DoD Awards $488.6M for Abrams Tank Upgrades to General Dynamics Land Systems
Contract Overview
Contract Amount: $488,611,677 ($488.6M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2017-12-22
End Date: 2023-03-31
Contract Duration: 1,925 days
Daily Burn Rate: $253.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: THREE-YEAR REQUIREMENTS CONTRACT, FOR THE UPGRADE OF UP TO 786 M1A1 CONFIGURED ABRAMS VEHICLES. THE DOMESTIC VEHICLES WILL BE UPGRADED TO NEWLY CONFIGURED ABRAMS M1A2 SYSTEM ENHANCEMENT PACKAGE VERSION 3 (SEPV3). THE CONTRACTOR WILL BE INSTALLING AND INTEGRATING SEPV3 TECHNOLOGIES (HARDWARE AND SOFTWARE), AS WELL AS RECLAIMED/REFURBISHED ABRAMS LEGACY COMPONENTS, RESULTING IN THE NEWLY CONFIGURED ABRAMS VEHICLES. IN ADDITION, M1A1 VEHICLES WILL BE UPGRADED TO M1A2S (KINGDOM OF SAUDI ARABIA (KSA)), AND M1A2-K (KUWAIT) VEHICLES.
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $488.6 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: THREE-YEAR REQUIREMENTS CONTRACT, FOR THE UPGRADE OF UP TO 786 M1A1 CONFIGURED ABRAMS VEHICLES. THE DOMESTIC VEHICLES WILL BE UPGRADED TO NEWLY CONFIGURED ABRAMS M1A2 SYSTEM ENHANCEMENT PACKAGE VERSION 3 (SEPV3). THE CONTRACTOR WILL BE INSTALLING AND INTEGRATING SEPV3 TECHNOLOG… Key points: 1. Significant investment in modernizing the Abrams tank fleet. 2. General Dynamics Land Systems is the sole contractor for this upgrade. 3. Potential for cost overruns due to fixed-price incentive contract type. 4. Focus on upgrading both domestic and allied Abrams vehicles.
Value Assessment
Rating: questionable
The contract is a Fixed Price Incentive type, which can lead to higher costs if performance targets are not met. The total award amount of $488.6 million for upgrading up to 786 vehicles suggests a per-unit cost of approximately $621,000, which needs further benchmarking against similar complex military vehicle modernization programs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Dynamics Land Systems. This lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The sole-source nature of this award raises concerns about taxpayer value, as competitive bidding could have potentially secured a lower price for these critical vehicle upgrades.
Public Impact
Enhances the combat readiness and technological superiority of U.S. and allied Abrams tanks. Supports the modernization of a key piece of military hardware, ensuring its relevance in future conflicts. Impacts the defense industrial base, particularly in armored vehicle manufacturing. Provides upgrades for both domestic U.S. Army vehicles and those of key international partners like Saudi Arabia and Kuwait.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Fixed-price incentive contract carries risk of cost overruns.
- Long contract duration (1925 days) increases exposure to market volatility.
- Lack of clear performance metrics for the incentive portion.
Positive Signals
- Addresses critical modernization needs for a key military asset.
- Upgrades benefit both U.S. forces and allied nations, strengthening partnerships.
- Leverages existing platforms (M1A1) for cost-effective upgrades compared to new builds.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on armored vehicle manufacturing and upgrades. Spending benchmarks for similar large-scale military vehicle modernization programs are typically in the hundreds of millions to billions of dollars, depending on the scope and number of vehicles.
Small Business Impact
The data indicates that small business participation was not a stated factor in this contract award (sb: false). Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses.
Oversight & Accountability
The contract is managed by the Department of the Army. Oversight would typically involve program managers monitoring progress, costs, and adherence to technical specifications. The fixed-price incentive structure requires careful monitoring to manage potential cost increases.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Fixed-price incentive contract risk
- Lack of detailed cost breakdown
- Long contract duration
- Potential for scope creep
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $488.6 million to GENERAL DYNAMICS LAND SYSTEMS INC.. THREE-YEAR REQUIREMENTS CONTRACT, FOR THE UPGRADE OF UP TO 786 M1A1 CONFIGURED ABRAMS VEHICLES. THE DOMESTIC VEHICLES WILL BE UPGRADED TO NEWLY CONFIGURED ABRAMS M1A2 SYSTEM ENHANCEMENT PACKAGE VERSION 3 (SEPV3). THE CONTRACTOR WILL BE INSTALLING AND INTEGRATING SEPV3 TECHNOLOGIES (HARDWARE AND SOFTWARE), AS WELL AS RECLAIMED/REFURBISHED ABRAMS LEGACY COMPONENTS, RESULTING IN THE NEWLY CONFIGURED ABRAMS VEHICLES. IN ADDITION, M1A1 VEHICLES WILL BE UPGRADED TO M1A2S (KINGDOM OF SAUDI
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 $488.6 million.
What is the period of performance?
Start: 2017-12-22. End: 2023-03-31.
What is the specific incentive structure within the Fixed Price Incentive contract, and what are the target and ceiling costs?
The provided data does not detail the specific incentive structure, target costs, or ceiling costs for this Fixed Price Incentive contract. Understanding these elements is crucial for assessing the potential for cost overruns and the contractor's motivation to control expenses. Further review of the contract's detailed terms and conditions is necessary.
How does the per-unit cost of this upgrade compare to historical M1A2 SEPv3 upgrade contracts or similar modernization efforts?
Without specific benchmarking data for comparable M1A2 SEPv3 upgrades or similar complex military vehicle modernization programs, it is difficult to definitively assess the value for money. The estimated per-unit cost of approximately $621,000 requires comparison against industry standards and previous government contracts to determine if it represents a fair and reasonable price.
What are the key performance metrics and technical specifications that trigger the incentive portion of the contract?
The provided data does not specify the key performance metrics or technical specifications tied to the incentive portion of this contract. Identifying these metrics is essential for evaluating the effectiveness of the incentive structure in driving desired outcomes and ensuring the successful integration of SEPv3 technologies.
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: $488,611,677
Exercised Options: $488,611,677
Current Obligation: $488,611,677
Subaward Activity
Number of Subawards: 2740
Total Subaward Amount: $1,065,537,146
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV18D0012
IDV Type: IDC
Timeline
Start Date: 2017-12-22
Current End Date: 2023-03-31
Potential End Date: 2023-03-31 12:03:00
Last Modified: 2025-12-08
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