DoD's $32.4M contract for vehicle parts awarded to Contitech USA, Inc. lacked competition

Contract Overview

Contract Amount: $32,438,337 ($32.4M)

Contractor: Contitech USA, Inc

Awarding Agency: Department of Defense

Start Date: 2008-07-25

End Date: 2009-06-30

Contract Duration: 340 days

Daily Burn Rate: $95.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: VARIOUS TRACK CONFIGURATIONS

Place of Performance

Location: FAIRLAWN, SUMMIT County, OHIO, 44333

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $32.4 million to CONTITECH USA, INC for work described as: VARIOUS TRACK CONFIGURATIONS Key points: 1. The contract's value of $32.4 million was awarded without a competitive bidding process. 2. Performance occurred over a 340-day period, indicating a short-term need. 3. The firm fixed-price contract type suggests price certainty for the government. 4. The award was a delivery order, implying it was part of a larger contract vehicle. 5. The specific part number '336992' points to a specialized component for military vehicles. 6. The contract was awarded to a single vendor, raising questions about potential cost efficiencies.

Value Assessment

Rating: questionable

Benchmarking the value of this specific delivery order is challenging without knowing the broader contract it belongs to or the exact nature of the 'VARIOUS TRACK CONFIGURATIONS'. However, the lack of competition for a $32.4 million award warrants scrutiny. Without competitive bids, it's difficult to ascertain if the government secured the best possible price and value for these specialized vehicle components. The firm fixed-price nature provides cost certainty, but the absence of market comparison makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source procurement, meaning only one vendor, Contitech USA, Inc., was solicited. The data indicates it was 'NOT COMPETED'. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price discovery and potentially higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the cost savings that a competitive bidding process could have generated. Without multiple offers, the government had limited leverage to negotiate the lowest possible price for these critical vehicle components.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units utilizing armored vehicles requiring track configurations. The services delivered involve the supply of specialized vehicle components, ensuring the operational readiness of military equipment. The geographic impact is primarily within the United States, supporting military logistics and maintenance operations. Workforce implications are likely within the manufacturing and supply chain sectors related to defense contracting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant dollar amount raises concerns about potential overpayment.
The sole-source nature limits transparency into the pricing structure and justification.
Without competitive benchmarking, assessing the true value for money is difficult.

Positive Signals

The firm fixed-price contract type offers budget predictability.
The award was a delivery order, suggesting it fits within an existing framework, potentially indicating some level of prior vetting.
The contract was awarded to Contitech USA, Inc., a known entity in the manufacturing sector.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing and supply of components for military vehicles. The market for such specialized parts is often characterized by a limited number of qualified suppliers due to stringent technical requirements and security clearances. Comparable spending benchmarks are difficult to establish without more detail on the specific 'VARIOUS TRACK CONFIGURATIONS' and the broader contract vehicle, but spending in this niche can be substantial given the critical nature of military equipment.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to a specific large manufacturer, it is unlikely to have directly benefited the small business ecosystem. Further investigation would be needed to determine if Contitech USA, Inc. has any subcontracting plans that would involve small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Logistics Agency (DLA), which awarded the contract. Accountability measures are inherent in the firm fixed-price structure, which caps the government's liability. Transparency is limited due to the sole-source nature of the award, making detailed public scrutiny of the procurement process challenging. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Vehicle Parts Procurement
Defense Logistics Agency Contracts
Armored Vehicle Component Manufacturing
Sole-Source Defense Contracts
Department of Defense Supply Chain Management

Risk Flags

Sole-source award for a significant dollar amount
Lack of competitive bidding process
Limited transparency into pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.4 million to CONTITECH USA, INC. VARIOUS TRACK CONFIGURATIONS

Who is the contractor on this award?

The obligated recipient is CONTITECH USA, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $32.4 million.

What is the period of performance?

Start: 2008-07-25. End: 2009-06-30.

What specific 'VARIOUS TRACK CONFIGURATIONS' were procured under this contract, and what is their criticality to military operations?

The specific 'VARIOUS TRACK CONFIGURATIONS' procured under contract number 336992 are not detailed in the provided data. However, given the context of the Defense Logistics Agency (DLA) and the contractor's specialization, these likely refer to track systems or components for armored vehicles such as tanks or personnel carriers. The criticality of such components to military operations is extremely high, as they are essential for mobility in diverse terrains and combat environments. Failure of track systems can render vehicles immobile, impacting mission effectiveness, troop safety, and logistical support. Therefore, ensuring a reliable supply of these parts is a key concern for the Department of Defense.

What is the justification for awarding this $32.4 million contract on a sole-source basis?

The provided data states the contract was 'NOT COMPETED' and awarded as a sole-source procurement. Without further documentation, the specific justification for this sole-source award is unknown. Common justifications for sole-source contracts include situations where only one responsible source can provide the required supplies or services, such as when there is a unique capability, a critical need that cannot be met through competition, or when follow-on work is required under specific conditions. For a contract valued at $32.4 million, a robust justification would typically be required by federal procurement regulations, often involving a Justification and Approval (J&A) document that outlines why competition is not feasible or not in the government's best interest.

How does the firm fixed-price contract type impact the risk and cost for the government in this sole-source award?

The firm fixed-price (FFP) contract type shifts the majority of the cost risk to the contractor, Contitech USA, Inc. This means the government agrees to pay a set price for the 'VARIOUS TRACK CONFIGURATIONS,' regardless of the contractor's actual costs incurred. For the government, this provides significant budget certainty and predictability, as the total expenditure is known upfront. However, in a sole-source scenario, the 'firm' aspect of the price is less influenced by market competition. While the FFP structure protects the government from cost overruns, the absence of competition means the initial negotiated price might not reflect the lowest possible market rate, potentially leading to a higher overall cost compared to a competitively awarded contract.

What is the track record of Contitech USA, Inc. in supplying similar components to the Department of Defense?

The provided data indicates that Contitech USA, Inc. was awarded this contract. While the data does not detail their broader track record, Contitech is known as a manufacturer of technical components, including conveyor belts and automotive parts. Their involvement in supplying components for military vehicles suggests they possess the necessary manufacturing capabilities and quality control systems to meet defense requirements. A comprehensive assessment of their track record would involve reviewing their past performance on other government contracts, including on-time delivery, quality of goods, and overall customer satisfaction ratings, which are typically available through government databases like the Contractor Performance Assessment Reporting System (CPARS).

What is the historical spending pattern for 'VARIOUS TRACK CONFIGURATIONS' or similar military vehicle components by the Defense Logistics Agency?

The provided data focuses on a single delivery order valued at $32.4 million for 'VARIOUS TRACK CONFIGURATIONS' under contract number 336992. It does not provide historical spending patterns for this specific item or category by the Defense Logistics Agency (DLA). To understand historical spending, one would need to access broader federal procurement databases (e.g., FPDS-NG, SAM.gov) and analyze DLA's spending on similar North American Industry Classification System (NAICS) codes or Product Service Codes (PSCs) related to military vehicle components over several fiscal years. This analysis would reveal trends in contract values, types of awards (competitive vs. sole-source), and key contractors within this segment of the defense supply chain.

Industry Classification

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

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 703 S CLEVELAND MASSILLON RD, FAIRLAWN, OH, 44333

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $32,438,337

Exercised Options: $32,438,337

Current Obligation: $32,438,337

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV08D0072

IDV Type: IDC

Timeline