DoD's $148M Stryker Battle Damage Repair Contract Lacked Competition, Raising Cost Concerns
Contract Overview
Contract Amount: $148,294,386 ($148.3M)
Contractor: GM Gdls Defense Group, L.L.C.
Awarding Agency: Department of Defense
Start Date: 2012-01-01
End Date: 2014-04-30
Contract Duration: 850 days
Daily Burn Rate: $174.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: STRYKER BATTLE DAMAGE REPAIR
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $148.3 million to GM GDLS DEFENSE GROUP, L.L.C. for work described as: STRYKER BATTLE DAMAGE REPAIR Key points: 1. Significant spending on vehicle repair without competitive bidding. 2. High contract value suggests potential for substantial cost savings through competition. 3. Lack of competition raises concerns about price discovery and taxpayer value. 4. Focus on armored vehicle manufacturing sector, critical for military readiness.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to assess value. The awarded amount of $148M for 850 delivery orders suggests a high per-unit cost, especially without a benchmark.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly hinders price discovery and likely results in higher costs for the government compared to a competitive process.
Taxpayer Impact: The absence of competition likely means taxpayers are paying a premium for these repair services, as the contractor faced no pressure to offer the most cost-effective solution.
Public Impact
Military readiness may be impacted if repair costs are inflated, diverting funds from other critical areas. Taxpayers bear the financial burden of potentially inflated prices due to the lack of competitive bidding. The Department of Defense's procurement practices are under scrutiny for efficiency and cost-effectiveness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- High total contract value
Positive Signals
- Essential military repair service
Sector Analysis
This contract falls within the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. Spending in this area is crucial for maintaining military operational capabilities, but competitive procurement is vital to ensure cost efficiency.
Small Business Impact
The data does not indicate any specific involvement or benefit to small businesses in this contract.
Oversight & Accountability
The lack of competition suggests potential weaknesses in oversight regarding cost-effectiveness. Further review is needed to ensure the fixed fee was appropriate and that costs were managed diligently.
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
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency on pricing justification
- No indication of small business participation
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 $148.3 million to GM GDLS DEFENSE GROUP, L.L.C.. STRYKER BATTLE DAMAGE REPAIR
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 $148.3 million.
What is the period of performance?
Start: 2012-01-01. End: 2014-04-30.
What was the rationale for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data states the contract was 'NOT COMPETED,' implying a sole-source award. The specific rationale is not detailed, but common reasons include urgency, lack of available sources, or unique technical requirements. Without further documentation, it's impossible to confirm if alternatives were explored, but the lack of competition itself raises concerns about potential missed opportunities for better pricing and innovation.
How does the Cost Plus Fixed Fee structure impact the government's ability to control costs in this battle damage repair scenario?
A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. While the fee is fixed, the government still bears the risk of cost overruns if actual costs exceed estimates. This structure can incentivize contractors to incur costs, and without strong oversight and a competitive baseline, it can lead to less cost efficiency compared to fixed-price contracts.
What is the estimated cost savings the DoD could have achieved if this contract had been competed?
Estimating precise savings without a competitive benchmark is speculative. However, industry studies and government reports consistently show that competitive bidding can yield savings ranging from 10% to 30% or more compared to sole-source awards, depending on the complexity and market dynamics. For a $148M contract, this could translate to tens of millions in potential savings for taxpayers.
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: $148,294,386
Exercised Options: $148,294,386
Current Obligation: $148,294,386
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: 2012-01-01
Current End Date: 2014-04-30
Potential End Date: 2014-04-30 12:04:00
Last Modified: 2017-08-25
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