DoD awards $5.57B for FMTV trucks, with BAE Systems as sole source, raising competition concerns

Contract Overview

Contract Amount: $7,052,768,925 ($7.1B)

Contractor: BAE Systems Tactical Vehicle Systems LP

Awarding Agency: Department of Defense

Start Date: 2003-04-17

End Date: 2009-11-30

Contract Duration: 2,419 days

Daily Burn Rate: $2.9M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200502!000833!2100!W56HZV!TACOM - WARREN !DAAE0703CS023 !A!N! !N! !P00031!20041101!20081115!557414000!557414000!007932783!N!STEWART & STEVENSON TACTICAL V!5000 INTERSTATE 10 HWY !SEALY !TX!77474!66464!015!48!SEALY !AUSTIN !TEXAS !+000000569789!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4B!NON-COMBAT VEHICLES !746 !FMTV !336212!E! !3! ! !D! ! !20200930!B! ! !A! !A!Y!J!2!002!N!1G!A!N!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: SEALY, COLORADO County, TEXAS, 77474

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $7.05 billion to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP for work described as: 200502!000833!2100!W56HZV!TACOM - WARREN !DAAE0703CS023 !A!N! !N! !P00031!20041101!20081115!557414000!557414000!007932783!N!STEWART & STEVENSON TACTICAL V!5000 INTERSTATE 10 HWY !SEALY !TX!77474!66464!015!48!SEALY !AUST… Key points: 1. The contract value is substantial at $5.57 billion, indicating significant government investment. 2. BAE Systems is the sole source provider, raising questions about competition and potential price inflation. 3. The contract spans over 10 years, suggesting a long-term need for these vehicles. 4. The sector is Defense, specifically wheeled vehicles, a critical component of military logistics.

Value Assessment

Rating: questionable

The contract value of $5.57 billion is high. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar large-scale vehicle procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning BAE Systems was the only bidder. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this multi-billion dollar contract likely results in a higher cost to taxpayers than a competitively bid contract would.

Public Impact

Taxpayers may be overpaying for essential military vehicles due to the absence of competitive bidding. The long-term nature of the contract could lock the DoD into a single supplier, limiting future flexibility. This award highlights potential vulnerabilities in the government's procurement process for critical defense assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value
Long contract duration

Positive Signals

Addresses a critical military need
Potential for long-term supply chain stability

Sector Analysis

This contract falls within the Defense sector, specifically for wheeled vehicles. Spending benchmarks for similar large-scale vehicle procurements are difficult to establish without competitive data, but the scale suggests a significant portion of the defense budget allocated to logistics.

Small Business Impact

There is no indication in the provided data that small businesses were involved in this sole-source contract, suggesting a missed opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this large contract warrants scrutiny from oversight bodies to ensure the government received the best possible value and that the justification for sole-sourcing was robust.

Related Government Programs

Truck Trailer Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for inflated pricing due to sole-source award.
Lack of competitive pressure may reduce incentive for cost efficiency.
Long-term commitment limits flexibility in adopting newer technologies.
Limited transparency in the procurement process.
Missed opportunities for small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.05 billion to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP. 200502!000833!2100!W56HZV!TACOM - WARREN !DAAE0703CS023 !A!N! !N! !P00031!20041101!20081115!557414000!557414000!007932783!N!STEWART & STEVENSON TACTICAL V!5000 INTERSTATE 10 HWY !SEALY !TX!77474!66464!015!48!SEALY !AUSTIN !TEXAS !+000000569789!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4B!NON-COMBAT VEHICLES !746 !FMTV !336212!E! !3! ! !D! ! !202

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $7.05 billion.

What is the period of performance?

Start: 2003-04-17. End: 2009-11-30.

What was the specific justification provided by the Department of Defense for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified by factors such as unique capabilities, urgent need, or lack of viable alternatives. A thorough review would require access to the contract's justification documentation.

How does the per-unit cost of these FMTV trucks compare to similar vehicles procured competitively by other agencies or allies?

Without a competitive benchmark or detailed cost breakdowns, it is impossible to accurately assess the per-unit cost. The sole-source nature of this award prevents a direct comparison to competitively priced alternatives, making it difficult to determine if taxpayers received fair value.

What measures are in place to ensure the ongoing effectiveness and quality of the vehicles supplied by BAE Systems under this long-term sole-source contract?

While the contract is sole-source, the Department of Defense and the Defense Contract Management Agency (DCMA) would typically have quality assurance and performance monitoring processes in place. These would include inspections, testing, and adherence to specifications to ensure the vehicles meet required standards.

Industry Classification

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

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 2941 FAIRVIEW PARK DR STE 100, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,411,686,027

Exercised Options: $3,411,686,027

Current Obligation: $7,052,768,925

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline