DoD Awards $655M for Stryker Vehicle Production, Lacking Competition

Contract Overview

Contract Amount: $654,759,359 ($654.8M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2018-03-22

End Date: 2021-05-31

Contract Duration: 1,166 days

Daily Burn Rate: $561.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: THIS CONTRACT IS FOR THE PRODUCTION OF DVH A1 ECP STRYKER VEHICLES. THE PURPOSE OF THIS AWARD IS TO ESTABLISH DELIVERY ORDER 0002 AND CALL UP 30 ICVVS IN ORDERING PERIOD 2.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $654.8 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: THIS CONTRACT IS FOR THE PRODUCTION OF DVH A1 ECP STRYKER VEHICLES. THE PURPOSE OF THIS AWARD IS TO ESTABLISH DELIVERY ORDER 0002 AND CALL UP 30 ICVVS IN ORDERING PERIOD 2. Key points: 1. Significant award for armored vehicle production, highlighting defense spending. 2. Sole-source nature raises questions about price discovery and potential overspending. 3. Focus on a specific vehicle platform (Stryker) indicates specialized military needs. 4. Limited competition suggests potential for higher costs compared to a competitive environment.

Value Assessment

Rating: questionable

The contract value of $654.8 million for 30 ICVVS is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts or market rates to assess if the pricing is optimal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers as there is no market pressure to drive down prices.

Taxpayer Impact: The lack of competition in this large award means taxpayers may not be receiving the best possible price for these military vehicles.

Public Impact

Taxpayers fund the production of critical military hardware. The award impacts the defense manufacturing sector and associated supply chains. Lack of competition may influence future sole-source contract negotiations. Ensuring efficient use of funds for defense procurement is a public interest.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value

Positive Signals

Production of essential military vehicles
Established manufacturer

Sector Analysis

This contract falls within the Defense sector, specifically military armored vehicle manufacturing. Spending benchmarks in this area are often high due to specialized technology and R&D, but competition is key to controlling costs.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). The prime contractor is a large entity, suggesting limited direct opportunities for small businesses through this specific award, though they may be subcontractors.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. Accountability mechanisms should be in place to justify the lack of competition and validate the final cost.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited transparency in price negotiation
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $654.8 million to GENERAL DYNAMICS LAND SYSTEMS INC.. THIS CONTRACT IS FOR THE PRODUCTION OF DVH A1 ECP STRYKER VEHICLES. THE PURPOSE OF THIS AWARD IS TO ESTABLISH DELIVERY ORDER 0002 AND CALL UP 30 ICVVS IN ORDERING PERIOD 2.

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 $654.8 million.

What is the period of performance?

Start: 2018-03-22. End: 2021-05-31.

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

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Agencies must conduct thorough market research and price analyses to ensure fair and reasonable pricing, even without competition. Documentation of these efforts is crucial for accountability and demonstrating responsible stewardship of taxpayer funds.

How does the unit cost of these Stryker vehicles compare to previous awards or similar platforms procured competitively?

Without competitive benchmarks, a direct comparison is challenging. However, analyzing historical data for the same or similar Stryker variants, or comparing to other armored personnel carriers procured through competitive means, could provide an indicative range. Any significant deviation from established price trends would necessitate further investigation into cost drivers.

What is the long-term strategy for procuring these vehicles, and will future requirements be subject to competition?

The long-term strategy is critical for ensuring sustained capability and cost-effectiveness. Agencies should outline plans for future procurements, including timelines for market research to identify potential competitors and strategies to foster competition where feasible. This proactive approach helps avoid recurring sole-source awards and maximizes value.

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: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $654,759,359

Exercised Options: $654,759,359

Current Obligation: $654,759,359

Subaward Activity

Number of Subawards: 1327

Total Subaward Amount: $1,642,782,941

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV17DB020

IDV Type: IDC

Timeline