DoD's $426.7M MRAP contract awarded to General Dynamics for armored vehicle manufacturing

Contract Overview

Contract Amount: $426,657,738 ($426.7M)

Contractor: General Dynamics Land Systems - Canada Corporation

Awarding Agency: Department of Defense

Start Date: 2007-08-07

End Date: 2012-01-26

Contract Duration: 1,633 days

Daily Burn Rate: $261.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CATEGORY II MRAP VARIANT S.A.

Place of Performance

Location: LANSING, INGHAM County, MICHIGAN, 48901

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $426.7 million to GENERAL DYNAMICS LAND SYSTEMS - CANADA CORPORATION for work described as: CATEGORY II MRAP VARIANT S.A. Key points: 1. Value for money assessed through benchmarking against similar armored vehicle procurements. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract duration and potential for cost overruns in complex manufacturing. 4. Performance context is within the Department of the Navy's need for protected mobility. 5. Sector positioning is within the defense industrial base for armored vehicle production.

Value Assessment

Rating: fair

The total contract value of $426.7 million for MRAP variants appears substantial. Benchmarking against similar large-scale armored vehicle procurements is crucial to determine if the pricing reflects fair market value. Without specific per-unit cost data or comparisons to other similar contracts, a definitive value assessment is challenging. However, the scale of the award suggests significant investment in specialized military hardware.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, suggesting that multiple vendors were eligible to bid. The presence of 10 bids indicates a healthy level of interest and competition for this requirement. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of securing the best possible price and value for the required armored vehicles.

Public Impact

The primary beneficiaries are the U.S. military personnel who will utilize the MRAP vehicles for enhanced protection in combat zones. The contract delivers essential armored vehicles designed to withstand explosive threats, improving soldier survivability. Geographic impact is primarily focused on military deployment locations, with manufacturing likely occurring within the contractor's facilities. Workforce implications include job creation and sustainment within the defense manufacturing sector, particularly in Michigan where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in complex defense manufacturing programs.
Risk of scope creep or changes in requirements impacting cost and timeline.
Dependence on a single prime contractor for a critical defense capability.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Contractor has experience in manufacturing military vehicles.
Fixed-price contract type can help control costs if well-defined.

Sector Analysis

The defense industrial base for military vehicles is a specialized sector characterized by high barriers to entry, significant R&D investment, and long production cycles. This contract for MRAP variants fits within the broader category of military armored vehicle manufacturing. Comparable spending benchmarks would involve analyzing other large-scale procurements of tactical and strategic vehicles by the Department of Defense and allied nations.

Small Business Impact

While this contract was awarded to a large prime contractor, it's important to assess subcontracting opportunities for small businesses. Defense manufacturing often relies on a complex supply chain, and large contracts can provide significant work for specialized small businesses. Further analysis would be needed to determine the extent of small business participation and any specific set-aside provisions or goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures would include performance metrics, delivery schedules, and quality control. Transparency is facilitated through contract award databases, though detailed operational performance data may be restricted. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Mine-Resistant Ambush Protected (MRAP) Vehicles
Tactical Wheeled Vehicles
Department of Defense Vehicle Procurement
Naval Sea Systems Command (NAVSEA) Contracts

Risk Flags

Potential for cost overruns in complex manufacturing
Schedule delays in defense production
Supply chain vulnerability for specialized components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $426.7 million to GENERAL DYNAMICS LAND SYSTEMS - CANADA CORPORATION. CATEGORY II MRAP VARIANT S.A.

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 $426.7 million.

What is the period of performance?

Start: 2007-08-07. End: 2012-01-26.

What is the historical spending trend for MRAP vehicles by the Department of the Navy?

Historical spending on MRAP vehicles by the Department of the Navy has been significant, particularly during periods of active conflict requiring enhanced force protection. The initial surge in MRAP procurement occurred in the mid-to-late 2000s in response to battlefield threats in Iraq and Afghanistan. Subsequent spending has focused on sustainment, upgrades, and the procurement of newer variants or replacement platforms. Analyzing specific annual outlays, contract types, and awarded quantities over the past decade would reveal trends in demand, technological evolution, and the overall investment in this critical capability. This particular contract, awarded in 2007, falls within the initial major procurement phase.

How does the per-unit cost of these MRAP variants compare to other similar armored vehicle procurements?

Determining the precise per-unit cost for these MRAP variants requires access to detailed contract line item numbers (CLINs) and quantities, which are not fully detailed in the provided data. However, MRAP vehicles, due to their specialized design for survivability against IEDs and ambushes, generally command a higher per-unit cost than standard tactical wheeled vehicles. Comparisons would need to be made with other MRAP variants (e.g., Cougar, Buffalo, MaxxPro) procured by the DoD, as well as other mine-resistant vehicles. Factors such as survivability features, payload capacity, and technological integration significantly influence these costs. Without specific unit pricing data for this contract, a direct comparison is speculative, but the overall $426.7 million award suggests a substantial investment per vehicle.

What is General Dynamics Land Systems - Canada Corporation's track record with large defense vehicle contracts?

General Dynamics Land Systems (GDLS), the parent entity, has a long and extensive track record of delivering large-scale, complex defense vehicle programs for the U.S. military and allied nations. This includes iconic platforms like the Abrams Main Battle Tank and the Stryker family of vehicles. GDLS - Canada Corporation, as a subsidiary, would leverage this corporate expertise. Their history involves managing multi-billion dollar contracts, navigating intricate supply chains, and meeting stringent military specifications. While specific performance details for every contract are not publicly available, GDLS is generally considered a reliable, albeit expensive, supplier of armored fighting vehicles. Their involvement in the MRAP program, even if through a specific variant or subsidiary, aligns with their core capabilities.

What are the primary risks associated with the manufacturing and delivery of MRAP vehicles under this contract?

The primary risks associated with manufacturing and delivering MRAP vehicles under this contract are multifaceted. Firstly, manufacturing complexity: MRAP vehicles are highly specialized, requiring advanced materials, precise engineering, and robust testing to meet survivability standards. Any deviation can lead to performance issues or safety concerns. Secondly, supply chain disruptions: The defense industrial base relies on a complex network of suppliers for components, and disruptions (due to geopolitical events, material shortages, or quality issues) can delay production. Thirdly, technological obsolescence or evolving threats: Military requirements can change rapidly based on battlefield intelligence. If the MRAP variants procured become less effective against emerging threats, the investment could be diminished. Finally, cost overruns: Despite a firm fixed-price structure, unforeseen technical challenges or material cost increases can strain the contractor's margins and potentially lead to requests for contract modifications or disputes, impacting the overall cost to the government.

How has the demand for MRAP vehicles evolved since this contract was awarded in 2007?

The demand for MRAP vehicles has evolved significantly since this contract's award in August 2007. At that time, the urgent need was driven by high casualty rates from roadside bombs in Iraq and Afghanistan. MRAPs were rapidly fielded as a solution. Following the peak of these conflicts, the demand shifted from rapid, large-scale procurement to sustainment, modernization, and eventual replacement. As U.S. military operations changed and focus shifted, the sheer number of MRAPs required decreased, leading to reduced production lines and increased focus on upgrading existing fleets or procuring more versatile platforms. This contract represents a key moment in the initial, high-demand phase of MRAP acquisition.

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: FIRM 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: $426,657,738

Exercised Options: $426,657,738

Current Obligation: $426,657,738

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5028

IDV Type: IDC

Timeline