Department of the Army awards $70.4M contract for military vehicles and training to LOC Performance Products LLC

Contract Overview

Contract Amount: $70,400,386 ($70.4M)

Contractor: LOC Performance Products LLC

Awarding Agency: Department of Defense

Start Date: 2014-06-25

End Date: 2016-10-07

Contract Duration: 835 days

Daily Burn Rate: $84.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 504 VEHICLES ; 9 LOTS OF NET TRAINING ; 1 LOT OF ASL, BII, STTE AND 4 LOTS OF TRAINING MATERIALS

Place of Performance

Location: PLYMOUTH, WAYNE County, MICHIGAN, 48170

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $70.4 million to LOC PERFORMANCE PRODUCTS LLC for work described as: 504 VEHICLES ; 9 LOTS OF NET TRAINING ; 1 LOT OF ASL, BII, STTE AND 4 LOTS OF TRAINING MATERIALS Key points: 1. Contract awarded to a single vendor, raising questions about competitive pricing. 2. The contract covers a significant quantity of vehicles and training materials. 3. Delivery orders indicate a flexible approach to fulfilling requirements. 4. The duration of the contract suggests a long-term need for these assets. 5. Fixed-price contract type aims to control costs for the government. 6. The award falls under the manufacturing of military armored vehicles and components.

Value Assessment

Rating: fair

The total award amount of $70.4 million for 504 vehicles and associated training is substantial. Benchmarking the value requires detailed cost breakdowns for each vehicle type and training module, which are not readily available. Without comparable contract data for similar vehicle platforms and training packages, a precise value-for-money assessment is challenging. However, the fixed-price nature of the contract provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the data provided does not specify the number of bids received. A high number of bidders typically leads to more competitive pricing and better value for the government. The absence of specific bidder numbers makes it difficult to fully assess the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of offers, potentially driving down prices and increasing innovation.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize the armored vehicles and receive the specialized training. The contract delivers essential military hardware and comprehensive training programs. The geographic impact is primarily within the Department of the Army's operational theaters. Workforce implications include potential manufacturing jobs related to vehicle production and training personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific competition details limits assessment of price competitiveness.
Potential for cost overruns if scope significantly expands beyond initial estimates.
Dependence on a single contractor for a large quantity of critical assets.

Positive Signals

Awarded under full and open competition.
Fixed-price contract type offers cost control.
Delivery orders allow for phased acquisition and flexibility.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on military armored vehicles and associated training. The market for such specialized equipment is dominated by a few large defense contractors. Spending in this area is driven by national security requirements and military modernization efforts. Comparable spending benchmarks would involve analyzing other large vehicle procurement contracts within the Department of Defense.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small businesses through set-asides is minimal. However, the prime contractor, LOC Performance Products LLC, may engage small businesses as subcontractors for components or services, which would contribute to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and performance specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tactical Wheeled Vehicles
Military Training Services
Defense Procurement
Armored Vehicle Manufacturing

Risk Flags

Potential for cost overruns if scope expands.
Risk of technology obsolescence.
Dependence on single contractor's performance.
Limited visibility into specific competition details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.4 million to LOC PERFORMANCE PRODUCTS LLC. 504 VEHICLES ; 9 LOTS OF NET TRAINING ; 1 LOT OF ASL, BII, STTE AND 4 LOTS OF TRAINING MATERIALS

Who is the contractor on this award?

The obligated recipient is LOC PERFORMANCE PRODUCTS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $70.4 million.

What is the period of performance?

Start: 2014-06-25. End: 2016-10-07.

What is the historical spending pattern for similar military vehicle procurements by the Department of the Army?

Analyzing historical spending for similar military vehicle procurements by the Department of the Army reveals a consistent demand for armored platforms, often involving multi-year contracts with significant dollar values. For instance, previous awards for Mine-Resistant Ambush Protected (MRAP) vehicles or Stryker combat vehicles have amounted to billions of dollars over their lifecycles. These procurements frequently involve complex manufacturing processes and extensive testing, leading to high per-unit costs. The trend often shows a preference for full and open competition, though sole-source awards can occur for specialized or urgent needs. The Army's spending in this category is directly tied to evolving threat assessments and force modernization strategies, with budgets fluctuating based on geopolitical events and defense priorities.

How does the per-unit cost of the vehicles in this contract compare to market rates for comparable commercial or military vehicles?

Determining the precise per-unit cost for the 504 vehicles under this contract is challenging without a detailed breakdown of vehicle types and configurations. However, military-grade armored vehicles are inherently more expensive than their commercial counterparts due to specialized armor, survivability features, and ruggedized components designed for extreme operational environments. If these are highly specialized armored vehicles, the per-unit cost could range from hundreds of thousands to over a million dollars each, depending on the level of protection and capabilities. Benchmarking against publicly available data for similar military platforms, such as variants of the Stryker or JLTV, would be necessary for a meaningful comparison. Without such specific data, a definitive comparison to market rates is not feasible.

What are the specific risks associated with a contract of this size and duration for military vehicles and training?

Contracts of this magnitude and duration for military vehicles and training carry several inherent risks. Firstly, there's the risk of cost escalation if unforeseen technical challenges arise during production or if material costs increase significantly over the contract period, despite the fixed-price nature. Secondly, obsolescence is a concern; military technology evolves rapidly, and the vehicles procured might become outdated before the end of their intended service life. Thirdly, performance risks exist, where the vehicles or training may not meet the stringent operational requirements or reliability standards expected by the Army. Finally, contractor performance risk is present; the sole awardee might face production delays, quality control issues, or financial instability, potentially disrupting the supply of critical assets.

What is the track record of LOC Performance Products LLC in delivering similar military hardware and training?

Information regarding LOC Performance Products LLC's specific track record in delivering large-scale military vehicle contracts and comprehensive training packages is not detailed in the provided data. A thorough assessment would require reviewing their past performance on similar government contracts, including on-time delivery, adherence to specifications, and overall quality of products and services. Examining contract award histories, past performance reviews, and any documented issues or successes would provide a clearer picture of their capabilities and reliability as a prime contractor for the Department of the Army.

How does the 'delivery order' (aw: DELIVERY ORDER) contract type affect cost control and flexibility for the Department of the Army?

The 'delivery order' contract type, often used within a larger indefinite-delivery, indefinite-quantity (IDIQ) or similar framework, provides significant flexibility for the Department of the Army. It allows the agency to order specific quantities of goods or services as needed, up to a certain ceiling, rather than committing to a fixed quantity upfront. This is advantageous for managing fluctuating requirements and adapting to changing operational needs. For cost control, delivery orders are typically issued at pre-negotiated prices, which can help maintain cost predictability. However, the overall cost is determined by the total quantity ordered, and if the maximum potential quantity is exercised, the total expenditure could be substantial. It allows for phased funding and acquisition, aligning spending with actual needs and available budget.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13505 N HAGGERTY RD, PLYMOUTH, MI, 48170

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $70,400,386

Exercised Options: $70,400,386

Current Obligation: $70,400,386

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV14D0074

IDV Type: IDC

Timeline