Department of Defense awarded $11.1M for MRAP vehicles, with General Dynamics Land Systems as the contractor

Contract Overview

Contract Amount: $11,135,263 ($11.1M)

Contractor: General Dynamics Land Systems - Canada Corporation

Awarding Agency: Department of Defense

Start Date: 2007-02-23

End Date: 2008-12-31

Contract Duration: 677 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIXED PRICE

Sector: Defense

Official Description: PURCAHSE (10) TEN CATEGORY I (CLIN 0001) AND (10) TEN CATEGORY II (CLIN 0002) MRAPS.

Place of Performance

Location: INGHAM County, MICHIGAN, 48901

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $11.1 million to GENERAL DYNAMICS LAND SYSTEMS - CANADA CORPORATION for work described as: PURCAHSE (10) TEN CATEGORY I (CLIN 0001) AND (10) TEN CATEGORY II (CLIN 0002) MRAPS. Key points: 1. The contract value of $11.1 million for 10 MRAP vehicles suggests a significant investment in protected mobility. 2. Full and open competition was utilized, indicating a potentially competitive bidding process for this award. 3. The fixed-price contract type suggests that cost risks are largely borne by the contractor. 4. The delivery order was issued under a larger contract, implying a phased approach to procurement. 5. The contract duration of 677 days points to a substantial period for manufacturing and delivery. 6. The North American Industry Classification System (NAICS) code 336992 covers military armored vehicle manufacturing, placing this contract within a specialized industrial sector.

Value Assessment

Rating: good

The total award of $11.1 million for 10 MRAP vehicles equates to approximately $1.11 million per vehicle. This figure should be benchmarked against other MRAP procurements during the same period to assess value for money. Given the specialized nature and advanced protection features of MRAPs, this cost is within the expected range for such complex military hardware. However, a detailed comparison with similar contracts for vehicles with comparable protection levels and capabilities would provide a more definitive assessment of pricing.

Cost Per Unit: Approximately $1.11 million per vehicle.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The use of full and open competition is a positive indicator for achieving fair market value.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices through market forces, ensuring that the government is not overpaying for essential defense equipment.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will receive enhanced protection through the MRAP vehicles. The services delivered include the manufacturing and delivery of 10 Mine-Resistant Ambush Protected (MRAP) vehicles. The geographic impact is primarily within the United States for manufacturing, with the ultimate deployment of the vehicles likely in operational theaters. Workforce implications include employment within General Dynamics Land Systems - Canada Corporation and its supply chain, particularly in the specialized field of armored vehicle manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if fixed-price contract terms are not strictly managed.
Delivery delays could impact operational readiness if not mitigated.
Dependence on a single contractor for this specific order could pose supply chain risks if not diversified.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust market engagement.
Delivery order under an existing contract may indicate streamlined procurement processes.

Sector Analysis

The defense industrial base, specifically the segment focused on armored vehicle manufacturing, is characterized by high technological barriers to entry and significant capital investment. This contract falls within the broader category of military vehicle production, a sector that experiences fluctuating demand based on geopolitical events and military modernization efforts. Comparable spending benchmarks would involve analyzing other awards for MRAP vehicles or similar protected mobility platforms from different manufacturers and agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As a large prime contract awarded to General Dynamics Land Systems - Canada Corporation, the primary impact on small businesses would be through potential subcontracting opportunities within the prime contractor's supply chain. Further investigation into the prime contractor's subcontracting plan would be necessary to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Accountability measures are embedded within the fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Mine-Resistant Ambush Protected (MRAP) Vehicles Program
Tactical Wheeled Vehicles
Department of Defense Vehicle Procurement
Armored Vehicle Manufacturing Contracts

Risk Flags

Potential for cost overruns
Delivery schedule adherence
Quality control during manufacturing
Supply chain resilience

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.1 million to GENERAL DYNAMICS LAND SYSTEMS - CANADA CORPORATION. PURCAHSE (10) TEN CATEGORY I (CLIN 0001) AND (10) TEN CATEGORY II (CLIN 0002) MRAPS.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS LAND SYSTEMS - CANADA CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.1 million.

What is the period of performance?

Start: 2007-02-23. End: 2008-12-31.

What is the track record of General Dynamics Land Systems - Canada Corporation in delivering military vehicles, particularly MRAPs?

General Dynamics Land Systems (GDLS) has a long-standing reputation as a major defense contractor specializing in armored vehicles. They have been a significant producer of MRAP vehicles for the U.S. military and allied nations, including various models like the Cougar and Buffalo. Their track record includes large-scale production efforts, often under demanding timelines and challenging operational environments. While specific performance metrics for individual contracts are not always publicly available, GDLS has generally been considered a reliable supplier for these critical assets. However, like any large defense contractor, they have faced scrutiny regarding production schedules, cost management, and technical issues on certain programs. For this specific delivery order, the 'good' rating in value assessment suggests a satisfactory performance, but a deeper dive into historical delivery performance and quality control for similar MRAP variants would be beneficial.

How does the per-unit cost of $1.11 million compare to other MRAP procurements during the 2007-2008 period?

The per-unit cost of approximately $1.11 million for these MRAP vehicles awarded in 2007-2008 is relatively high, reflecting the advanced protection and specialized nature of these vehicles. During the peak of MRAP procurement driven by urgent needs in Iraq and Afghanistan, unit costs varied significantly based on the specific MRAP variant, manufacturer, and contract terms. Some earlier or less complex MRAP variants might have been procured for less, potentially in the $500,000 to $800,000 range. However, more heavily armored or specialized versions, especially those incorporating newer technologies or manufactured under fixed-price contracts with significant risk premiums, could approach or exceed $1 million per unit. To provide a precise comparison, one would need to identify contracts for similar MRAP variants (e.g., Category I, II, III) awarded by the Department of Defense around the same timeframe and analyze their unit costs, considering factors like quantity, contract type, and specific survivability features.

What are the primary risks associated with this fixed-price delivery order for MRAP vehicles?

The primary risks associated with this fixed-price delivery order for MRAP vehicles, while generally favorable to the government in terms of cost certainty, include potential contractor underperformance and delivery delays. If General Dynamics Land Systems - Canada Corporation underestimated the costs of production, materials, or labor, they might face financial strain, potentially leading to quality compromises or a push for contract modifications. Conversely, if the fixed price was set too high due to inadequate market research or competitive pressure, the government might overpay. Delivery delays are another significant risk, as the operational readiness of military units depends on timely equipment fielding. The government's recourse in case of delays or quality issues is typically through contract clauses, liquidated damages, or termination, but resolving these issues can be time-consuming and disruptive. Furthermore, the reliance on a single contractor for this specific order introduces supply chain vulnerability if unforeseen disruptions occur.

How effective are MRAP vehicles in fulfilling their intended purpose of protecting personnel from IED threats?

MRAP vehicles were specifically designed and rapidly fielded to address the high casualty rates from Improvised Explosive Devices (IEDs) and ambushes in Iraq and Afghanistan. Their V-shaped hull is engineered to deflect the blast energy of explosions away from the crew compartment, significantly improving survivability compared to traditional armored personnel carriers. Numerous reports and analyses from military sources and defense think tanks have indicated that MRAPs have been highly effective in reducing casualties in convoy operations and patrols where IED threats were prevalent. While not impervious to all threats, their introduction marked a substantial improvement in force protection. Their effectiveness is directly tied to their design features, proper maintenance, and the tactical employment by military units. The continued procurement and fielding of MRAPs underscore their perceived value in enhancing personnel safety in high-threat environments.

What has been the historical spending trend for MRAP vehicles by the Department of Defense?

Historical spending on MRAP vehicles by the Department of Defense has been characterized by a rapid surge followed by a gradual decline. The initial, massive procurement effort occurred between 2007 and 2011, driven by the urgent need to protect troops from IEDs in Iraq and Afghanistan. During this period, billions of dollars were spent acquiring hundreds of thousands of MRAPs across various manufacturers and configurations. Following the drawdown in these theaters and the maturation of the MRAP program, spending decreased significantly. Subsequent spending has focused on sustainment, upgrades, and the procurement of smaller quantities for specific needs or replacement of aging fleets. The initial high spending reflected an emergency response, while later spending reflects more normalized acquisition and lifecycle management processes. This contract falls within the initial surge period, indicating a significant investment during a critical phase of the program.

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: SEALED BID

Offers Received: 10

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 1991 OXFORD ST E BLDG 15, LONDON

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,138,903

Exercised Options: $11,138,903

Current Obligation: $11,135,263

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5028

IDV Type: IDC

Timeline