DoD's $39M M1 Abrams Tank Transmission Contract Awarded to Allison Transmission Inc

Contract Overview

Contract Amount: $39,020,682 ($39.0M)

Contractor: Allison Transmission Inc

Awarding Agency: Department of Defense

Start Date: 2008-09-19

End Date: 2012-12-31

Contract Duration: 1,564 days

Daily Burn Rate: $24.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: X1100 NEW TRANSMISSION IN SUPPORT OF THE M1 ABRAMS TANK.

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $39.0 million to ALLISON TRANSMISSION INC for work described as: X1100 NEW TRANSMISSION IN SUPPORT OF THE M1 ABRAMS TANK. Key points: 1. Value for money is difficult to assess due to the lack of competitive bidding. 2. The contract was awarded on a sole-source basis, limiting price discovery. 3. The duration of the contract (over 4 years) suggests a long-term need for these transmissions. 4. Performance context is limited as this is a delivery order for new transmissions. 5. The contract falls within the Defense sector, specifically supporting armored vehicle maintenance. 6. The sole-source nature raises questions about potential overpayment compared to a competitive scenario.

Value Assessment

Rating: questionable

Without competitive bidding, it is challenging to benchmark the value for money. The fixed price contract for new transmissions suggests a defined cost, but the absence of competing offers means there's no market validation of this price. Compared to similar sole-source awards for specialized military components, the pricing might be within an expected range, but a definitive assessment of 'good value' is hindered by the lack of alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The data does not specify the number of bidders, as it was not subject to a competitive process. This lack of competition means that the government did not explore multiple vendor options, potentially missing out on better pricing or innovative solutions.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to lower prices.

Public Impact

The primary beneficiaries are the U.S. Army, ensuring operational readiness of M1 Abrams tanks. The service delivered is the provision of new transmission systems for critical armored vehicles. The geographic impact is national, supporting military operations across various deployments. Workforce implications include supporting manufacturing jobs at Allison Transmission Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Dependence on a single supplier could create future supply chain risks.

Positive Signals

Award to an established manufacturer (Allison Transmission Inc.) suggests potential for reliable delivery.
Firm Fixed Price contract provides cost certainty for the government.
Contract supports critical defense equipment, ensuring national security readiness.

Sector Analysis

The defense industrial base relies on specialized manufacturers for critical components like tank transmissions. This contract for M1 Abrams transmissions fits within the broader 'Motor Vehicle Body Manufacturing' (NAICS 336211) and 'Motor Vehicle Parts Manufacturing' (NAICS 3363) sectors. Spending in this area is driven by military modernization and readiness requirements. Comparable spending benchmarks are difficult to establish without competitive data, but the total value of $39 million over four years for a key component of a main battle tank is significant.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The award to a large, established manufacturer like Allison Transmission Inc. suggests that small business participation was not a primary consideration in this specific procurement. This could mean limited opportunities for small businesses to directly benefit from this contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver the specified goods at the agreed-upon price. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process more challenging.

Related Government Programs

M1 Abrams Tank Procurement
Armored Vehicle Component Manufacturing
Department of Defense Supply Chain Management
Military Vehicle Parts Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.0 million to ALLISON TRANSMISSION INC. X1100 NEW TRANSMISSION IN SUPPORT OF THE M1 ABRAMS TANK.

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION 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 $39.0 million.

What is the period of performance?

Start: 2008-09-19. End: 2012-12-31.

What is Allison Transmission Inc.'s track record with the Department of Defense, particularly for M1 Abrams components?

Allison Transmission Inc. has a long-standing relationship with the Department of Defense, supplying transmissions for various military vehicles, including the M1 Abrams tank. Their history with this specific platform suggests a deep understanding of the technical requirements and operational demands. While this particular contract was a sole-source award, the company's established presence in the defense sector indicates a pattern of providing critical components. Further analysis would involve reviewing past contract performance reviews and any documented issues or successes related to their deliveries for the M1 Abrams program to fully assess their track record beyond this single award.

How does the $39 million contract value compare to historical spending on M1 Abrams transmissions?

Directly comparing this $39 million contract value to historical spending on M1 Abrams transmissions is challenging without access to detailed historical procurement data for this specific component. This contract covers new transmissions and spans over four years (2008-2012), indicating a significant investment. However, without knowing the number of units procured under this award and the unit price, it's difficult to establish a precise historical trend. If this represents a substantial portion of the total transmission needs for the fleet during that period, it suggests a considerable expenditure. Future analysis could involve examining annual defense spending reports and contract databases for similar awards to identify patterns and potential cost escalations or reductions over time.

What are the primary risks associated with a sole-source award for critical military components like tank transmissions?

The primary risks associated with a sole-source award for critical military components like tank transmissions include a lack of price competition, which can lead to higher costs for the government and taxpayers. There's also a reduced incentive for the sole-source provider to innovate or improve efficiency, as they face no direct market pressure. Furthermore, dependence on a single supplier can create significant supply chain vulnerabilities; any disruption in the supplier's operations, such as production issues, labor disputes, or geopolitical events affecting their facilities, could directly impact military readiness. Finally, the absence of competitive bidding can limit transparency and make it harder to ensure the best possible value is being obtained.

How effective is the firm fixed-price contract type in managing costs for this type of specialized equipment?

The Firm Fixed Price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks are understood, as is often the case with established military hardware like tank transmissions. For the government, FFP provides cost certainty, as the contractor bears the risk of cost overruns. This means the $39 million ceiling is the maximum the government expects to pay, assuming the contractor meets all terms. However, the effectiveness is somewhat diminished in a sole-source scenario. While the price is fixed, the initial price itself might be higher than it would be in a competitive environment. The FFP structure still incentivizes the contractor to control their own costs to maximize profit, but the government's ability to ensure that fixed price represents true value is limited without competitive benchmarking.

What is the strategic importance of ensuring a reliable supply of M1 Abrams transmissions for national defense?

Ensuring a reliable supply of M1 Abrams transmissions is of paramount strategic importance for national defense. The M1 Abrams is the U.S. Army's primary main battle tank, forming a cornerstone of its armored warfare capabilities. Transmissions are critical powertrain components that enable mobility, maneuverability, and operational readiness. Any disruption in the supply of these transmissions could directly impact the Army's ability to deploy, sustain, and effectively utilize its tank fleet in combat or peacekeeping operations. Maintaining a robust supply chain, even through sole-source contracts when necessary, is crucial for deterring adversaries, projecting power, and responding to global security threats. The strategic value lies in maintaining the operational effectiveness and readiness of a key military asset.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Motor Vehicle Body 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

Parent Company: Allison Transmission Holdings, Inc.

Address: ONE ALLISON WAY, INDIANAPOLIS, IN, 46222

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: $39,020,682

Exercised Options: $39,020,682

Current Obligation: $39,020,682

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV08D0159

IDV Type: IDC

Timeline