DoD Awards $524.8M for Stryker Combat Vehicles, Sole-Source Contract Raises Concerns

Contract Overview

Contract Amount: $524,816,278 ($524.8M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2006-07-28

End Date: 2012-09-30

Contract Duration: 2,256 days

Daily Burn Rate: $232.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: 200610!007963!2100!W56HZV!TACOM - WARREN !W56HZV06G0006 !A!N! !N!0002 ! !20060728!20070630!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND RD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000045719282!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !299 !STRYKER (IAV) !336992!E! !4! ! ! ! ! !99990909!B! ! !A! !D!Y!S!1!001!N!1G!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $524.8 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: 200610!007963!2100!W56HZV!TACOM - WARREN !W56HZV06G0006 !A!N! !N!0002 ! !20060728!20070630!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND RD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACO… Key points: 1. The Department of Defense awarded a significant contract for Stryker combat vehicles. 2. General Dynamics Land Systems is the sole contractor, indicating a lack of competition. 3. The contract's sole-source nature raises questions about price discovery and taxpayer value. 4. The sector is critical for military modernization, but procurement methods warrant scrutiny.

Value Assessment

Rating: questionable

The contract value of $524.8 million is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar armored vehicle procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this large award may result in taxpayers paying a premium for these combat vehicles.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The reliance on a single supplier could impact future innovation and cost-effectiveness. This contract highlights potential vulnerabilities in the DoD's procurement strategy for critical defense assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competition
Potential for overpayment

Positive Signals

Essential military hardware procurement
Supports defense industrial base

Sector Analysis

This contract falls within the Defense sector, specifically for armored combat vehicles. Spending benchmarks for such specialized military equipment are highly variable and depend on technological advancements and geopolitical needs.

Small Business Impact

There is no indication in the data that small businesses were involved in this specific contract award. Further analysis would be needed to determine if subcontracting opportunities were made available.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government is receiving the best possible value and that the contractor is meeting all performance requirements.

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 limits competition.
Potential for inflated pricing.
Lack of transparency in price negotiation.
Dependency on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $524.8 million to GENERAL DYNAMICS LAND SYSTEMS INC.. 200610!007963!2100!W56HZV!TACOM - WARREN !W56HZV06G0006 !A!N! !N!0002 ! !20060728!20070630!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND RD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000045719282!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !299 !STRYKER (IAV) !336992!E! !4! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS LAND SYSTEMS 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 $524.8 million.

What is the period of performance?

Start: 2006-07-28. End: 2012-09-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or circumstances where only one source can fulfill the requirement. Without specific documentation, it's presumed the Department of Defense had reasons for this approach. However, robust price negotiation and cost analysis are crucial to mitigate the risks associated with limited competition and ensure taxpayer funds are used efficiently.

What are the long-term risks associated with relying on a single supplier for critical combat vehicles like the Stryker?

Long-term risks include potential price escalation due to lack of competition, reduced innovation as the sole supplier faces no market pressure, and supply chain vulnerabilities if the single supplier experiences production issues. This dependency can also limit the government's flexibility in adopting new technologies or seeking alternative solutions.

How does the cost of this contract compare to similar armored vehicle procurements, and what is the estimated taxpayer impact of the sole-source award?

Without competitive bids, a direct cost comparison is challenging. However, sole-source contracts are generally expected to be more expensive than competitively awarded ones. The estimated taxpayer impact is a potential overpayment, the magnitude of which would require a detailed cost analysis by the DoD or an independent auditor.

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

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 38500 MOUND RD, STERLING HEIGH, MI, 48310

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV06G0006

IDV Type: IDC

Timeline