DoD's $43.75M GMRP Block 2 Contract Awarded to RAM-SYSTEM GMBH for Missile Manufacturing

Contract Overview

Contract Amount: $43,754,737 ($43.8M)

Contractor: Ram-System Gmbh

Awarding Agency: Department of Defense

Start Date: 2023-02-22

End Date: 2027-08-15

Contract Duration: 1,635 days

Daily Burn Rate: $26.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GMRP BLOCK 2 RECERTIFICATION

Plain-Language Summary

Department of Defense obligated $43.8 million to RAM-SYSTEM GMBH for work described as: GMRP BLOCK 2 RECERTIFICATION Key points: 1. Significant contract value of $43.75 million for guided missile and space vehicle manufacturing. 2. Sole-source award to RAM-SYSTEM GMBH raises questions about competition and potential price discovery. 3. Long contract duration of 1635 days (over 4 years) warrants close monitoring for cost overruns. 4. FIRM FIXED PRICE contract type offers some cost certainty, but initial pricing needs scrutiny.

Value Assessment

Rating: questionable

The contract value of $43.75M for GMRP Block 2 recertification is substantial. Without comparable contract data or a competitive bidding process, it is difficult to assess if this price is optimal. The fixed-price nature provides some predictability, but the lack of competition is a concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for taxpayers. The justification for sole-source procurement needs to be thoroughly reviewed.

Taxpayer Impact: The lack of competition in this sole-source award could result in inflated prices, directly impacting taxpayer funds negatively.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract could lock in potentially inefficient pricing. Ensuring the necessity and justification for a sole-source award is crucial for accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Long contract duration increases risk of cost escalation.
Lack of transparency in initial pricing assessment.

Positive Signals

FIRM FIXED PRICE contract type offers cost certainty.
Clear identification of the specific system (GMRP Block 2).

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical area for national defense. Spending in this specialized sector is often characterized by high R&D costs and limited contractor pools, making competitive sourcing challenging but essential.

Small Business Impact

The data provided does not indicate any specific provisions or set-asides for small businesses in this contract. Given the specialized nature of guided missile manufacturing, it is likely that larger, established defense contractors are involved, potentially limiting small business participation.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure the contractor is meeting all performance requirements and that the pricing remains fair and reasonable throughout the contract's duration. Auditing and regular performance reviews are critical.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Long contract duration
Potential for uncompetitive pricing
Limited transparency on price justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.8 million to RAM-SYSTEM GMBH. GMRP BLOCK 2 RECERTIFICATION

Who is the contractor on this award?

The obligated recipient is RAM-SYSTEM GMBH.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $43.8 million.

What is the period of performance?

Start: 2023-02-22. End: 2027-08-15.

What is the specific justification for awarding this GMRP Block 2 recertification contract on a sole-source basis to RAM-SYSTEM GMBH, and what steps were taken to ensure the price is fair and reasonab

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Department of Defense should have conducted a thorough market research analysis and price reasonableness assessment, potentially using historical data or independent cost estimates, to validate the proposed price. Transparency regarding this justification is key to public trust.

Given the 4+ year duration and sole-source nature, what are the primary risks to the government regarding cost control and performance over the life of this contract?

The primary risks include potential cost creep if the fixed price was not adequately benchmarked against market realities, and performance issues if oversight is lax. Without competition, there's less incentive for the contractor to innovate or reduce costs. The government must implement stringent performance monitoring, regular progress reviews, and potentially incorporate incentive clauses or penalties to mitigate these risks effectively.

How does the $43.75 million expenditure for GMRP Block 2 recertification align with broader Department of Defense spending priorities and benchmarks for similar missile system sustainment or upgrades?

Assessing alignment requires comparing this expenditure against historical spending on similar missile systems, considering factors like technological complexity, quantity, and contract type. Without access to classified or internal DoD budget data, it's difficult to provide a precise benchmark. However, the significant value suggests a critical system, and its recertification cost should be evaluated against the total lifecycle cost of the weapon system.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002422R5404

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: DAIMLERSTR. 11, OTTOBRUNN

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $45,591,533

Exercised Options: $43,754,737

Current Obligation: $43,754,737

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline