DoD's $21.6M Allison Transmission Contract: Long-Term, Non-Competed Deal for Vehicle Parts

Contract Overview

Contract Amount: $21,599,421 ($21.6M)

Contractor: Allison Transmission, Inc.

Awarding Agency: Department of Defense

Start Date: 1999-07-01

End Date: 2011-12-31

Contract Duration: 4,566 days

Daily Burn Rate: $4.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $21.6 million to ALLISON TRANSMISSION, INC. for work described as: Key points: 1. Significant long-term spending of $21.6 million over 12 years. 2. Sole-source award indicates potential lack of competition. 3. Cost-plus-fixed-fee structure may incentivize higher costs. 4. Sector focus on vehicle transmission parts manufacturing.

Value Assessment

Rating: questionable

The contract's duration and cost-plus-fixed-fee structure raise concerns about value for money. Without competitive bidding, it's difficult to benchmark pricing against similar contracts for vehicle transmission parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition over a long period may result in taxpayers paying more than necessary for these critical vehicle parts.

Public Impact

Military readiness may depend on these specialized transmission parts. Long-term contracts can ensure supply chain stability for essential equipment. Potential for cost overruns due to the contract type and lack of competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus-fixed-fee structure
Long contract duration

Positive Signals

Ensured supply of critical parts
Long-term relationship with a known supplier

Sector Analysis

This contract falls within the Motor Vehicle Transmission and Power Train Parts Manufacturing sector. Spending benchmarks for similar long-term, sole-source contracts in this niche manufacturing area are difficult to establish without competitive data.

Small Business Impact

The data does not indicate whether small businesses were involved in subcontracting opportunities. The sole-source nature of this large contract likely limited direct participation by small businesses.

Oversight & Accountability

The long duration and sole-source nature of this contract warrant scrutiny. Oversight should focus on ensuring the fixed fee remains reasonable and that the government is not overpaying for the parts provided.

Related Government Programs

Motor Vehicle Transmission and Power Train Parts Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for overpayment due to lack of competition.
Cost-plus structure shifts cost overrun risk to the government.
Long contract duration may reduce flexibility and responsiveness to market changes.
Lack of transparency regarding the sole-source justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.6 million to ALLISON TRANSMISSION, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION, 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 $21.6 million.

What is the period of performance?

Start: 1999-07-01. End: 2011-12-31.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of adequate competition. For specialized vehicle parts like transmissions, a specific manufacturer might possess unique expertise or tooling that makes competition impractical or excessively costly. Further investigation into the specific reasons cited by the Department of Defense would be necessary.

How were costs controlled under the Cost Plus Fixed Fee structure over such a long period?

Cost Plus Fixed Fee contracts aim to control costs by fixing the contractor's profit margin. However, the 'cost plus' portion means the government bears the risk of cost overruns. Effective oversight, including detailed audits of incurred costs and rigorous negotiation of the fixed fee, would be crucial to prevent excessive spending over the contract's 12-year duration.

What is the current status and performance of these transmissions in the field?

Assessing the current performance and reliability of the transmissions supplied under this contract is vital for understanding the overall value. This would involve reviewing maintenance records, failure rates, and operational feedback from military units utilizing the equipment. Positive field performance could partially offset concerns about the contract's structure, while negative performance would amplify cost-related issues.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Parts Manufacturing › Motor Vehicle Transmission and Power Train Parts Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

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: Allison Transmission Inc

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,300,000

Exercised Options: $22,108,045

Current Obligation: $21,599,421

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline