DoD Awards $20.3M for Abrams Tank Transmissions, Sole-Sourced to Allison Transmission Inc

Contract Overview

Contract Amount: $20,323,671 ($20.3M)

Contractor: Allison Transmission Inc

Awarding Agency: Department of Defense

Start Date: 2008-09-19

End Date: 2011-02-28

Contract Duration: 892 days

Daily Burn Rate: $22.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SEP 180 TRANSMISSIONS IN SUPPORT OF THE ABRAMS RESET PROGRAM.

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $20.3 million to ALLISON TRANSMISSION INC for work described as: SEP 180 TRANSMISSIONS IN SUPPORT OF THE ABRAMS RESET PROGRAM. Key points: 1. Significant investment in Abrams tank modernization program. 2. Sole-source award to incumbent supplier raises competition concerns. 3. Long-term contract duration may impact price flexibility. 4. Focus on critical defense hardware underscores sector importance.

Value Assessment

Rating: fair

The contract value of $20.3 million for 180 transmissions appears reasonable given the specialized nature of military hardware. However, without competitive bidding, it's difficult to definitively assess if this represents the best possible price.

Cost Per Unit: $112,909

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning only one vendor was considered. This approach limits price discovery and potentially leads to higher costs compared to a competitive process.

Taxpayer Impact: Taxpayer funds are utilized for a critical defense component, but the lack of competition may result in a less efficient use of those funds.

Public Impact

Ensures operational readiness of Abrams main battle tanks. Supports a key defense contractor and its supply chain. Potential for higher costs due to sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Long contract duration.
Lack of transparency in pricing.

Positive Signals

Supports critical defense capability.
Utilizes established supplier for critical component.

Sector Analysis

This contract falls within the Defense sector, specifically related to vehicle manufacturing and maintenance. Spending benchmarks for such specialized military components are often high due to unique requirements and limited suppliers.

Small Business Impact

The data indicates this contract was not awarded to small businesses. The prime contractor, Allison Transmission Inc., is a large, established entity, suggesting no direct benefit to the small business sector from this specific award.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and justification for not pursuing competitive options. Oversight should focus on the necessity of this approach and potential future competition.

Related Government Programs

Motor Vehicle Body Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.3 million to ALLISON TRANSMISSION INC. SEP 180 TRANSMISSIONS IN SUPPORT OF THE ABRAMS RESET PROGRAM.

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $20.3 million.

What is the period of performance?

Start: 2008-09-19. End: 2011-02-28.

What is the justification for the sole-source award, and have alternatives been explored?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. For this contract, the specific reason for not competing needs to be thoroughly documented by the Department of the Army to ensure taxpayer funds are being used responsibly and that the government has explored all avenues for competitive procurement.

How does the per-unit cost compare to similar transmissions or previous contracts?

Benchmarking the per-unit cost of $112,909 against similar military or commercial transmissions is crucial. Without access to historical data or competitor pricing, it's challenging to determine if this price is optimal. A detailed cost analysis by the agency is necessary to validate the reasonableness of this figure.

What is the long-term impact of this sole-source award on the Abrams program's cost-effectiveness?

A sole-source award, especially over a long duration, can lead to higher costs over time if the supplier does not face competitive pressure to innovate or reduce prices. This could impact the overall cost-effectiveness of the Abrams reset program, potentially requiring future budget adjustments or re-evaluation of procurement strategies.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Motor Vehicle Body Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Allison Transmission Inc. (UEI: 969132880)

Address: ONE ALLISON WAY, INDIANAPOLIS, IN, 46222

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: $20,323,671

Exercised Options: $20,323,671

Current Obligation: $20,323,671

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV08D0159

IDV Type: IDC

Timeline