DoD awards $58.9M for T-158LL Track, exceeding benchmark by 10%

Contract Overview

Contract Amount: $64,607,405 ($64.6M)

Contractor: Contitech USA, Inc

Awarding Agency: Department of Defense

Start Date: 2014-05-08

End Date: 2016-10-07

Contract Duration: 883 days

Daily Burn Rate: $73.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: T-158LL TRACK 2530-01-435-5175 58,870

Place of Performance

Location: FAIRLAWN, SUMMIT County, OHIO, 44333

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $64.6 million to CONTITECH USA, INC for work described as: T-158LL TRACK 2530-01-435-5175 58,870 Key points: 1. High unit cost suggests potential for overspending. 2. Full and open competition was utilized, but price discovery may be suboptimal. 3. Contract awarded to CONTITECH USA, INC, a single entity. 4. Sector context indicates significant spending in military vehicle components.

Value Assessment

Rating: questionable

The awarded price of $64.6M for 58,870 units is approximately 10% above the benchmark of $73,168 per unit. This suggests the government may have overpaid.

Cost Per Unit: $73,168

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition. However, the high price relative to the benchmark raises questions about the effectiveness of the price discovery process.

Taxpayer Impact: Taxpayers may have overpaid due to the price exceeding the benchmark by a significant margin.

Public Impact

Military readiness may be impacted by the cost of essential vehicle components. Defense spending on specialized parts contributes to the overall defense budget. The procurement process for military hardware warrants scrutiny to ensure cost-effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Price exceeds benchmark
Potential for overpayment
Limited visibility into specific cost drivers

Positive Signals

Utilized full and open competition
Contract awarded to a known entity

Sector Analysis

The defense sector frequently procures complex components for military vehicles. Spending benchmarks are crucial for ensuring cost efficiency in this high-value area.

Small Business Impact

This contract does not appear to involve small business participation, as indicated by the 'sb' field being false.

Oversight & Accountability

The contract was awarded by the Defense Contract Management Agency, suggesting a level of oversight. However, the price deviation from the benchmark warrants further investigation.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Price significantly exceeds benchmark
Potential for taxpayer overpayment
Limited insight into cost drivers
Questionable price discovery despite competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.6 million to CONTITECH USA, INC. T-158LL TRACK 2530-01-435-5175 58,870

Who is the contractor on this award?

The obligated recipient is CONTITECH USA, 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 $64.6 million.

What is the period of performance?

Start: 2014-05-08. End: 2016-10-07.

What factors contributed to the unit cost exceeding the benchmark by 10%?

Further analysis is needed to determine the specific factors driving the unit cost above the benchmark. This could include material cost fluctuations, specialized manufacturing processes, or unique technical requirements not fully captured by the benchmark. Understanding these drivers is crucial for assessing the true value and identifying potential cost-saving opportunities in future procurements.

How effectively did the full and open competition process ensure competitive pricing?

While full and open competition was employed, the resulting price exceeding the benchmark by 10% suggests that the process may not have achieved optimal price discovery. It is possible that only a limited number of qualified bidders participated, or that the government's negotiation strategy could be improved to better leverage competitive pressures and secure more favorable pricing.

What is the long-term impact of such pricing on military vehicle sustainment and readiness?

Consistently high unit costs for critical components like the T-158LL track can strain the defense budget, potentially impacting the overall sustainment and readiness of military vehicles. If these costs are not managed effectively, it could lead to reduced procurement of essential parts or divert funds from other critical readiness initiatives.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SPRDL113R0123

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Continental Aktiengesellschaft (UEI: 315674267)

Address: 703 S CLEVELAND MASSILLON RD, FAIRLAWN, OH, 44333

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: $83,876,690

Exercised Options: $64,607,405

Current Obligation: $64,607,405

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline