DoD Awards $606M for Stryker Vehicle Engineering to General Dynamics Land Systems

Contract Overview

Contract Amount: $606,342,543 ($606.3M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2013-03-08

End Date: 2017-08-31

Contract Duration: 1,637 days

Daily Burn Rate: $370.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CALL UP OF STRYKER EXCHANGE PROGRAM NONRECURRING ENGINEERING FOR COMMANDER'S VEHICLE, MORTAR CARRIER VEHICLE, RECONNAISSANCE VEHICLE, ANTI-TANK GUIDED MISSILE VEHICLE, FIRE SUPPORT VEHICLE, MEDICAL EVAC VEHICLE AND ENGINEER SQUAD VEHICLE.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $606.3 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: CALL UP OF STRYKER EXCHANGE PROGRAM NONRECURRING ENGINEERING FOR COMMANDER'S VEHICLE, MORTAR CARRIER VEHICLE, RECONNAISSANCE VEHICLE, ANTI-TANK GUIDED MISSILE VEHICLE, FIRE SUPPORT VEHICLE, MEDICAL EVAC VEHICLE AND ENGINEER SQUAD VEHICLE. Key points: 1. Significant investment in armored vehicle modernization. 2. Sole-source award to incumbent contractor raises competition concerns. 3. High non-recurring engineering costs suggest complex development. 4. Focus on diverse Stryker variants indicates broad platform utility.

Value Assessment

Rating: questionable

The $606M award for non-recurring engineering on multiple Stryker variants appears high. Without comparable contracts for similar development efforts, it's difficult to benchmark pricing effectively. The cost-plus-fixed-fee structure warrants close monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning competition was not sought. This limits price discovery and potentially leads to higher costs for taxpayers. The justification for sole-sourcing should be thoroughly reviewed.

Taxpayer Impact: The lack of competition for a contract of this magnitude may result in suboptimal pricing, impacting taxpayer value.

Public Impact

Enhances the capabilities of the U.S. Army's Stryker fleet. Supports the development of specialized armored vehicles for various combat roles. Potential for increased operational effectiveness and soldier protection. Impacts the defense industrial base, particularly in armored vehicle manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Cost-plus-fixed-fee contract requires careful oversight.
High dollar value for non-recurring engineering.

Positive Signals

Addresses critical modernization needs for armored vehicles.
Leverages existing platform for diverse mission requirements.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on military armored vehicle manufacturing. Spending in this area is driven by modernization efforts and geopolitical demands. Benchmarks for similar NRE contracts are scarce due to proprietary nature.

Small Business Impact

No direct indication of small business participation is provided in the data. Sole-source awards often limit opportunities for small businesses to compete for prime contracts.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure fair pricing and effective execution of the engineering work. Auditing of costs will be critical.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition may lead to inflated costs.
Cost-plus-fixed-fee contract shifts cost overrun risk to the government.
High value of contract warrants detailed cost scrutiny.
Potential for scope creep in complex engineering programs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $606.3 million to GENERAL DYNAMICS LAND SYSTEMS INC.. CALL UP OF STRYKER EXCHANGE PROGRAM NONRECURRING ENGINEERING FOR COMMANDER'S VEHICLE, MORTAR CARRIER VEHICLE, RECONNAISSANCE VEHICLE, ANTI-TANK GUIDED MISSILE VEHICLE, FIRE SUPPORT VEHICLE, MEDICAL EVAC VEHICLE AND ENGINEER SQUAD VEHICLE.

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 $606.3 million.

What is the period of performance?

Start: 2013-03-08. End: 2017-08-31.

What was the specific justification for awarding this contract sole-source, and were alternative competitive approaches considered?

The provided data indicates a sole-source award, suggesting that competition was either deemed impractical or unnecessary. A thorough review would require access to the contract's justification and approval (J&A) document. Typically, sole-sourcing is justified by factors like unique capabilities, urgent needs, or lack of viable alternatives. Without the J&A, it's impossible to confirm the specific rationale or if alternatives were explored.

How does the cost-plus-fixed-fee structure impact the contractor's incentive to control costs on this extensive engineering program?

The Cost-Plus-Fixed-Fee (CPFF) structure provides the contractor with reimbursement for allowable costs plus a predetermined fixed fee. While the fixed fee incentivizes completion, it offers less direct incentive for cost savings compared to fixed-price contracts. The government bears the risk of cost overruns, making rigorous cost monitoring and auditing essential to ensure value for money.

What are the key performance indicators (KPIs) being used to measure the success and effectiveness of this non-recurring engineering effort?

Specific KPIs are not detailed in the provided data. However, for non-recurring engineering (NRE) on complex systems like military vehicles, success is typically measured by meeting technical specifications, achieving design milestones within schedule, successful prototype testing, and ensuring the final design is producible and maintainable within projected lifecycle costs. Effective oversight would involve tracking these technical and programmatic elements.

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 48310

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $606,342,543

Exercised Options: $606,342,543

Current Obligation: $606,342,543

Subaward Activity

Number of Subawards: 1584

Total Subaward Amount: $1,374,829,817

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV13D0008

IDV Type: IDC

Timeline