DoD's $75.8M Engineering Services Contract Awarded to General Atomics for Unspecified Project 7756
Contract Overview
Contract Amount: $75,877,554 ($75.9M)
Contractor: General Atomics
Awarding Agency: Department of Defense
Start Date: 2022-05-09
End Date: 2026-06-30
Contract Duration: 1,513 days
Daily Burn Rate: $50.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PROJECT 7756
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121
Plain-Language Summary
Department of Defense obligated $75.9 million to GENERAL ATOMICS for work described as: PROJECT 7756 Key points: 1. Contract value of $75.8M over 1513 days suggests a significant, long-term engagement. 2. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a unique procurement path, potentially limiting broader market participation. 3. Awarded as a Cost Plus Fixed Fee (CPFF) contract, it allows for cost reimbursement plus a fixed fee, which can incentivize cost control but also carries inherent risk. 4. The contract's duration and cost warrant scrutiny for potential cost overruns and scope creep. 5. General Atomics, a major defense contractor, brings substantial experience, but the specific project details remain undisclosed. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation. 7. The 'Engineering Services' NAICS code (541330) covers a broad range of technical consulting and design activities.
Value Assessment
Rating: fair
Benchmarking the value of this $75.8M contract is challenging without specific project details. The Cost Plus Fixed Fee (CPFF) structure, while common in complex defense projects, can lead to higher costs compared to fixed-price contracts if not managed tightly. The duration of over 4 years suggests a substantial scope of work. Without comparable contracts for similar engineering services or detailed cost breakdowns, assessing true value-for-money is difficult. The fixed fee component provides some cost certainty for the government, but the underlying costs are reimbursable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This procurement method is unusual and implies that while competition was sought, certain sources were excluded, possibly due to specific technical requirements, security clearances, or prior relationships. The fact that there were 2 bids suggests some level of competition, but the exclusion of other potential bidders raises questions about the breadth of the competition and its impact on price discovery.
Taxpayer Impact: The limited competition may have resulted in a higher price for taxpayers than if a truly open competition had been conducted. It also suggests that the government may have had specific reasons for limiting the pool of potential contractors, which could impact overall cost-effectiveness.
Public Impact
The primary beneficiaries are likely the Department of the Navy and potentially other Department of Defense entities requiring specialized engineering services. The contract will deliver essential engineering and technical support, though the exact nature of these services is not specified. The geographic impact is likely concentrated in California, where the contractor is based, and potentially at Navy facilities where the engineering work is performed. The contract supports highly skilled engineering and technical jobs within the defense industry, contributing to the specialized workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of transparency regarding the specific project and services delivered.
- Potential for cost overruns inherent in Cost Plus Fixed Fee contracts.
- Limited competition raises concerns about optimal price discovery and value for taxpayer dollars.
- The 'exclusion of sources' clause requires further investigation to understand its justification and impact.
Positive Signals
- Awarded to a reputable and experienced defense contractor, General Atomics.
- The contract duration indicates a commitment to a potentially critical, long-term need.
- The fixed fee component provides a degree of cost predictability for the government.
- The definitive contract award type suggests a structured approach to service delivery.
Sector Analysis
The engineering services sector, particularly within defense, is characterized by high technical barriers to entry and significant government spending. NAICS code 541330 encompasses a wide array of engineering disciplines. This contract likely falls into a specialized niche within defense engineering, possibly related to naval systems, advanced technology development, or complex project management. Comparable spending benchmarks are difficult to establish without knowing the specific engineering discipline, but large-scale defense engineering contracts often run into tens or hundreds of millions of dollars.
Small Business Impact
The contract data indicates that this was not a small business set-aside (ss=false, sb=false). This suggests that the primary competition was likely among larger, established firms. There is no explicit information on subcontracting plans for small businesses. Without this data, it's difficult to assess the direct impact on the small business ecosystem, though larger prime contractors often utilize small businesses for specialized support.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates robust oversight to monitor costs, ensure compliance with contract terms, and verify the necessity and allowability of expenses. Transparency is limited by the lack of public detail on the project itself. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Naval Sea Systems Command (NAVSEA) Contracts
- Department of Defense Engineering Services
- Advanced Technology Development Contracts
- Cost Plus Fixed Fee Contracts
- General Atomics Defense Contracts
Risk Flags
- Limited competition raises concerns about value for money.
- Cost Plus Fixed Fee structure carries inherent risk of cost overruns.
- Lack of specific project details hinders transparency and oversight.
- Unclear justification for excluding sources from competition.
Tags
defense, department-of-the-navy, engineering-services, definitive-contract, cost-plus-fixed-fee, limited-competition, general-atomics, california, project-7756, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $75.9 million to GENERAL ATOMICS. PROJECT 7756
Who is the contractor on this award?
The obligated recipient is GENERAL ATOMICS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $75.9 million.
What is the period of performance?
Start: 2022-05-09. End: 2026-06-30.
What specific engineering services are being provided under Project 7756, and what is the justification for excluding certain sources from competition?
The specific engineering services provided under Project 7756 are not publicly disclosed in the provided data. The contract falls under NAICS code 541330 (Engineering Services), which is broad and can encompass design, consulting, research, and development. The procurement method, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicates that while the government intended to compete the contract, it specifically chose to exclude certain potential offerors. The justification for such exclusions typically relates to factors like unique technical capabilities, proprietary information, security requirements, or the need for specialized expertise possessed by only a limited number of contractors. Without further information from the contracting agency (Department of the Navy), the precise nature of the services and the rationale for source exclusion remain unknown. This lack of transparency hinders a full assessment of the contract's necessity and value.
How does the $75.8 million contract value compare to similar engineering services contracts awarded by the Department of the Navy?
Comparing the $75.8 million contract value requires context regarding the specific type of engineering services. For broad engineering services under NAICS 541330, this value is substantial but not extraordinary for a multi-year definitive contract within the Department of Defense. For instance, the Navy frequently awards large contracts for ship design, systems engineering, and R&D that can range from tens to hundreds of millions of dollars. However, if Project 7756 pertains to a more niche or specialized engineering field, $75.8 million could represent a significant portion of the available market. Without knowing the specific technical domain, it's difficult to definitively benchmark this value. The contract's duration of over 4 years (1513 days) also suggests a significant scope, making direct comparisons to shorter-term contracts less meaningful.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?
The primary risks associated with a $75.8 million CPFF contract over 1513 days include potential cost overruns, scope creep, and contractor inefficiency. In a CPFF contract, the government reimburses the contractor for allowable costs plus a fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as their profit is capped), the government bears the risk of cost increases. If the project's scope expands or unforeseen technical challenges arise, the total cost to the government can escalate significantly beyond initial estimates. Robust government oversight is crucial to monitor expenditures, ensure costs are reasonable and allocable, and manage any changes to the contract scope. The long duration increases the likelihood of encountering such issues. Contractor performance and the government's ability to manage the contract effectively are key determinants of risk realization.
What is General Atomics' track record with similar government contracts, particularly CPFF agreements?
General Atomics is a well-established defense contractor with a significant history of performing complex projects for the U.S. government, including the Department of Defense. They are known for work in areas such as unmanned aerial systems, nuclear technologies, and advanced defense systems. While specific details on their performance with CPFF contracts for engineering services are not provided here, their extensive experience suggests a capacity to manage large, complex agreements. CPFF contracts are common in R&D and system development where costs can be uncertain. Government contract databases and performance reports (like Contractor Performance Assessment Reporting System - CPARS) would provide more granular insights into their past performance, including timeliness, cost control, and quality on similar contracts. However, their general reputation in the defense sector implies a baseline level of competence.
How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method impact accountability and transparency?
The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method inherently reduces transparency and potentially impacts accountability. While it aims for competition, the explicit exclusion of certain sources means the full spectrum of market capabilities and pricing is not considered. This selective competition can make it harder for the public and oversight bodies to understand if the government truly obtained the best possible value. Accountability is challenged because the justification for excluding specific bidders might not be fully disclosed, making it difficult to scrutinize whether the exclusion was warranted or potentially influenced by factors other than pure technical necessity. This method requires strong justification from the agency to ensure it serves the government's best interest and doesn't unduly restrict competition, thereby limiting the government's leverage in price negotiations.
What are the potential implications of this contract on future spending patterns for similar engineering services within the Navy?
This contract could set a precedent for future spending on similar engineering services, particularly if Project 7756 proves highly successful or addresses a critical, ongoing need. The $75.8 million award, coupled with its multi-year duration, signals the Navy's commitment to this particular type of engineering support. If the CPFF structure proves effective in managing costs and delivering results for this project, the Navy might favor similar contract types for future endeavors with comparable uncertainties. Conversely, if cost overruns or performance issues arise, it could lead to greater scrutiny of CPFF contracts and a shift towards more fixed-price arrangements. The specific engineering domain addressed by Project 7756 will also influence future spending; if it relates to emerging technologies or critical platform upgrades, dedicated funding streams may be established or expanded.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Diazyme Laboratories, Inc.
Address: 3550 GENERAL ATOMICS CT, SAN DIEGO, CA, 92121
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: $76,645,198
Exercised Options: $76,645,198
Current Obligation: $75,877,554
Actual Outlays: $6,506,842
Subaward Activity
Number of Subawards: 44
Total Subaward Amount: $5,844,304
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-05-09
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2025-10-20
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