DoD's $16.5M LAV-25 Driver Trainer contract awarded to KNDS USA INC. shows fair value

Contract Overview

Contract Amount: $16,495,922 ($16.5M)

Contractor: Knds USA Inc.

Awarding Agency: Department of Defense

Start Date: 2010-11-09

End Date: 2016-04-30

Contract Duration: 1,999 days

Daily Burn Rate: $8.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LAV-25 DRIVER TRAINERS

Place of Performance

Location: LYNCHBURG, LYNCHBURG CITY County, VIRGINIA, 24502

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $16.5 million to KNDS USA INC. for work described as: LAV-25 DRIVER TRAINERS Key points: 1. The contract's value appears reasonable when benchmarked against similar training systems. 2. Full and open competition suggests a competitive pricing environment. 3. The contract duration and fixed-price nature mitigate cost overrun risks. 4. This acquisition supports specialized vehicle training for the Navy. 5. The provider, KNDS USA INC., has a history in defense manufacturing and training solutions. 6. The contract falls within the professional, scientific, and technical services sector.

Value Assessment

Rating: good

The $16.5 million contract for LAV-25 Driver Trainers appears to represent good value. While direct comparisons for highly specialized training systems are difficult, the fixed-price nature of the contract provides cost certainty. Benchmarking against other complex simulation and training contracts suggests the pricing is within an acceptable range, especially considering the advanced technology likely involved in simulating a LAV-25 platform.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of three bidders suggests a healthy level of competition for this specialized requirement. This competitive process likely drove down prices and ensured the government received a fair market offering for the driver training systems.

Taxpayer Impact: Taxpayers benefit from competitive pricing achieved through a broad solicitation process, ensuring funds are used efficiently for essential defense training capabilities.

Public Impact

Naval personnel operating LAV-25 vehicles will receive enhanced training, improving operational readiness. The training systems contribute to safer and more effective operation of armored vehicles. This contract supports the modernization of military training infrastructure. The acquisition indirectly supports the defense industrial base through the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on support is not competitively procured.
Reliance on a single contractor for specialized training systems could pose long-term supply chain risks.

Positive Signals

Fixed-price contract structure limits the government's exposure to cost overruns.
Full and open competition indicates a robust market for these training solutions.
The contract supports critical operational training needs for the Navy.

Sector Analysis

The defense training and simulation market is a significant segment within the broader aerospace and defense industry. This contract for LAV-25 driver trainers fits within the specialized simulation and training solutions sub-sector. Spending in this area is driven by the need for realistic, cost-effective training that reduces wear on actual equipment and enhances operator proficiency. Comparable spending often involves complex simulators for various platforms, ranging from individual vehicles to aircraft and naval vessels.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While KNDS USA INC. is a prime contractor, there is potential for small businesses to participate as subcontractors, particularly in areas like component manufacturing or specialized technical services. The extent of small business subcontracting would depend on KNDS USA INC.'s sourcing strategy.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms. Accountability is maintained through contract performance monitoring and adherence to the firm-fixed-price terms. Transparency is generally provided through contract award databases, though specific performance metrics may be internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Vehicle Simulation Systems
Armored Personnel Carrier Training
Naval Combat Systems Training
Defense Logistics Agency (DLA) Support Services

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Specialized nature of training system could limit future competition if not managed proactively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.5 million to KNDS USA INC.. LAV-25 DRIVER TRAINERS

Who is the contractor on this award?

The obligated recipient is KNDS USA INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.5 million.

What is the period of performance?

Start: 2010-11-09. End: 2016-04-30.

What is the track record of KNDS USA INC. with similar defense training contracts?

KNDS USA INC., part of the KNDS Group, has a significant presence in the defense sector, known for manufacturing armored vehicles and related systems. While specific details on their past performance solely on driver training simulators for the LAV-25 are not publicly detailed in this award notice, the parent company's extensive experience in military vehicle production suggests a strong foundation for developing and delivering effective training solutions. Their portfolio often includes integrated systems that combine hardware and software for realistic simulation. Past performance evaluations by the DoD would typically assess their ability to meet technical specifications, delivery schedules, and budget requirements on previous contracts, influencing their selection for this LAV-25 trainer award.

How does the $16.5 million cost compare to similar LAV-25 driver training systems?

Directly comparing the $16.5 million cost for the LAV-25 driver trainers is challenging due to the specialized nature of such systems and the proprietary details often associated with them. However, the contract's firm-fixed-price structure and the fact that it was awarded under full and open competition with three bidders suggest that the price was deemed competitive and fair by the Department of the Navy. Benchmarking against other advanced military vehicle simulators, which can range from hundreds of thousands to several million dollars depending on fidelity and features, indicates that this figure is within a plausible range for a sophisticated training system designed for a specific platform like the LAV-25. The value is further supported by the contract's duration and the need for specialized, high-fidelity training.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential technological obsolescence of the training systems over time, performance issues with the simulators, and contractor viability. Mitigation strategies are embedded within the contract structure and oversight. The firm-fixed-price nature helps mitigate cost overrun risks for the government. The contract duration (though long, with specific performance periods) implies a need for reliable technology. The full and open competition suggests a market with multiple capable vendors, reducing reliance on a single source. Furthermore, standard DoD oversight, acceptance testing, and potential warranty clauses would address performance and reliability concerns. The contractor's established presence in the defense industry also suggests a degree of financial stability.

How effective are LAV-25 driver training simulators in improving operational readiness?

LAV-25 driver training simulators are highly effective tools for improving operational readiness by providing realistic, repeatable, and safe training environments. They allow drivers to practice complex maneuvers, emergency procedures, and tactical driving scenarios without the wear and tear on actual vehicles or the risks associated with live training. This leads to increased proficiency, reduced accident rates, and better preparedness for combat situations. By simulating various terrains, weather conditions, and potential threats, these systems ensure that drivers are well-equipped to handle diverse operational demands. The use of simulators also offers cost savings compared to extensive live-fire exercises and vehicle operation, making them a crucial component of modern military training strategies.

What has been the historical spending trend for LAV-25 related training systems by the Department of the Navy?

Analyzing the precise historical spending trend specifically for LAV-25 driver training systems by the Department of the Navy requires access to detailed procurement data beyond this single contract award. However, it is reasonable to infer that spending in this area would correlate with the operational tempo and modernization efforts related to the LAV-25 fleet. As the Navy maintains and operates these vehicles, investments in training simulators are necessary to ensure crew proficiency and readiness. Spending patterns would likely reflect cycles of equipment upgrades, new technology integration, and the need to replace aging training infrastructure. This $16.5 million contract represents a significant, albeit potentially infrequent, investment in maintaining a high standard of driver training for this specific platform.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: M6785409R8167

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: KMW + Nexter Defense Systems N.V. (UEI: 491781920)

Address: 30 MILLRACE DR, LYNCHBURG, VA, 24502

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,210,342

Exercised Options: $16,495,922

Current Obligation: $16,495,922

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline