DOD awards $316M for Stryker vehicle survivability upgrades, a sole-source contract with cost-plus-fixed-fee terms

Contract Overview

Contract Amount: $316,098,627 ($316.1M)

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

Awarding Agency: Department of Defense

Start Date: 2009-12-14

End Date: 2014-02-28

Contract Duration: 1,537 days

Daily Burn Rate: $205.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SERVICES TO PROVIDE ENHANCED SURVIVABILITY CAPABILITIES TO STRYKER VEHICLES SUPPORTING OEF

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $316.1 million to GM GDLS DEFENSE GROUP, L.L.C. for work described as: SERVICES TO PROVIDE ENHANCED SURVIVABILITY CAPABILITIES TO STRYKER VEHICLES SUPPORTING OEF Key points: 1. Contract awarded to GM GDLS Defense Group, L.L.C. for enhanced survivability capabilities. 2. Focus on Stryker vehicles supporting Operation Enduring Freedom (OEF). 3. Contract type is Cost Plus Fixed Fee (CPFF), which can carry higher cost risk. 4. Awarded as a sole-source contract, limiting competitive pricing opportunities. 5. Duration of the contract is approximately 1537 days. 6. The contract value is substantial, reflecting critical defense needs.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific application to Stryker vehicle survivability. Cost-plus-fixed-fee contracts can sometimes lead to higher overall costs compared to fixed-price contracts if cost controls are not rigorously managed. Without competitive bids, it's difficult to ascertain if the pricing reflects optimal market value. The significant dollar amount suggests a critical need, but the lack of competition raises concerns about potential overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities or when urgency dictates a direct award. The absence of competition limits the government's ability to leverage market forces to achieve the lowest possible price and may indicate a lack of alternative suppliers for these specialized survivability enhancements.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's negotiating power and potentially reduces the overall value for money.

Public Impact

Directly benefits military personnel operating Stryker vehicles in combat zones, enhancing their safety and survivability. Provides critical upgrades to a key piece of military hardware, improving operational effectiveness. Supports the U.S. Army's mission in ongoing military operations, particularly in Afghanistan (OEF). Maintains and potentially expands specialized manufacturing and engineering jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost-plus-fixed-fee contract structure can incentivize higher spending if not closely monitored.
Lack of transparency in the sole-source justification process.
Potential for cost overruns inherent in CPFF contracts.
Limited visibility into alternative technological solutions due to non-competitive award.

Positive Signals

Addresses critical survivability needs for frontline military vehicles.
Ensures operational readiness and safety for soldiers in high-threat environments.
Leverages established contractor expertise in Stryker vehicle modifications.
Supports a vital component of military logistics and equipment sustainment.

Sector Analysis

The defense sector is characterized by complex, high-value contracts for specialized equipment and services. This contract falls within the military armored vehicle manufacturing sub-sector, which requires significant R&D and production capabilities. Spending in this area is driven by evolving threats and the need to maintain technological superiority. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of survivability upgrades, but overall defense spending on vehicle modernization is in the billions annually.

Small Business Impact

This contract was not awarded to small businesses, nor does it appear to have specific small business set-aside provisions. The prime contractor, GM GDLS Defense Group, L.L.C., is a large defense manufacturer. While large prime contractors often engage subcontractors, the lack of a small business set-aside suggests that opportunities for small businesses may be limited unless they are part of the prime's established supply chain for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Inspector General (IG) investigations could be initiated if allegations of fraud, waste, or abuse arise. Transparency is generally limited for sole-source awards, but contract modifications and performance reports would be subject to internal government review.

Related Government Programs

Stryker Brigade Combat Team Modernization
Mine-Resistant Ambush Protected (MRAP) Vehicles
Tactical Wheeled Vehicle Fleet Modernization
Combat Vehicle Survivability Enhancements
Operation Enduring Freedom Support Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns
Limited competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $316.1 million to GM GDLS DEFENSE GROUP, L.L.C.. SERVICES TO PROVIDE ENHANCED SURVIVABILITY CAPABILITIES TO STRYKER VEHICLES SUPPORTING OEF

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 $316.1 million.

What is the period of performance?

Start: 2009-12-14. End: 2014-02-28.

What specific survivability enhancements were provided under this contract?

The contract data indicates the provision of 'enhanced survivability capabilities to Stryker vehicles.' While specific technical details are not publicly detailed in the provided data, these enhancements typically involve upgrades to armor protection, blast mitigation systems, electronic countermeasures, and potentially improved situational awareness systems designed to protect against threats encountered in environments like Operation Enduring Freedom (OEF). These could include add-on armor kits, spall liners, improved mine blast protection, and potentially active protection systems. The exact nature of the enhancements would be detailed in the contract's Statement of Work (SOW).

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For specialized military vehicle upgrades like enhanced survivability for Stryker platforms, this could be due to proprietary technology, unique manufacturing capabilities held by GM GDLS Defense Group, L.L.C., or a determination that only this contractor could provide the necessary modifications within the required timeframe to support ongoing operations. The specific justification would be documented by the Department of the Army at the time of the award.

What are the risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of work?

Cost Plus Fixed Fee (CPFF) contracts carry inherent risks, primarily related to cost control. The government agrees to pay the contractor's actual allowable costs plus a predetermined fixed fee. This structure can incentivize the contractor to incur higher costs, as their fee remains constant regardless of the final cost. Effective oversight, stringent cost accounting standards, and clear performance metrics are crucial to mitigate the risk of cost overruns and ensure the government receives good value. For survivability upgrades, where R&D and unforeseen challenges can arise, CPFF might be chosen for flexibility but requires diligent management.

How does this contract compare to other spending on Stryker vehicle upgrades?

Comparing this $316 million contract requires context regarding the scope and duration. Stryker vehicle upgrades encompass a wide range of modifications, from basic maintenance to advanced combat system integration. This specific contract focuses on survivability, a critical but specialized area. Without access to detailed historical spending data on all Stryker modifications, a direct comparison is difficult. However, the substantial value suggests a significant upgrade package or a long-term sustainment effort for a large number of vehicles, aligning with the high costs associated with modern military hardware sustainment and enhancement.

What is the track record of GM GDLS Defense Group, L.L.C. in providing Stryker vehicle support?

General Dynamics Land Systems (GDLS), often in partnership or through subsidiaries like GM GDLS Defense Group, L.L.C., has a long and established track record as a primary developer and manufacturer of the Stryker family of vehicles. They have been involved in the Stryker program since its inception, including production, upgrades, and sustainment. Their extensive experience with the platform suggests a deep understanding of its design, capabilities, and potential vulnerabilities, making them a logical choice for survivability enhancements. Their history includes numerous contracts with the Department of Defense for various armored vehicle programs.

What is the potential impact of this contract on future defense spending for vehicle survivability?

This contract could set a precedent for future survivability upgrade programs. If the enhancements prove effective and the CPFF structure is managed well, it might inform how similar upgrades are procured. Conversely, if cost overruns occur or effectiveness is questioned, it could lead to greater scrutiny of sole-source awards and CPFF contracts for such systems. The focus on survivability also reflects the ongoing evolution of threats on the battlefield, suggesting continued investment in protecting military platforms against increasingly sophisticated weaponry.

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: 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: $316,098,627

Exercised Options: $316,098,627

Current Obligation: $316,098,627

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV07DM112

IDV Type: IDC

Timeline