systems Engineering Contracts
Facilities Support Services Contracts
Cost-Plus-Incentive-Fee Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award without clear justification.
Potential for cost overruns due to CPIF structure.
Risk of technological obsolescence over the long contract duration.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $191.5 million to GENERAL DYNAMICS MISSION SYSTEMS, INC.. PGM MGMT, SYS ENG&BUSINESS MGMT

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 $191.5 million.

What is the period of performance?

Start: 2020-03-31. End: 2028-06-30.

What is the specific justification for awarding this $191M contract to General Dynamics Mission Systems, Inc. on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED', signifying a sole-source award. However, the specific justification for this determination is not included. Typically, sole-source awards are justified under circumstances such as only one responsible source being available, urgent and compelling needs that preclude competition, or when a follow-on contract is awarded to the original source under specific conditions. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to ascertain the precise rationale. This lack of transparency is a concern, as it prevents independent verification that competition was appropriately considered and that the government obtained the best value possible under the circumstances. A thorough review of the J&A would be necessary to understand the rationale and assess its validity.

How does the Cost Plus Incentive Fee (CPIF) structure of this contract compare to industry standards for similar services, and what are the potential risks?

The Cost Plus Incentive Fee (CPIF) contract type is common in defense and complex service procurements where costs are difficult to estimate precisely upfront and where performance incentives are desired. In a CPIF contract, the final profit is adjusted based on the contractor's performance against agreed-upon targets (e.g., cost, schedule, performance). Industry standards vary, but effective CPIF structures align incentives closely with government objectives and include clear metrics for success. The primary risk with CPIF is that if the targets are poorly defined, the incentive structure is flawed, or if the government's oversight is weak, costs can escalate beyond initial projections. The contractor may be incentivized to achieve targets that are not necessarily in the government's best long-term interest, or the government may end up paying a premium if the contractor significantly outperforms expectations without a corresponding increase in value. Robust government oversight and well-defined performance metrics are crucial to mitigate these risks.

What is the historical spending pattern for Facilities Support Services (NAICS 561210) within the Department of the Navy, and how does this contract compare?

Historical spending data for Facilities Support Services (NAICS 561210) within the Department of the Navy would reveal the typical scale, duration, and types of contracts awarded in this category. Without access to that specific historical data, it's difficult to provide a precise comparison. However, a $191 million contract over more than 8 years is substantial, suggesting a significant scope of services or a critical long-term requirement. Generally, Facilities Support Services encompass a wide range of activities, from maintenance and repair to base operations and specialized technical support. Comparing this contract's value and duration to the average or median for similar Navy contracts would indicate whether it represents a typical investment, an outlier, or a particularly large-scale requirement. Analyzing the distribution of spending across competitive versus sole-source awards within this category would also provide context on procurement practices.

Given the 'NOT COMPETED' status, what mechanisms are in place to ensure General Dynamics Mission Systems, Inc. is delivering value for money throughout the contract's duration?

Even with a sole-source award, mechanisms exist to ensure value for money, although they are often less robust than those driven by competition. For this Cost Plus Incentive Fee (CPIF) contract, the incentive structure itself is a primary mechanism. The government must actively monitor the contractor's performance against the established targets for cost, schedule, and technical performance. Regular performance reviews, audits, and cost analyses are critical. The contracting officer's representative (COR) plays a vital role in overseeing day-to-day performance and ensuring deliverables meet requirements. Furthermore, the government retains the right to negotiate modifications and potentially adjust incentive targets if circumstances change significantly. Transparency in reporting performance metrics and cost data to relevant oversight bodies also contributes to accountability, though the absence of competition inherently limits the government's leverage in price negotiations.

What are the potential implications of the contract's long duration (3013 days) on technological relevance and adaptability for the Department of the Navy?

A contract duration of over 8 years (3013 days) for program management and systems engineering presents both opportunities and risks regarding technological relevance and adaptability. On the positive side, it provides stability and allows the contractor to develop deep expertise and long-term strategic insights, potentially leading to more integrated and effective solutions. However, the rapid pace of technological advancement, particularly in systems engineering, means that solutions implemented early in the contract could become outdated before its completion. This necessitates built-in flexibility, regular reviews of technological roadmaps, and potentially contract modifications to incorporate new technologies. Without proactive management and adaptation strategies, the Navy risks being locked into legacy systems or processes, diminishing the long-term value and effectiveness of the support provided. The CPIF structure might offer some leverage to incentivize adoption of newer, more efficient technologies if incorporated into performance metrics.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003020R0001

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 100 PLASTICS AVE, PITTSFIELD, MA, 01201

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $191,544,998

Exercised Options: $191,544,998

Current Obligation: $191,468,423

Actual Outlays: $22,993,290

Subaward Activity

Number of Subawards: 56

Total Subaward Amount: $4,565,985

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline