DoD's $2B truck contract awarded to Stewart & Stevenson Services, Inc. for wheeled vehicles

Contract Overview

Contract Amount: $2,053,430,975 ($2.1B)

Contractor: BAE Systems Tactical Vehicle Systems LP

Awarding Agency: Department of Defense

Start Date: 1998-10-14

End Date: 2007-02-28

Contract Duration: 3,059 days

Daily Burn Rate: $671.3K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199902!2100!0077!AE07 !USA TANK-AUTOMOTIVE & ARMAMENTS !DAAE0798CM005 !A!*!* !19981014!20031231!557414000!007932783!007932783!N!0FW39!STEWART & STEVENSON SERVICES, !5000 INTERSTATE 10 W !SEALY !TX!77474!66464!015!48!SEALY !AUSTIN !TEXAS !0001!+000027046877!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4B!NON-COMBAT VEHICLES !1DAF!TRUCKS 5T !3711!3!*!*!*!B!A!*!C !Y!J!1!001!N!1A!A!Y!F!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SEALY, AUSTIN County, TEXAS, 77474

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $2.05 billion to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP for work described as: 199902!2100!0077!AE07 !USA TANK-AUTOMOTIVE & ARMAMENTS !DAAE0798CM005 !A!*!* !19981014!20031231!557414000!007932783!007932783!N!0FW39!STEWART & STEVENSON SERVICES, !5000 INTERSTATE 10 W !SEALY !TX!77474!66464!015!48!SEALY !AUSTIN… Key points: 1. Contract value of over $2 billion suggests a significant investment in tactical wheeled vehicles. 2. The award was a follow-on to a competed action, indicating potential for competitive pricing. 3. The contract's duration of over 8 years (from award to final delivery) implies a long-term need. 4. The primary product service code (PSC) for trucks and truck tractors suggests a focus on logistics and transport. 5. The contract's 'firm fixed price' type aims to control costs for the government. 6. The geographic location of the contractor in Texas may have implications for regional economic impact.

Value Assessment

Rating: good

The total contract value of approximately $2.05 billion over its lifespan is substantial. While direct comparisons are difficult without knowing the exact specifications and quantities, the firm fixed price nature of the award suggests an effort to manage costs. The contract was a follow-on to a competed action, which generally supports better pricing than a sole-source award. Benchmarking this against other large vehicle procurements would be necessary for a definitive value assessment, but the scale indicates a significant commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was a 'FOLLOW ON TO COMPETED ACTION,' suggesting that the initial award was competed, but this specific action may have had limited competition. The details provided do not specify the number of bidders for this particular follow-on action. A limited competition could lead to less aggressive pricing compared to a full and open competition, but it might also be justified if the follow-on work is closely related to the original scope and the incumbent contractor has unique knowledge or capabilities.

Taxpayer Impact: For taxpayers, a limited competition on a follow-on action carries a moderate risk of elevated prices compared to a fully competed scenario. However, if the follow-on is a logical extension of the original, it may leverage efficiencies gained from the initial competition.

Public Impact

The U.S. Army benefits from the acquisition of essential wheeled vehicles for its operations. Services delivered include the provision of trucks and truck tractors, crucial for logistics and troop movement. The geographic impact is national, supporting military readiness across various deployments. Workforce implications include jobs at Stewart & Stevenson Services, Inc. and its supply chain, primarily in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to limited competition on follow-on actions.
Long contract duration could lead to scope creep or evolving requirements not fully captured in initial pricing.
Dependence on a single contractor for a large fleet of vehicles could pose supply chain risks.

Positive Signals

Firm fixed price contract type helps to lock in costs and reduce budget uncertainty.
Follow-on to competed action suggests initial price discovery was achieved.
Long-term contract provides stability for the contractor and ensures sustained availability of critical assets.

Sector Analysis

This contract falls within the Defense sector, specifically concerning the procurement of tactical wheeled vehicles. The market for military vehicles is dominated by a few large defense contractors. Spending in this area is driven by military readiness requirements, modernization programs, and operational tempo. Comparable spending benchmarks would involve looking at other large vehicle procurement contracts within the Department of Defense, such as those for armored vehicles or specialized transport.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large, multi-billion dollar definitive contract, it is unlikely to have been solely set aside for small businesses. However, the prime contractor, Stewart & Stevenson Services, Inc., may be required to subcontract a portion of the work to small businesses as part of its overall contract obligations, contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which ensures contractors meet contractual requirements. Accountability measures are embedded in the firm fixed price structure and delivery schedules. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tactical Wheeled Vehicles Program
Logistics and Transport Vehicle Procurement
Heavy Equipment Acquisition
Military Truck Fleet Modernization

Risk Flags

Long contract duration increases risk of obsolescence and cost escalation.
Limited competition on follow-on actions may impact price.
Dependence on a single contractor for a large volume of critical assets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.05 billion to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP. 199902!2100!0077!AE07 !USA TANK-AUTOMOTIVE & ARMAMENTS !DAAE0798CM005 !A!*!* !19981014!20031231!557414000!007932783!007932783!N!0FW39!STEWART & STEVENSON SERVICES, !5000 INTERSTATE 10 W !SEALY !TX!77474!66464!015!48!SEALY !AUSTIN !TEXAS !0001!+000027046877!N!N!000000000000!2320!TRUCKS AND TRUCK TRACTORS, WHEELED !A4B!NON-COMBAT VEHICLES !1DAF!TRUCKS 5T !3711!3!*!*!*!B!A!*!C !Y!J!1!0

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 $2.05 billion.

What is the period of performance?

Start: 1998-10-14. End: 2007-02-28.

What was the competitive landscape for the initial award that this contract followed?

The provided data states this contract is a 'FOLLOW ON TO COMPETED ACTION.' This implies that the original contract award, which this one is based upon, underwent a competitive bidding process. However, the specifics of that initial competition, such as the number of bidders, the evaluation criteria, and the winning proposal's details, are not present in this data snippet. Understanding the initial competition is crucial for assessing whether the follow-on action benefits from the price discovery and innovation spurred by that original process, or if competition has since narrowed.

How does the per-unit cost of these trucks compare to similar vehicles procured by the DoD or allied nations?

Determining the precise per-unit cost is challenging without detailed specifications and quantities for the vehicles procured under this $2.05 billion contract. The data indicates the PSC is 'TRUCKS AND TRUCK TRACTORS, WHEELED' and a sub-category of 'TRUCKS 5T'. To perform a meaningful comparison, one would need to identify the specific truck models, their configurations (e.g., cargo, troop transport, specialized variants), the number of units procured, and the period of performance for each unit. Benchmarking against publicly available data for similar 5-ton class trucks procured by the DoD or international partners, accounting for inflation and differing contract terms (like firm-fixed-price vs. cost-plus), would be necessary.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, for a firm-fixed-price contract of this nature, typical KPIs would likely revolve around timely delivery of vehicles meeting specified technical requirements and quality standards. Other potential KPIs could include adherence to production schedules, defect rates, warranty performance, and potentially lifecycle cost metrics if factored into the original award. The government's contracting officer and program managers would monitor these aspects throughout the contract's duration.

What is Stewart & Stevenson Services, Inc.'s track record with large DoD vehicle procurement contracts?

Stewart & Stevenson Services, Inc. has a history of supplying vehicles to the U.S. military. They were a significant player in the Heavy Expanded Mobility Tactical Truck (HEMTT) program and other wheeled vehicle procurements. Their involvement in this $2.05 billion contract for trucks and truck tractors indicates continued relevance and capability in fulfilling large-scale military vehicle requirements. Past performance reviews and contract histories would provide a more granular assessment of their specific successes and challenges on similar programs.

How has spending on tactical wheeled vehicles evolved over the years, and where does this contract fit in?

Spending on tactical wheeled vehicles fluctuates based on military modernization cycles, operational demands (like deployments), and budget allocations. This $2.05 billion contract, awarded in 1998 and spanning through 2007, represents a significant investment during its period. It likely reflects a need to recapitalize or expand the fleet of 5-ton class wheeled vehicles. Historical spending data would show peaks and troughs related to major conflicts or strategic shifts. This contract appears to be a substantial procurement within its timeframe, addressing core logistical capabilities.

Are there any identified risks associated with the long duration (nearly 9 years) of this contract?

Yes, a contract duration of nearly nine years (from award date 1998-10-14 to estimated end date 2007-02-28) presents several potential risks. These include the risk of technological obsolescence, where the vehicles procured might be outdated by the time the contract fully concludes. There's also the risk of escalating costs if the firm-fixed-price agreement doesn't adequately account for long-term inflation or material cost fluctuations. Furthermore, managing a contract over such an extended period can be challenging for oversight personnel, potentially leading to issues with scope creep, changes in requirements, or contractor performance degradation if not actively managed.

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 5000 INTERSTATE 10 W, SEALY, TX, 77474

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline