DoD Awards $680M for Military Vehicles, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $679,920,727 ($679.9M)
Contractor: GM Gdls Defense Group, L.L.C.
Awarding Agency: Department of Defense
Start Date: 2000-11-16
End Date: 2004-08-30
Contract Duration: 1,383 days
Daily Burn Rate: $491.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 17
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200106!000432!2100!AE07 !TACOM - WARREN !DAAE0700DM051 !A!N!*!N!0002 !20001116!20021017!098155158!098155158!098155158!N!GM GDLS DEFENSE GROUP LLC, JOI!14920 TWENTY-THREE MILE RO!SHELBY TOWNSHI !MI!48315!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000578474112!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !332912!*!*!5!A!S! !*!*!*!B!*!*!A! !A !U!J!2!017!B! !A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $679.9 million to GM GDLS DEFENSE GROUP, L.L.C. for work described as: 200106!000432!2100!AE07 !TACOM - WARREN !DAAE0700DM051 !A!N!*!N!0002 !20001116!20021017!098155158!098155158!098155158!N!GM GDLS DEFENSE GROUP LLC, JOI!14920 TWENTY-THREE MILE RO!SHELBY TOWNSHI !MI!48315!76460!099!26!STERLING HEIGHTS !MACOM… Key points: 1. Significant contract value of $679.9M for wheeled trucks and truck tractors. 2. Competition was full and open, indicating a competitive bidding process. 3. Risk of cost overruns exists, with a current variance of $49.1M. 4. Spending falls within the Defense sector, specifically Army procurement.
Value Assessment
Rating: questionable
The contract has a current budget variance of $49.1M, suggesting potential cost overruns. Further analysis is needed to determine the root cause and future implications.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically promotes competitive pricing. However, the significant budget variance raises questions about the effectiveness of price discovery and control.
Taxpayer Impact: The budget variance of $49.1M represents a direct impact on taxpayer funds, necessitating careful oversight to mitigate further losses.
Public Impact
Taxpayers may face increased costs due to the current budget variance. The contract supports the Department of Defense's operational readiness through vehicle procurement. The award to GM GDLS Defense Group LLC highlights a key supplier in the defense manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Budget Variance
- Potential Cost Overruns
Positive Signals
- Full and Open Competition
- Supports Defense Readiness
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of military vehicles. Spending benchmarks for similar armored vehicle contracts would be relevant for comparison.
Small Business Impact
The contract was awarded to GM GDLS Defense Group LLC, a large business. There is no indication of small business participation in this specific award.
Oversight & Accountability
The significant budget variance warrants close oversight to ensure accountability and prevent further financial discrepancies. Regular reporting and performance reviews are crucial.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Significant Budget Variance
- Potential for Cost Overruns
- Lack of Small Business Participation
- Need for Detailed Variance Analysis
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $679.9 million to GM GDLS DEFENSE GROUP, L.L.C.. 200106!000432!2100!AE07 !TACOM - WARREN !DAAE0700DM051 !A!N!*!N!0002 !20001116!20021017!098155158!098155158!098155158!N!GM GDLS DEFENSE GROUP LLC, JOI!14920 TWENTY-THREE MILE RO!SHELBY TOWNSHI !MI!48315!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000578474112!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !332912!*!*!5!A!S! !*!*!*!B!*!*!A!
Who is the contractor on this award?
The obligated recipient is GM GDLS DEFENSE GROUP, L.L.C..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $679.9 million.
What is the period of performance?
Start: 2000-11-16. End: 2004-08-30.
What is the primary driver of the $49.1M budget variance, and what corrective actions are being taken?
The primary driver of the budget variance needs to be thoroughly investigated. Potential causes include unforeseen material cost increases, production delays, or scope creep. Corrective actions should involve a detailed review of the contract's financial performance, renegotiation of terms if necessary, and enhanced monitoring of expenditures to prevent further deviations from the planned budget.
How does the current cost performance compare to industry benchmarks for similar military vehicle production contracts?
Comparing the current cost performance to industry benchmarks is essential for a comprehensive assessment. Without specific benchmark data for comparable military vehicle production contracts, it's difficult to definitively state how this contract fares. However, a variance of $49.1M on a $680M contract suggests a deviation that warrants scrutiny against established industry cost control metrics.
What measures are in place to ensure the long-term effectiveness and reliability of the delivered military vehicles?
Measures to ensure long-term effectiveness and reliability likely include stringent quality control during manufacturing, adherence to technical specifications, and comprehensive testing protocols. Post-delivery, warranty provisions, maintenance schedules, and performance monitoring by the Department of Defense are critical to ensuring the vehicles meet operational requirements throughout their lifecycle.
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: 17
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 48310
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAE0700DM051
IDV Type: IDC
Timeline
Start Date: 2000-11-16
Current End Date: 2004-08-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2018-10-17
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