DoD's $1.5B General Dynamics Contract for JTRS Cluster I Electronics Development Faces Scrutiny
Contract Overview
Contract Amount: $1,504,359,694 ($1.5B)
Contractor: General Dynamics Mission Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2004-07-16
End Date: 2016-05-31
Contract Duration: 4,337 days
Daily Burn Rate: $346.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: 200410!005969!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T04CE405 !A!N! !N! ! !20040716!20111230!046863929!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8201 E MCDOWELL ROAD !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARICOPA !ARIZONA !+000010000000!N!N!000000000000!AC63!RDTE/ELECTRONICS&COMMUNICATION EQ-ADV TECH DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !360 !JTRS CLUSTER I !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!R!2!002!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85257
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $1.50 billion to GENERAL DYNAMICS MISSION SYSTEMS, INC. for work described as: 200410!005969!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T04CE405 !A!N! !N! ! !20040716!20111230!046863929!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8201 E MCDOWELL ROAD !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARI… Key points: 1. The contract awarded to General Dynamics Decision Systems for advanced technology development in electronics and communication equipment is a significant investment. 2. Competition was full and open, but the contract type (Cost Plus Award Fee) can lead to higher costs if not managed tightly. 3. Potential risks include cost overruns and ensuring the advanced technology meets evolving defense needs. 4. The sector is Research & Development (RDTE) within Defense, focusing on critical communication equipment.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure, while incentivizing performance, carries inherent risks of cost escalation. Benchmarking against similar advanced R&D contracts is difficult due to the specialized nature of the technology, but the total value suggests a need for rigorous cost oversight.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the Cost Plus Award Fee (CPAF) pricing structure allows for costs plus a fee that may be adjusted based on performance, potentially leading to higher final costs than fixed-price contracts.
Taxpayer Impact: While competition was present, the CPAF structure necessitates careful monitoring to ensure taxpayer funds are used efficiently and effectively for the intended advanced technology development.
Public Impact
Impacts national defense capabilities through the development of advanced communication systems. Supports technological innovation in the defense electronics sector. Potential for job creation within General Dynamics and its subcontractors. Ensures U.S. military maintains a technological edge in battlefield communications.
Waste & Efficiency Indicators
Waste Risk Score: 70 / 10
Warning Flags
- Cost Plus Award Fee structure
- Long contract duration
- Advanced technology development risks
Positive Signals
- Full and open competition
- Focus on critical defense technology
Sector Analysis
This contract falls within the Research, Development, Test, and Evaluation (RDTE) sector, specifically for advanced electronics and communication equipment. Spending in this area is critical for maintaining military technological superiority, but often involves higher risk and cost uncertainty compared to procurement of existing technologies.
Small Business Impact
While the prime contractor is General Dynamics, the contract details do not specify the extent of small business participation. Further investigation would be needed to determine if small businesses are being effectively utilized as subcontractors in this advanced technology development effort.
Oversight & Accountability
The contract's Cost Plus Award Fee structure requires robust oversight from the Department of Defense to ensure performance targets are met and costs are controlled. Regular reviews and audits are essential to maintain accountability and prevent potential cost overruns.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Award Fee structure can lead to higher costs.
- Long contract duration increases risk exposure.
- Advanced technology development is inherently risky.
- Potential for scope creep in R&D projects.
- Lack of specific small business participation data.
Tags
engineering-services, department-of-defense, az, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.50 billion to GENERAL DYNAMICS MISSION SYSTEMS, INC.. 200410!005969!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T04CE405 !A!N! !N! ! !20040716!20111230!046863929!046863929!001381284!N!GENERAL DYNAMICS DECISION SYST!8201 E MCDOWELL ROAD !SCOTTSDALE !AZ!85257!65000!013!04!SCOTTSDALE !MARICOPA !ARIZONA !+000010000000!N!N!000000000000!AC63!RDTE/ELECTRONICS&COMMUNICATION EQ-ADV TECH DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !360 !JTRS CLUSTER I !541330!E! !3! ! ! ! ! !99990
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.50 billion.
What is the period of performance?
Start: 2004-07-16. End: 2016-05-31.
What specific performance metrics are used to determine the award fee, and how are they objectively measured?
The specific performance metrics for the award fee are not detailed in the provided data. Typically, for advanced technology development contracts, these metrics would relate to technical milestones, schedule adherence, and cost control. Objective measurement would involve rigorous testing, independent verification of deliverables, and comparison against pre-defined benchmarks. The contracting officer's determination of the fee is crucial for accountability.
What are the primary technical risks associated with the JTRS Cluster I development, and what mitigation strategies are in place?
Primary technical risks likely include achieving desired functionality with new technologies, integration challenges with existing systems, and ensuring reliability under demanding operational conditions. Mitigation strategies would typically involve phased development, rigorous prototyping and testing, independent technical reviews, and contingency planning for potential setbacks. The long duration suggests a phased approach to manage these risks.
How does the advanced technology developed under this contract compare to current commercial off-the-shelf (COTS) communication systems in terms of capability and cost-effectiveness?
The JTRS Cluster I is designed for specialized military applications, likely exceeding COTS capabilities in areas like security, ruggedness, and interoperability across diverse platforms. While COTS might be cheaper initially, the total lifecycle cost and specific military requirements often necessitate custom development. The effectiveness hinges on whether the advanced capabilities justify the development and procurement costs over COTS alternatives.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
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
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 8201 E MCDOWELL ROAD, SCOTTSDALE, AZ, 85257
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $774,199,439
Exercised Options: $774,199,439
Current Obligation: $1,504,359,694
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2004-07-16
Current End Date: 2016-05-31
Potential End Date: 2016-05-31 00:00:00
Last Modified: 2021-02-27
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