DoD awards $49.9M for vehicle track configurations, with no competition

Contract Overview

Contract Amount: $49,924,792 ($49.9M)

Contractor: Contitech USA, Inc

Awarding Agency: Department of Defense

Start Date: 2008-09-25

End Date: 2010-07-31

Contract Duration: 674 days

Daily Burn Rate: $74.1K/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 $49.9 million to CONTITECH USA, INC for work described as: VARIOUS TRACK CONFIGURATIONS. Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery. 2. High value contract for specialized military vehicle components. 3. Long performance period suggests a critical, ongoing need. 4. Sole-source award indicates potential barriers to entry for competitors. 5. Fixed-price contract type shifts risk to the contractor. 6. Contractor is a single entity, limiting broader market engagement.

Value Assessment

Rating: questionable

The contract value of $49.9 million for vehicle track configurations is substantial. However, without competitive bidding, it is difficult to benchmark the value for money. The fixed-price nature of the contract suggests that the contractor bears the cost risk, which can be favorable for the government if the price is well-negotiated. Given the sole-source nature, a thorough review of historical pricing and justification for the award is necessary to assess true value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government compared to a fully competed contract. The absence of competition suggests that either Contitech USA, Inc. is the only capable provider or that the justification for a sole-source award was deemed sufficient by the agency.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as competition is a key driver for cost savings in government procurement.

Public Impact

The Department of the Army benefits from the supply of critical vehicle track configurations. Military readiness and operational capabilities are supported by this procurement. The contract impacts the manufacturing sector, specifically within defense logistics. Employment within Contitech USA, Inc. and its supply chain is supported.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially inflates costs.
Lack of transparency in the procurement process due to no-bid award.
Potential for contractor lock-in given the specialized nature of the product.

Positive Signals

Fixed-price contract shifts cost risk to the contractor.
Long-term contract indicates a stable and predictable need for the product.
Award to a single, established supplier may ensure product consistency.

Sector Analysis

The defense industrial base relies on specialized manufacturers for critical components like vehicle tracks. This contract falls within the broader 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' sector. The market for such specialized parts is often concentrated among a few key players due to high technical barriers to entry and stringent quality requirements. Benchmarking spending in this niche requires comparison with similar sole-source or limited-competition awards for highly specialized military hardware.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting subcontracting opportunities for small businesses. The award to a single, likely large, entity suggests that the focus was on securing the specific capability rather than fostering small business participation. Further investigation into subcontracting plans would be needed to assess any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting oversight mechanisms. As a sole-source award, it likely underwent specific justification and approval processes. Transparency is limited due to the lack of competition. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Military Vehicle Procurement
Armored Vehicle Components
Defense Logistics Support
Department of the Army Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.9 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 (Department of the Army).

What is the total obligated amount?

The obligated amount is $49.9 million.

What is the period of performance?

Start: 2008-09-25. End: 2010-07-31.

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

Sole-source awards are typically granted when only one responsible source is available or capable of meeting the agency's needs. This can be due to unique capabilities, proprietary technology, or urgent requirements where competition is not feasible. For this specific contract, the justification would likely stem from Contitech USA, Inc. possessing the exclusive rights, specialized manufacturing processes, or unique technical expertise required for these particular vehicle track configurations. The Department of the Army would have had to document and approve this justification, often involving market research to confirm the absence of viable alternatives. Without access to the official justification documentation, the precise reasons remain speculative, but it points to a high degree of specialization or a lack of alternative suppliers in the market.

How does the $49.9 million contract value compare to similar procurements for vehicle track systems?

Comparing this $49.9 million contract value requires identifying similar procurements for specialized vehicle track systems, ideally for comparable military platforms and quantities. Given that this was a sole-source award, direct price comparisons with competitive bids are not possible. However, analysis of historical sole-source awards for similar components within the Department of Defense or other military branches could provide a benchmark. Factors such as the specific type of track (e.g., rubber, metallic), the vehicle it's intended for (e.g., tank, personnel carrier), the duration of the contract (674 days), and the quantity ordered would influence the per-unit cost. Without access to a database of comparable sole-source contracts or detailed specifications of the tracks, a precise value comparison is challenging. However, the substantial dollar amount suggests a significant quantity or highly specialized, high-cost components.

What are the primary risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may pay more than it would in a competitive environment. Another risk is contractor lock-in, where the agency becomes dependent on a single supplier, making it difficult and costly to switch providers in the future, especially if the technology is proprietary or highly specialized. There's also a reduced incentive for the contractor to innovate or improve efficiency once a contract is secured without competition. Furthermore, the lack of transparency in the procurement process can raise concerns about fairness and the best use of taxpayer funds. Robust oversight and negotiation are crucial to mitigate these risks.

What is the track record of Contitech USA, Inc. with the Department of Defense?

Contitech USA, Inc. has a history of contracting with the Department of Defense, as indicated by this award. To assess their track record thoroughly, one would need to examine past performance on similar contracts, including delivery timeliness, quality of products, and adherence to contract terms. Information on past contract awards, their values, and any performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS) would be crucial. A positive track record would involve consistent successful delivery of goods and services meeting or exceeding DoD standards. Conversely, a negative track record might include instances of delays, quality issues, or contract disputes. Without specific performance data beyond this award, it's difficult to definitively characterize their overall track record.

How does this contract fit into the broader spending patterns for military vehicle components?

This $49.9 million contract represents a specific investment within the larger category of military vehicle components. Spending in this area is driven by the operational needs, modernization programs, and maintenance requirements of the armed forces. Contracts for components like vehicle tracks are essential for maintaining the readiness and effectiveness of ground fleets. Broader spending patterns would encompass a wide range of vehicle systems, from light tactical vehicles to heavy armored platforms, and their associated parts. This particular award, being for track configurations, highlights the ongoing need for durable and reliable mobility systems. Its sole-source nature suggests a focus on specific, perhaps legacy or highly specialized, vehicle systems where competition is limited.

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, 13

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $49,924,792

Exercised Options: $49,924,792

Current Obligation: $49,924,792

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV08D0072

IDV Type: IDC

Timeline