DoD Awards $275M for Military Vehicle Parts, Citing Pre-Negotiated Pricing
Contract Overview
Contract Amount: $274,708,826 ($274.7M)
Contractor: GM Gdls Defense Group, L.L.C.
Awarding Agency: Department of Defense
Start Date: 2010-12-27
End Date: 2012-08-31
Contract Duration: 613 days
Daily Burn Rate: $448.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: THE PURPOSE OF THIS UNILATERAL MODIFICATION IS TO CALL UP PRE-NEGOTIATED PRICING.
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $274.7 million to GM GDLS DEFENSE GROUP, L.L.C. for work described as: THE PURPOSE OF THIS UNILATERAL MODIFICATION IS TO CALL UP PRE-NEGOTIATED PRICING. Key points: 1. Significant contract value of $274.7M for military vehicle components. 2. Procurement method was 'Not Competed', raising questions about price discovery. 3. Potential risk associated with sole-source or limited competition for specialized parts. 4. Spending falls within the Defense sector, specifically armored vehicle manufacturing.
Value Assessment
Rating: questionable
The contract utilizes pre-negotiated pricing, but the lack of competition makes it difficult to assess if this pricing represents fair market value. Without a competitive bidding process, it's hard to benchmark against similar contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source or limited competition approach. This method bypasses the price discovery benefits of open competition, potentially leading to higher costs for taxpayers.
Taxpayer Impact: Taxpayer funds may be at risk of being overspent due to the lack of competitive pricing.
Public Impact
Ensures continued supply of critical military vehicle parts. Supports a specific defense contractor's production capabilities. Potential for higher costs due to non-competitive award. Impact on readiness and modernization of armored vehicle fleets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Limited transparency in pricing
Positive Signals
- Ensures supply chain for critical defense components
- Utilizes pre-negotiated pricing
Sector Analysis
This contract falls under the Defense sector, specifically within the manufacturing of military armored vehicles and their components. Spending benchmarks in this niche area are often influenced by defense budgets and geopolitical factors, making direct comparisons challenging without detailed cost breakdowns.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to determine small business participation.
Oversight & Accountability
The 'Not Competed' status suggests a potential lack of robust oversight in the initial award decision. Transparency regarding the justification for not competing the award is crucial for accountability.
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
- Potential for inflated pricing
- Limited transparency
- Dependency on a single source
- Unclear value for money
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 $274.7 million to GM GDLS DEFENSE GROUP, L.L.C.. THE PURPOSE OF THIS UNILATERAL MODIFICATION IS TO CALL UP PRE-NEGOTIATED PRICING.
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 $274.7 million.
What is the period of performance?
Start: 2010-12-27. End: 2012-08-31.
What was the justification for not competing this significant contract, and were alternative competitive strategies considered?
The data states the purpose was to 'call up pre-negotiated pricing,' implying a prior agreement or existing framework. However, the justification for not conducting a new competitive solicitation to ensure the best value for the government is unclear. Alternative strategies like streamlined competitive processes or market research to validate pre-negotiated prices should ideally be explored.
How does the pre-negotiated pricing compare to market rates for similar military vehicle components, and what mechanisms are in place to ensure continued cost-effectiveness?
Without access to the pre-negotiated pricing details and comparable market data, it's impossible to definitively assess cost-effectiveness. The lack of competition limits the ability to benchmark. Mechanisms for ongoing cost-effectiveness might include periodic price reviews or performance metrics, but these are not specified in the provided data.
What is the long-term strategic impact of relying on non-competed contracts for essential military vehicle parts on overall defense spending and industrial base resilience?
Sole-source or non-competed contracts can lead to higher costs over time and potentially stifle innovation by limiting market entry for new suppliers. This can also create dependencies on specific manufacturers, potentially impacting the resilience of the defense industrial base. A balanced approach incorporating competitive strategies is generally preferred for long-term cost control and technological advancement.
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 (UEI: 001381284)
Address: 38500 MOUND ROAD, STERLING HEIGHTS, MI, 48310
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $274,708,826
Exercised Options: $274,708,826
Current Obligation: $274,708,826
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV07DM112
IDV Type: IDC
Timeline
Start Date: 2010-12-27
Current End Date: 2012-08-31
Potential End Date: 2012-08-31 00:00:00
Last Modified: 2020-10-01
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