DoD awards $474M for 2,090 HMMWVs to AM General LLC for Afghanistan support
Contract Overview
Contract Amount: $474,024,688 ($474.0M)
Contractor: AM General LLC
Awarding Agency: Department of Defense
Start Date: 2017-08-29
End Date: 2020-03-06
Contract Duration: 920 days
Daily Burn Rate: $515.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DELIVERY ORDER 0001 IS FOR 2,090 HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLES IN SUPPORT OF THE GOVERNMENT OF AFGHANISTAN.
Place of Performance
Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $474.0 million to AM GENERAL LLC for work described as: DELIVERY ORDER 0001 IS FOR 2,090 HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLES IN SUPPORT OF THE GOVERNMENT OF AFGHANISTAN. Key points: 1. Significant investment in military vehicles for foreign aid. 2. AM General LLC is a key supplier for HMMWVs. 3. Risk of misuse or loss of equipment in a volatile region. 4. Spending falls within the Defense sector, specifically armored vehicle manufacturing.
Value Assessment
Rating: fair
The total award of $474M for 2,090 vehicles suggests a per-unit cost of approximately $226,782. This price needs comparison against similar HMMWV procurements and configurations to assess value.
Cost Per Unit: $226,782
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. Without competition, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayer funds are used for this procurement, and the lack of competition may result in a less favorable price than could have been achieved through a competitive process.
Public Impact
Supports U.S. foreign policy objectives by providing essential military equipment. Enhances the operational capabilities of allied forces. Potential for equipment to be captured or fall into the wrong hands. Contributes to the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Geopolitical risk in Afghanistan
- Potential for equipment diversion
Positive Signals
- Supports allied forces
- Procurement from established manufacturer
Sector Analysis
This spending is within the Defense sector, specifically the manufacturing of military vehicles. Benchmarks for similar HMMWV procurements would be necessary for a precise value assessment.
Small Business Impact
The prime contractor, AM General LLC, is a large business. There is no indication of small business participation in this specific delivery order.
Oversight & Accountability
The Department of the Army, under the Department of Defense, is responsible for oversight. The lack of competition warrants close monitoring to ensure fair pricing and proper accountability for the delivered assets.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- High-value contract
- Delivery to a conflict zone
- Lack of transparency on pricing justification
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, in, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $474.0 million to AM GENERAL LLC. DELIVERY ORDER 0001 IS FOR 2,090 HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLES IN SUPPORT OF THE GOVERNMENT OF AFGHANISTAN.
Who is the contractor on this award?
The obligated recipient is AM GENERAL 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 $474.0 million.
What is the period of performance?
Start: 2017-08-29. End: 2020-03-06.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves specific circumstances like unique capabilities or urgent needs. Without further details, it's difficult to assess the fairness of pricing. However, the government should have conducted a price analysis based on historical data, commercial pricing, or other available information to validate the reasonableness of the $474M award.
What are the specific risks associated with delivering these vehicles to Afghanistan, and what mitigation strategies are in place?
Risks include potential loss, theft, or diversion of the vehicles due to the volatile security environment and ongoing conflict. Mitigation strategies might involve strict accountability measures, end-use monitoring agreements with Afghan forces, and security protocols during delivery and handover to prevent unauthorized access or misuse.
How does the per-unit cost compare to similar HMMWV procurements, and does this indicate potential overpricing due to the lack of competition?
The per-unit cost of approximately $226,782 needs to be benchmarked against historical data for similar HMMWV configurations and quantities. If this price is significantly higher than comparable contracts awarded competitively, it could indicate overpricing resulting from the sole-source nature of this award, necessitating further investigation.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Macandrews & Forbes Holdings Inc. (UEI: 878304849)
Address: 105 N NILES AVE, SOUTH BEND, IN, 46617
Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $474,024,688
Exercised Options: $474,024,688
Current Obligation: $474,024,688
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV17D0071
IDV Type: IDC
Timeline
Start Date: 2017-08-29
Current End Date: 2020-03-06
Potential End Date: 2020-03-06 12:03:00
Last Modified: 2020-03-02
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