DoD awards $256M for Stryker vehicle maintenance, with a 17-bid competition

Contract Overview

Contract Amount: $256,022,469 ($256.0M)

Contractor: GM Gdls Defense Group, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2004-11-18

End Date: 2010-06-30

Contract Duration: 2,050 days

Daily Burn Rate: $124.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 17

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200502!001617!2100!W56HZV!TACOM - WARREN !DAAE0700DM051 !A!N! !N!0025 ! !20041118!20080930!098155158!098155158!098155158!N!GM GDLS DEFENSE GROUP LLC, JOI!38500 MOUND ROAD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000059921736!N!N!000000000000!J010!MAINT & REPAIR OF EQ/WEAPONS !A4A!COMBAT VEHICLES !299 !STRYKER (IAV) !336992!E! !5!A!S! ! ! !20200930!B! ! !A! !A!U!J!2!017!B! !Z!N!A!A!ZZ!N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $256.0 million to GM GDLS DEFENSE GROUP, L.L.C. for work described as: 200502!001617!2100!W56HZV!TACOM - WARREN !DAAE0700DM051 !A!N! !N!0025 ! !20041118!20080930!098155158!098155158!098155158!N!GM GDLS DEFENSE GROUP LLC, JOI!38500 MOUND ROAD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACO… Key points: 1. Contract awarded to GM GDLS Defense Group LLC for maintenance and repair of combat vehicles. 2. Significant competition with 17 bids indicates potential for competitive pricing. 3. Contract duration of over 6 years suggests a long-term need for these services. 4. The award is for the Stryker Infantry Armored Vehicle, a key component of Army ground forces. 5. Geographic focus on Michigan for contractor operations.

Value Assessment

Rating: good

The total award amount of $256 million over approximately six years represents a substantial investment in maintaining critical military assets. While specific per-unit costs are not detailed here, the presence of 17 bidders suggests a competitive environment that likely drove pricing towards market rates. Benchmarking against similar maintenance contracts for armored vehicles would provide further insight into the value for money, but the competitive landscape is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with a notable 17 bids received. This high level of competition is a strong positive signal, suggesting that the solicitation was accessible to a wide range of qualified contractors and that the government received numerous proposals. The extensive bidding process likely contributed to achieving a fair market price.

Taxpayer Impact: The robust competition ensures that taxpayer dollars are being used efficiently, as multiple companies vied to provide these essential services at the best possible terms.

Public Impact

Benefits the U.S. Army by ensuring the operational readiness of its Stryker combat vehicles. Provides essential maintenance and repair services for a critical piece of military equipment. Supports jobs and economic activity within the defense manufacturing and maintenance sector, particularly in Michigan. Enhances the overall combat effectiveness and survivability of ground forces equipped with Stryker vehicles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs during the long contract duration.
Reliance on a single primary contractor (GM GDLS Defense Group) for specialized maintenance could pose risks if their capacity or performance falters.
Ensuring consistent quality of maintenance across all Stryker vehicles over the contract's lifespan.

Positive Signals

Awarded under full and open competition, indicating a broad market response.
High number of bidders (17) suggests strong market interest and potential for competitive pricing.
Contract is for maintenance and repair, a necessary function for asset longevity and readiness.
The contractor, GM GDLS Defense Group, is a known entity in the defense sector for vehicle manufacturing and support.

Sector Analysis

The defense sector, particularly the segment focused on armored vehicle manufacturing and maintenance, is a critical component of national security spending. This contract falls within the broader category of military vehicle support services. The market for such services is characterized by specialized expertise and often involves long-term sustainment contracts. Comparable spending benchmarks would typically involve analyzing other contracts for the maintenance and upgrade of major weapon systems.

Small Business Impact

While this contract was awarded to a large prime contractor, it's important to assess subcontracting opportunities for small businesses. Defense contracts of this magnitude often include provisions for small business participation. Further analysis would be needed to determine if specific small business set-asides were utilized or if subcontracting goals were established to ensure small businesses benefit from this significant award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and program management offices. Accountability measures would include performance metrics, quality assurance surveillance plans (QASPs), and regular reporting requirements. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations into potential fraud, waste, or abuse.

Related Government Programs

Army Combat Vehicle Maintenance Contracts
Stryker Program Support
Defense Logistics Agency Maintenance Services
Armored Vehicle Sustainment Programs
Department of Defense Equipment Repair Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep.
Potential for sole-source reliance on manufacturer for specialized parts or expertise.
Need for ongoing quality assurance to ensure consistent maintenance standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $256.0 million to GM GDLS DEFENSE GROUP, L.L.C.. 200502!001617!2100!W56HZV!TACOM - WARREN !DAAE0700DM051 !A!N! !N!0025 ! !20041118!20080930!098155158!098155158!098155158!N!GM GDLS DEFENSE GROUP LLC, JOI!38500 MOUND ROAD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000059921736!N!N!000000000000!J010!MAINT & REPAIR OF EQ/WEAPONS !A4A!COMBAT VEHICLES !299 !STRYKER (IAV) !336992!E! !5!A!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is GM GDLS DEFENSE GROUP, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $256.0 million.

What is the period of performance?

Start: 2004-11-18. End: 2010-06-30.

What is the historical spending pattern for the maintenance and repair of Stryker vehicles by the Department of the Army?

Historical spending on Stryker vehicle maintenance and repair by the Department of the Army has been substantial, reflecting the operational tempo and the need to sustain a large fleet of these critical assets. While this specific contract represents a significant award of $256 million over its duration, it is part of a larger, ongoing investment. Annual spending can fluctuate based on operational needs, modernization efforts, and the availability of funds. Analyzing past contracts, including those awarded to GM GDLS Defense Group and potentially other competitors, would reveal trends in contract values, durations, and the specific types of maintenance performed. This historical context is crucial for understanding whether the current award is in line with previous expenditures or represents a significant shift in investment.

How does the per-unit cost of maintaining a Stryker vehicle under this contract compare to industry benchmarks or similar contracts?

Determining the precise per-unit cost of maintaining a Stryker vehicle under this contract requires access to detailed cost breakdowns, which are often not publicly disclosed. However, the contract's total value of $256 million spread over its duration, coupled with the number of Stryker vehicles in the Army's inventory, can provide a rough estimate. The presence of 17 bidders in a full and open competition suggests that pricing was likely competitive. To perform a true benchmark, one would compare this estimated per-unit cost against data from similar sustainment contracts for other armored vehicles, factoring in differences in complexity, technology, and service scope. Industry benchmarks for vehicle maintenance often consider factors like labor rates, parts costs, and overhead. Without specific unit cost data, a definitive comparison is challenging, but the competitive award process provides a degree of confidence in the pricing's reasonableness.

What is the track record of GM GDLS Defense Group LLC in fulfilling similar defense maintenance contracts?

GM GDLS Defense Group LLC, a joint venture often involving General Dynamics Land Systems, has a significant and established track record in the defense sector, particularly concerning armored vehicle manufacturing and sustainment. They are the original manufacturer of the Stryker family of vehicles, which positions them uniquely to understand and execute maintenance and repair requirements. Their history includes numerous contracts with the Department of Defense for production, upgrades, and long-term support of various armored platforms. Performance reviews and past contract outcomes would be critical for a full assessment, but their deep involvement with the Stryker program suggests a strong capability and familiarity with the systems. This experience is a key factor in their ability to win and execute such a substantial maintenance contract.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks associated with this contract include potential cost overruns due to unforeseen maintenance issues or parts obsolescence, schedule delays impacting vehicle readiness, and performance deficiencies in the quality of maintenance provided. Given the contract's duration of over six years, there's also a risk of technological changes or evolving operational requirements that might necessitate contract modifications. Mitigation strategies typically involve robust contract oversight, including performance metrics and quality assurance surveillance plans (QASPs), clear definition of deliverables, and contingency planning for parts sourcing and labor. The firm-fixed-price nature of the contract (implied by 'FIRM FIXED PRICE' in the data) shifts some cost risk to the contractor, incentivizing efficiency. Regular program reviews and open communication channels between the government and the contractor are also crucial for proactive risk management.

How does the level of competition (17 bidders) impact the overall value for money for the taxpayer?

The high level of competition, with 17 bidders for this contract, is a significant positive factor for taxpayer value. When multiple qualified companies submit proposals, it creates a competitive environment where contractors are incentivized to offer their best pricing and most efficient solutions to win the award. This process helps ensure that the government is not overpaying for the required services and that taxpayer funds are used efficiently. A robust competition typically leads to prices that are closer to the actual cost of providing the service, plus a reasonable profit margin, rather than prices inflated by a lack of market alternatives. Therefore, the 17 bids suggest that the government likely secured a favorable price and a high-quality service offering.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 17

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 10

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Parent Contract

Parent Award PIID: DAAE0700DM051

IDV Type: IDC

Timeline