DoD's $30.2M Allison Transmission contract for X200-4A transmissions shows a lack of competition

Contract Overview

Contract Amount: $30,224,951 ($30.2M)

Contractor: Allison Transmission, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-09-18

End Date: 2007-09-30

Contract Duration: 1,473 days

Daily Burn Rate: $20.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: X200-4A TRANSMISSIONS DELIVERY SCHEDULE CHANGE.

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $30.2 million to ALLISON TRANSMISSION, INC. for work described as: X200-4A TRANSMISSIONS DELIVERY SCHEDULE CHANGE. Key points: 1. The contract was awarded on a sole-source basis, indicating limited or no competitive bidding. 2. The duration of the contract (over 4 years) suggests a significant, long-term need for these transmissions. 3. The firm-fixed-price contract type aims to provide cost certainty for the government. 4. The absence of small business set-asides suggests this contract was not specifically targeted for small business participation. 5. The procurement falls under the Motor Vehicle Body Manufacturing NAICS code, related to vehicle components.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging without comparable sole-source awards for X200-4A transmissions. However, the lack of competition inherently raises concerns about whether the government achieved the best possible price. The firm-fixed-price structure provides some cost control, but the absence of competitive pressure means the price may not reflect market-driven efficiencies. Further analysis would require understanding the unique nature of these transmissions and the availability of alternative suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one bidder, Allison Transmission, Inc., was considered. This typically occurs when a unique capability or proprietary technology is required, or when there is an insufficient number of responsible sources. The lack of competition means the government did not benefit from price discovery through a bidding process, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it's difficult to ascertain if the price reflects true market value or if it includes a higher profit margin for the sole provider.

Public Impact

The primary beneficiaries are the Department of the Army, receiving critical X200-4A transmissions for its vehicle fleet. The services delivered involve the manufacturing and delivery of specialized transmission systems. The geographic impact is primarily within Indiana, where Allison Transmission, Inc. is located, potentially supporting local jobs. Workforce implications include the skilled labor required for the manufacturing of complex automotive components at Allison Transmission.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the sole-source justification process could mask inefficiencies.
Long contract duration without competition may reduce incentives for cost optimization by the contractor.

Positive Signals

Firm-fixed-price contract provides budget certainty for the Department of the Army.
Award to a known entity, Allison Transmission, Inc., may ensure a reliable supply chain for critical components.
The contract specifies a delivery schedule, indicating a structured approach to fulfilling the requirement.

Sector Analysis

This contract falls within the broader automotive manufacturing sector, specifically focusing on powertrain components. The market for heavy-duty transmissions is often characterized by a few key players due to the specialized engineering and manufacturing capabilities required. While the NAICS code is for Motor Vehicle Body Manufacturing, the product is a critical transmission system. Comparable spending benchmarks would involve analyzing other sole-source or limited-competition awards for similar high-value vehicle components within the defense sector.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb': false. Consequently, there are no direct subcontracting implications for small businesses mandated by this specific award. The focus was likely on securing the required transmissions from a specialized manufacturer, rather than promoting small business participation through set-asides.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting officers and program managers responsible for vehicle procurement. Accountability measures are embedded in the firm-fixed-price contract terms and the defined delivery schedule. Transparency is limited due to the sole-source nature of the award, with public details typically restricted to contract award notices. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Vehicle Procurement
Heavy-Duty Truck and Vehicle Components
Military Vehicle Fleet Modernization
Allison Transmission Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.2 million to ALLISON TRANSMISSION, INC.. X200-4A TRANSMISSIONS DELIVERY SCHEDULE CHANGE.

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $30.2 million.

What is the period of performance?

Start: 2003-09-18. End: 2007-09-30.

What is the track record of Allison Transmission, Inc. with the Department of Defense for similar transmission systems?

Allison Transmission, Inc. has a long-standing relationship with the Department of Defense, supplying transmissions for various military vehicles. Their expertise in heavy-duty automatic transmissions is well-established. Historical data indicates numerous awards for transmission systems and related services across different branches of the military. While specific details on past sole-source awards for the X200-4A model are not readily available in this summary, their consistent presence as a supplier suggests a proven capability to meet military specifications. Further investigation into contract databases could reveal the volume and value of their prior work with the DoD, providing a clearer picture of their performance and reliability in fulfilling defense requirements.

How does the per-unit cost of the X200-4A transmission in this contract compare to market rates or similar government contracts?

Determining the precise per-unit cost and comparing it to market rates is challenging without the detailed pricing breakdown of this specific contract and access to proprietary market data. As a sole-source award, the price was negotiated directly with Allison Transmission, Inc., and may not reflect the competitive pricing typically seen in open markets. To benchmark effectively, one would need to identify comparable government contracts for the same or similar transmission models, ideally those awarded through competitive processes. Additionally, analyzing the cost of transmissions for commercial heavy-duty vehicles could offer a baseline, though military-grade specifications often command higher prices due to durability and performance requirements. The absence of competitive bids inherently limits the ability to definitively state if the price achieved represents optimal value for taxpayers.

What are the specific risks associated with awarding a sole-source contract for critical vehicle components like transmissions?

The primary risk of a sole-source award for critical components like transmissions is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government relinquishes a key mechanism for price discovery and negotiation, potentially leading to higher costs. Another risk is vendor lock-in, where the government becomes dependent on a single supplier, limiting future flexibility and potentially facing supply chain disruptions if that supplier encounters issues. Furthermore, sole-source contracts can reduce the incentive for the contractor to innovate or improve efficiency, as there is no direct competitive threat. Ensuring the necessity and justification for a sole-source award is crucial to mitigate these risks, often requiring rigorous documentation and approval processes.

What is the expected program effectiveness or impact of receiving these X200-4A transmissions for the Department of the Army?

The expected program effectiveness hinges on the X200-4A transmissions fulfilling their intended role within the Army's vehicle fleet. These transmissions are likely critical components for the operational readiness and performance of specific military vehicles. By securing a supply of these transmissions, the Army aims to maintain, repair, or upgrade its existing fleet, ensuring vehicles remain functional and capable of meeting mission requirements. The effectiveness is measured by the reliability and durability of the transmissions in demanding operational environments, contributing to the overall mission success and logistical support of Army operations. The timely delivery, as stipulated in the contract, is also key to maintaining fleet availability.

How has historical spending on Allison Transmission products by the Department of Defense trended over the past five years?

Analyzing historical spending trends for Allison Transmission products by the Department of Defense over the past five years would require accessing comprehensive contract databases. Generally, Allison Transmission has been a consistent supplier of transmissions for various military applications. Spending patterns can fluctuate based on fleet modernization programs, operational tempo, and specific vehicle procurement cycles. Without direct access to aggregated spending data for this period, it's difficult to provide precise figures. However, it's reasonable to assume that spending has been substantial, reflecting the ongoing need for reliable powertrain components in the DoD's vast vehicle inventory. Factors like the specific models procured and the nature of the contracts (e.g., new builds vs. sustainment) would influence the year-over-year expenditure.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Motor Vehicle Body Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Allison Transmission Inc (UEI: 804407463)

Address: 4700 W 10TH ST, INDIANAPOLIS, IN, 46222

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline