DoD Awards $741M Abrams Upgrade Contract to General Dynamics Land Systems

Contract Overview

Contract Amount: $741,771,276 ($741.8M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2005-06-02

End Date: 2031-12-01

Contract Duration: 9,678 days

Daily Burn Rate: $76.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200509!007794!2100!W56HZV!TACOM - WARREN !DAAE0701CN075 !A!N! !N! !P00139!20050602!20040731!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND ROAD !STERLING HEIGH !MI!48310!84000!099!26!WARREN !MACOMB !MICHIGAN !+000000154600!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !575 !ABRAMS UPGRADE !541330!A!B!3! ! !H! ! !20200930!B! ! !A! !D!N!U!1!001!N!1B!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $741.8 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: 200509!007794!2100!W56HZV!TACOM - WARREN !DAAE0701CN075 !A!N! !N! !P00139!20050602!20040731!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND ROAD !STERLING HEIGH !MI!48310!84000!099!26!WARREN !MACO… Key points: 1. Significant investment in combat vehicle modernization. 2. Sole-source award raises questions about competition and pricing. 3. Potential for cost overruns given the contract type. 4. Defense sector spending on vehicle upgrades is substantial.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to higher costs than fixed-price contracts. Benchmarking against similar Abrams upgrade contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, limiting opportunities for competitive bidding. This approach may not yield the best price for taxpayers.

Taxpayer Impact: The lack of competition could result in higher costs for taxpayers compared to a fully competed contract.

Public Impact

Modernization of critical Army ground combat vehicles. Ensures continued technological advantage for U.S. armored forces. Supports jobs in Michigan's defense manufacturing sector. Potential for extended service life of existing Abrams fleet.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration

Positive Signals

Modernization of critical defense asset
Potential for technological advancement

Sector Analysis

This contract falls within the Defense sector, specifically for combat vehicles. Spending on military vehicle upgrades is a significant portion of the DoD budget, often involving complex engineering and manufacturing.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract. Large prime contractors like General Dynamics often subcontract, but direct small business participation is not evident here.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides oversight for DoD contracts. However, the sole-source nature and cost-plus fee structure warrant close monitoring to ensure cost control and performance.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns due to contract type
Long contract duration increases risk exposure
Dependency on a single supplier
Unclear small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $741.8 million to GENERAL DYNAMICS LAND SYSTEMS INC.. 200509!007794!2100!W56HZV!TACOM - WARREN !DAAE0701CN075 !A!N! !N! !P00139!20050602!20040731!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND ROAD !STERLING HEIGH !MI!48310!84000!099!26!WARREN !MACOMB !MICHIGAN !+000000154600!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !575 !ABRAMS UPGRADE !541330!A!B!3! ! !H! ! !202

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS LAND SYSTEMS INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $741.8 million.

What is the period of performance?

Start: 2005-06-02. End: 2031-12-01.

What is the specific justification for the sole-source award, and how was the fixed fee determined?

The justification for a sole-source award typically involves unique capabilities or urgent needs that only one contractor can meet. The fixed fee in a Cost Plus Fixed Fee contract is negotiated upfront and represents the contractor's profit. Without detailed documentation, it's difficult to assess if this fee is reasonable or if it adequately incentivizes cost efficiency.

What are the key performance metrics and risk mitigation strategies for this long-term upgrade program?

Key performance metrics would likely include successful integration of new technologies, reliability improvements, and meeting upgrade schedules. Risk mitigation strategies should address potential technical challenges, supply chain disruptions, and cost overruns. Given the complexity of upgrading a major weapons system, robust oversight and clear performance standards are crucial.

How does this upgrade program align with the Army's future combat vehicle strategy and potential obsolescence concerns?

This upgrade program aims to extend the operational life and enhance the capabilities of the existing Abrams fleet, aligning with the Army's strategy to maintain a modernized armored force. It addresses potential obsolescence by incorporating newer technologies. However, it's important to ensure these upgrades don't preclude future investments in next-generation combat vehicles.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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 RD, STERLING HEIGHTS, MI, 48310

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline