Army Awards $1.06 Billion for 115 Armored Vehicles to GM GDLS Defense Group
Contract Overview
Contract Amount: $1,063,505,309 ($1.1B)
Contractor: GM Gdls Defense Group, L.L.C.
Awarding Agency: Department of Defense
Start Date: 2011-09-23
End Date: 2014-10-31
Contract Duration: 1,134 days
Daily Burn Rate: $937.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CALL-UP OF THE 115 VEHICLES
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $1.06 billion to GM GDLS DEFENSE GROUP, L.L.C. for work described as: CALL-UP OF THE 115 VEHICLES Key points: 1. Significant contract value of over $1 billion. 2. Sole-source award to GM GDLS Defense Group raises competition concerns. 3. Potential for cost overruns with Cost Plus Fixed Fee contract type. 4. Focus on military armored vehicle manufacturing within the defense sector.
Value Assessment
Rating: questionable
The contract value of $1.06 billion for 115 vehicles suggests a high per-unit cost. Without specific unit pricing or benchmarks for similar armored vehicles, it's difficult to definitively assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to GM GDLS Defense Group. This lack of competition limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The sole-source nature of this large award means taxpayers may not have benefited from competitive pricing, potentially leading to increased expenditure.
Public Impact
Direct impact on military readiness and troop protection through acquisition of armored vehicles. Economic impact on the defense manufacturing sector, specifically in Michigan. Potential for long-term sustainment and maintenance costs associated with these vehicles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
Positive Signals
- Acquisition of critical military assets
- Award to established defense contractor
Sector Analysis
This contract falls within the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. Spending in this area is critical for national defense but requires careful oversight due to high costs and specialized nature.
Small Business Impact
The data does not indicate any specific provisions or benefits for small businesses in this contract award. The prime contractor is a large entity, suggesting limited direct opportunities for small businesses.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. Accountability for cost management under the Cost Plus Fixed Fee structure is crucial.
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 cost overruns
- High per-unit cost (inferred)
- Sole-source award
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.06 billion to GM GDLS DEFENSE GROUP, L.L.C.. CALL-UP OF THE 115 VEHICLES
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 $1.06 billion.
What is the period of performance?
Start: 2011-09-23. End: 2014-10-31.
What is the justification for awarding this contract on a sole-source basis rather than through full and open competition?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or the unavailability of other sources. Without specific documentation, it's presumed the Army determined GM GDLS Defense Group was the only viable option to meet specific requirements within the given timeframe, though this limits competitive pressure on pricing.
What are the projected cost overruns or efficiencies achieved under this Cost Plus Fixed Fee contract?
Cost Plus Fixed Fee contracts allow the contractor to recover costs plus a predetermined fee. While providing incentives for cost control, they can still lead to overruns if initial estimates are inaccurate or scope changes occur. Detailed financial reporting and audits are necessary to track actual costs against the fixed fee and assess overall efficiency.
How does the per-unit cost of these 115 vehicles compare to similar armored vehicles procured by other military branches or allied nations?
Benchmarking the per-unit cost against similar vehicles is essential for value assessment. Without access to specific unit cost breakdowns and comparative data, it's challenging to determine if this $1.06 billion award represents a fair market price. Such comparisons would highlight potential inefficiencies or cost savings.
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: $1,063,505,309
Exercised Options: $1,063,505,309
Current Obligation: $1,063,505,309
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: 2011-09-23
Current End Date: 2014-10-31
Potential End Date: 2014-10-31 12:10:00
Last Modified: 2015-12-04
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