DoD Awards $1.16 Billion for Military Armored Vehicles to General Dynamics Land Systems Inc

Contract Overview

Contract Amount: $1,161,156,293 ($1.2B)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2008-01-11

End Date: 2015-11-29

Contract Duration: 2,879 days

Daily Burn Rate: $403.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ECONOMIC ORDER QUANTITY CONTRACT

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $1.16 billion to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: ECONOMIC ORDER QUANTITY CONTRACT Key points: 1. Significant contract value of over $1.16 billion awarded. 2. Sole-source award to General Dynamics Land Systems Inc. raises competition concerns. 3. Long contract duration of 2879 days suggests potential for cost overruns. 4. The sector is critical for national defense, but lacks competitive pricing. 5. Firm Fixed Price contract type offers some cost certainty.

Value Assessment

Rating: questionable

The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal compared to similar armored vehicle contracts. The firm fixed price offers some protection, but the long duration could still lead to inefficiencies.

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 Inc. This lack of competition limits price discovery and may result in higher costs for taxpayers.

Taxpayer Impact: The absence of competition likely means taxpayers are paying a premium for these military armored vehicles.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The long-term nature of the contract could lead to sustained high costs. Dependence on a single supplier for critical defense equipment poses a risk. The contract supports a key industry within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of competition
High contract value

Positive Signals

Firm Fixed Price contract type
Supports critical defense capabilities

Sector Analysis

This contract falls within the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. Spending in this area is driven by defense needs, and typically involves large, long-term contracts. Benchmarks are difficult without competitive data.

Small Business Impact

The data indicates this contract was awarded to a large prime contractor, General Dynamics Land Systems Inc. There is no information provided on subcontracting opportunities for small businesses within this sole-source award.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and efficient execution. Accountability for cost and performance over the long duration is crucial.

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 limits competition and potentially increases costs.
Long contract duration increases risk of obsolescence and cost overruns.
Lack of transparency in pricing due to no competitive bidding.
Potential for contractor lock-in and reduced leverage for future negotiations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.16 billion to GENERAL DYNAMICS LAND SYSTEMS INC.. ECONOMIC ORDER QUANTITY CONTRACT

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 $1.16 billion.

What is the period of performance?

Start: 2008-01-11. End: 2015-11-29.

What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing without competition?

The justification for a sole-source award is typically based on unique capabilities or urgent needs. Without competitive bidding, the Department of Defense must conduct thorough market research and cost analyses to determine fair and reasonable pricing. This often involves comparing proposed costs to historical data, independent cost estimates, or prices paid for similar items by other government agencies or commercial entities.

How does the long duration of this contract impact the government's ability to adapt to technological advancements or changing military requirements?

A contract spanning nearly eight years (2879 days) presents a significant risk of obsolescence or misalignment with evolving military needs. While firm fixed price offers cost control, it may not incentivize innovation or flexibility. The government might face challenges incorporating new technologies or modifying vehicle specifications without costly change orders or entering into new contractual agreements.

What is the estimated taxpayer impact of awarding this contract on a sole-source basis compared to a competitive process?

Sole-source contracts generally lead to a higher taxpayer impact due to the absence of price competition. Without competing bids, the contractor has less incentive to offer the lowest possible price. Studies and historical data often suggest that competitive procurements can yield savings of 10-30% or more compared to sole-source awards for similar goods or services.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,161,156,293

Exercised Options: $1,161,156,293

Current Obligation: $1,161,156,293

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV06G0006

IDV Type: IDC

Timeline