DoD's $29M contract for navigation systems awarded to General Dynamics C4 Systems, Inc. with no competition

Contract Overview

Contract Amount: $29,027,844 ($29.0M)

Contractor: General Dynamics C4 Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-07-11

End Date: 2010-06-03

Contract Duration: 692 days

Daily Burn Rate: $41.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LPD 24

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to GENERAL DYNAMICS C4 SYSTEMS, INC. for work described as: LPD 24 Key points: 1. The contract value of $29 million for navigation systems represents a significant investment in defense capabilities. 2. The sole-source award to General Dynamics C4 Systems, Inc. raises questions about potential price inflation and limited market engagement. 3. The absence of competition is a key risk indicator, potentially limiting innovation and cost-effectiveness. 4. This contract falls within the broader category of defense electronics manufacturing, a sector characterized by high technological demands and specialized suppliers. 5. The duration of the contract (692 days) suggests a substantial project requiring sustained effort and resources. 6. The contract's focus on search, detection, and navigation systems highlights its critical role in military operations.

Value Assessment

Rating: questionable

Benchmarking the value of this $29 million contract is challenging without specific performance metrics or comparable sole-source awards. However, the lack of competition inherently limits the government's ability to secure the best possible price. Without competitive bids, it's difficult to ascertain if the price paid reflects true market value or if a more cost-effective solution could have been obtained through an open bidding process. The fixed-price nature of the contract shifts some risk to the contractor, but the overall value proposition is weakened by the absence of competitive pressure.

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 C4 Systems, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies submitting proposals. The lack of competition means that taxpayers did not benefit from the price discovery mechanisms inherent in a competitive environment, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to leverage market forces for cost savings.

Public Impact

The primary beneficiaries of this contract are the Department of Defense, specifically the Department of the Navy, which will receive advanced navigation systems. The services delivered include the manufacturing and provision of search, detection, navigation, guidance, aeronautical, and nautical systems. The geographic impact is primarily within the United States, with the contractor based in Arizona, though the systems will likely be deployed globally. The contract supports specialized jobs within the defense manufacturing sector, particularly in areas related to advanced electronics and systems integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer money.
Sole-source awards can stifle innovation by not encouraging new entrants or alternative solutions.
Limited transparency in the procurement process due to the absence of multiple bids.
Potential for vendor lock-in, making future procurements more difficult and costly.

Positive Signals

The contract is with a known entity, General Dynamics C4 Systems, Inc., which may imply a level of established capability and reliability.
The fixed-price contract type helps to define costs upfront, providing some budget certainty.
The contract addresses critical defense needs for navigation and guidance systems.

Sector Analysis

The contract falls within the "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" sector (NAICS 334511). This is a specialized segment of the broader defense electronics industry, characterized by high barriers to entry due to technological complexity and stringent quality requirements. The market size for such systems is substantial, driven by ongoing defense modernization efforts globally. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of defense contracts and the unique specifications often involved, but this $29 million award is a significant sum for a single contract in this niche.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business) flag is also false. This suggests that the contract was not specifically targeted towards small businesses, and there is no explicit indication of subcontracting requirements for small businesses. Consequently, the direct impact on the small business ecosystem from this particular award is likely minimal, though General Dynamics may engage small businesses as part of its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and auditing mechanisms. As a sole-source award, it may receive heightened scrutiny from oversight bodies like the Government Accountability Office (GAO) or the Department of Defense Inspector General (IG) to ensure the justification for non-competition was sound and the pricing is fair. Transparency is limited due to the lack of public bid data, but contract award details are generally available through federal procurement databases.

Related Government Programs

Defense Navigation Systems Procurement
Naval Aviation Support Systems
Military Electronics Manufacturing
Sole-Source Defense Contracts
General Dynamics C4 Systems Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency in the procurement process.
Absence of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to GENERAL DYNAMICS C4 SYSTEMS, INC.. LPD 24

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS C4 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 $29.0 million.

What is the period of performance?

Start: 2008-07-11. End: 2010-06-03.

What is the specific justification provided for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under circumstances such as urgent and compelling needs, unique capabilities possessed by only one source, or when competition is deemed not feasible or not in the best interest of the government. Without the official justification document, it is impossible to determine the precise rationale. However, the absence of competition inherently raises concerns about whether alternative solutions were adequately explored or if market research was sufficiently comprehensive to identify potential competitors.

How does the $29 million contract value compare to similar navigation system procurements by the Department of the Navy?

Direct comparison of the $29 million contract value to similar procurements is challenging without access to detailed historical data on navigation system contracts with identical specifications and scope. The Department of the Navy procures a wide array of navigation systems, varying significantly in complexity, technology, and quantity. However, $29 million represents a substantial investment. The fact that this was a sole-source award to General Dynamics C4 Systems, Inc. suggests it might be for a specialized or proprietary system, making direct price comparisons with competitively bid, off-the-shelf systems difficult. Further analysis would require examining contracts for systems with comparable technological sophistication and operational roles.

What are the potential risks associated with awarding a $29 million contract without competition?

The primary risk associated with awarding a $29 million contract without competition is the potential for overpayment. Without competitive bids, the government lacks a benchmark to ensure the price is fair and reasonable. This can lead to inflated costs for taxpayers. Additionally, sole-source awards can limit innovation, as there is no incentive for contractors to propose novel or more cost-effective solutions. It can also lead to vendor lock-in, making future procurements more expensive and less flexible. Furthermore, the lack of transparency in the bidding process can raise concerns about fairness and the thoroughness of the government's market research.

What is General Dynamics C4 Systems, Inc.'s track record with the Department of Defense for similar systems?

General Dynamics C4 Systems, Inc. (now part of General Dynamics Mission Systems) has a significant track record of providing complex systems and technologies to the Department of Defense. They are known for their work in command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems, which often include navigation, guidance, and communication components. While specific details on their performance for this particular contract (awarded in 2008) are not provided, their general standing as a major defense contractor suggests they possess the technical capabilities and experience required for such procurements. Past performance reviews and contract histories would offer a more granular assessment.

What is the expected performance outcome or effectiveness of the navigation systems procured under this contract?

The provided data focuses on the contractual aspects (awardee, value, dates, type) and does not include details on the specific performance requirements, technical specifications, or expected outcomes of the navigation systems. The contract is for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' implying systems crucial for military operations, potentially including aircraft, ships, or ground vehicles. Effectiveness would be measured against operational needs, reliability, accuracy, and integration with existing military platforms. Post-award performance reviews and operational feedback would be necessary to assess the actual effectiveness of the delivered systems.

How does this $29 million contract fit into the broader historical spending patterns for navigation systems within the Department of the Navy?

This $29 million contract represents a single, significant award within the Department of the Navy's broader spending on navigation and related systems. The Navy, operating a large fleet of ships and aircraft, consistently invests in advanced navigation technologies. Historical spending patterns would show a continuous need for such systems, with expenditures fluctuating based on modernization cycles, new platform acquisitions, and upgrades to existing assets. A sole-source award of this magnitude suggests a specific, perhaps unique, requirement that may not align with typical, competitively sourced procurements for more common navigation equipment. Analyzing trends would require a review of annual budgets and contract awards over several fiscal years.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003907R0017

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 8201 E MCDOWELL RD, SCOTTSDALE, AZ, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $29,027,844

Exercised Options: $29,027,844

Current Obligation: $29,027,844

Contract Characteristics

Cost or Pricing Data: NO

Timeline