Army awards $24.3M for Light Tactical Trailers, with a significant per-unit cost

Contract Overview

Contract Amount: $24,303,911 ($24.3M)

Contractor: Silver Eagle Manufacturing CO

Awarding Agency: Department of Defense

Start Date: 2009-03-11

End Date: 2010-07-30

Contract Duration: 506 days

Daily Burn Rate: $48.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LIGHT TACTICAL TRAILERS (LTTS) PROGRAM

Place of Performance

Location: PORTLAND, MULTNOMAH County, OREGON, 97218

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to SILVER EAGLE MANUFACTURING CO for work described as: LIGHT TACTICAL TRAILERS (LTTS) PROGRAM Key points: 1. Value for money appears questionable given the high per-unit cost compared to benchmarks. 2. Competition was conducted with exclusion of sources, raising questions about full and open market engagement. 3. Risk indicators include a high per-unit cost and a limited competition approach. 4. Performance context shows a short contract duration for the awarded amount. 5. Sector positioning is within the truck trailer manufacturing industry, a mature market. 6. The contract was awarded as a delivery order under a larger contract vehicle.

Value Assessment

Rating: questionable

The per-unit cost of approximately $480,310 for these trailers is exceptionally high when compared to standard commercial or even military-grade trailers. While specialized requirements may justify higher costs, this figure warrants scrutiny. Benchmarking against similar military trailer procurements or even high-capacity commercial trailers suggests a significant premium. Further analysis of the specific technical requirements and any unique features of these 'Light Tactical Trailers' is needed to fully justify this price point.

Cost Per Unit: $480,310

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the initial solicitation may have been open, specific sources were later excluded, leading to a limited competition scenario. The number of bidders is not explicitly stated but the 'exclusion of sources' suggests fewer than would be expected in a truly full and open competition. This approach can sometimes lead to less competitive pricing.

Taxpayer Impact: The limited competition approach may have resulted in taxpayers paying a higher price than if the contract had been fully and openly competed among all potential offerors.

Public Impact

The primary beneficiaries are the Department of the Army, receiving essential tactical equipment. The services delivered include the manufacturing and delivery of specialized light tactical trailers. The geographic impact is primarily within Oregon, where the contractor is located. Workforce implications include employment at Silver Eagle Manufacturing Co. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost raises concerns about overall program affordability and value for taxpayer dollars.
Limited competition approach ('after exclusion of sources') may have suppressed competitive pricing.
Short contract duration relative to the total award value could indicate potential for cost overruns or scope creep if extended.
Lack of detailed technical specifications in the provided data makes it difficult to assess if the high cost is justified by unique capabilities.

Positive Signals

Awarded to a specific manufacturer, potentially leveraging specialized expertise.
Contract was a delivery order, suggesting it was part of a pre-established contract vehicle, which can streamline procurement.
The contract was firm fixed price, providing cost certainty for the government once awarded.

Sector Analysis

The truck trailer manufacturing industry (NAICS 336212) is a well-established sector. This contract falls within the defense sub-segment of this industry, focusing on specialized tactical vehicles. Market size for defense-related trailers can vary significantly based on military modernization efforts and deployment needs. Comparable spending benchmarks for standard commercial trailers are significantly lower, highlighting the specialized nature and potentially higher cost of military-grade equipment.

Small Business Impact

The provided data indicates that small business participation was not a primary focus for this specific award, as the 'ss' (small business set-aside) field is false and 'sb' (small business) is also false. There is no explicit mention of subcontracting goals for small businesses within this delivery order. Therefore, the direct impact on the small business ecosystem from this particular contract appears minimal, though the prime contractor's overall subcontracting practices would need further investigation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally facilitated through contract databases like FPDS, where this award is recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Tactical Vehicle Procurement
Light Tactical Vehicle Programs
Military Trailer Systems
Defense Logistics Support Equipment

Risk Flags

High Per-Unit Cost
Limited Competition
Potential Lack of Value for Money

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to SILVER EAGLE MANUFACTURING CO. LIGHT TACTICAL TRAILERS (LTTS) PROGRAM

Who is the contractor on this award?

The obligated recipient is SILVER EAGLE MANUFACTURING CO.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $24.3 million.

What is the period of performance?

Start: 2009-03-11. End: 2010-07-30.

What specific technical requirements or unique features of the Light Tactical Trailers (LTTS) justify the exceptionally high per-unit cost of $480,310?

The provided data does not contain detailed technical specifications for the Light Tactical Trailers (LTTS). However, the high per-unit cost suggests these trailers likely possess specialized capabilities beyond standard commercial or even general military trailers. These could include extreme durability for off-road use in harsh environments, advanced suspension systems, specialized cargo containment or protection features, integration with specific military vehicle platforms, or compliance with stringent military standards for survivability and operational readiness. Without access to the Statement of Work (SOW) or technical data package, it is difficult to definitively ascertain the exact justification for this cost. Further investigation would require reviewing the original solicitation documents and the contractor's technical proposal.

How did the 'Full and Open Competition After Exclusion of Sources' process impact the final price compared to a standard full and open competition?

The 'Full and Open Competition After Exclusion of Sources' (FOUACES) process implies that while the initial solicitation was intended to be open, certain potential bidders were subsequently disqualified or excluded from the final competition phase. This exclusion can significantly limit the number of viable offerors, thereby reducing the competitive pressure on pricing. In a standard full and open competition, a larger pool of bidders typically drives prices down through vigorous bidding. With FOUACES, the remaining bidders may face less pressure to offer the most competitive price, potentially leading to a higher final award cost for the government. The specific reasons for exclusion would be critical to understanding the full impact on price discovery.

What is the historical spending pattern for the Light Tactical Trailers (LTTS) program, and how does this $24.3M award compare?

The provided data pertains to a single delivery order totaling $24,303,910.50 for the LTTS program, awarded in 2009 and completed in 2010. There is no information within this dataset to establish a historical spending pattern for the LTTS program. To understand historical spending, one would need to query contract databases for all awards related to 'Light Tactical Trailers' or similar designations across different fiscal years and agencies. Without this broader context, it is impossible to determine if this $24.3M award represents a typical, significant, or outlier expenditure for the program. A comprehensive review of historical contract awards would be necessary.

What are the potential risks associated with a firm fixed-price contract awarded under limited competition for specialized equipment?

A firm fixed-price (FFP) contract generally offers cost certainty to the government. However, when awarded under limited competition, especially for specialized equipment, several risks emerge. Firstly, the limited competition may have resulted in a higher initial price than a fully competitive FFP contract. Secondly, if the specialized equipment has unique or evolving requirements, the contractor might face challenges in meeting them within the fixed price, potentially leading to requests for change orders or claims, which can increase costs and delay delivery. Thirdly, the contractor might have less incentive to innovate or find cost efficiencies if they perceive minimal competitive threat. Finally, the government bears the risk of contractor underperformance or default, as the contractor is locked into the price regardless of unforeseen difficulties, potentially impacting delivery schedules and operational readiness.

Can the contractor, Silver Eagle Manufacturing Co., demonstrate a strong track record with similar high-value, specialized military trailer contracts?

The provided data identifies Silver Eagle Manufacturing Co. as the contractor for this specific $24.3 million award for Light Tactical Trailers (LTTS). However, it does not offer information regarding the company's overall track record, past performance on similar contracts, or its history with the Department of Defense or other agencies. To assess their track record, one would need to conduct a broader search of contract databases (like FPDS or SAM.gov) for other awards to Silver Eagle Manufacturing Co., paying close attention to contract values, types, performance reviews, and any reported issues or successes. Information on their experience with specialized military trailer systems would be particularly relevant.

Industry Classification

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

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5825 NE SKYPORT WAY, PORTLAND, OR, 97218

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business

Financial Breakdown

Contract Ceiling: $24,303,911

Exercised Options: $24,303,911

Current Obligation: $24,303,911

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV08D0106

IDV Type: IDC

Timeline