Department of Defense awards $153M contract for armored vehicle components, with a 1276-day duration

Contract Overview

Contract Amount: $153,418,819 ($153.4M)

Contractor: Contitech USA, Inc

Awarding Agency: Department of Defense

Start Date: 2016-12-05

End Date: 2020-06-03

Contract Duration: 1,276 days

Daily Burn Rate: $120.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: T-158 TRACK 2530-01-435-5175 12387880-1 365806

Place of Performance

Location: FAIRLAWN, SUMMIT County, OHIO, 44333

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $153.4 million to CONTITECH USA, INC for work described as: T-158 TRACK 2530-01-435-5175 12387880-1 365806 Key points: 1. The contract's value of $153 million over approximately 3.5 years suggests a significant investment in military hardware. 2. Awarded under full and open competition, this contract indicates a market where multiple vendors could potentially bid. 3. The firm fixed-price contract type generally transfers risk to the contractor, potentially stabilizing costs. 4. The Defense Logistics Agency's role suggests a focus on maintaining and supplying existing military equipment. 5. The specific product code is not provided, making direct comparison to similar component manufacturing challenging. 6. The contract's duration of 1276 days points to a long-term need for these specialized components.

Value Assessment

Rating: good

The total contract value of $153 million over 1276 days averages to approximately $119,900 per day. Without specific details on the components or quantities, a direct per-unit cost benchmark is difficult. However, the firm fixed-price nature suggests that the pricing was determined to be acceptable at the time of award, balancing risk and reward between the government and the contractor. The absence of task orders or modifications in the provided data makes it challenging to assess cost growth or efficiency over the contract's life.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this type of competition is generally expected to foster a competitive environment, leading to potentially better pricing and innovation. The Defense Logistics Agency's decision to use full and open competition suggests confidence in the availability of multiple qualified suppliers for these armored vehicle components.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down prices through market forces, ensuring the government receives the best value for its investment in critical defense components.

Public Impact

The primary beneficiaries are the U.S. military branches relying on armored vehicles for operational readiness. The contract delivers essential components for the manufacturing and maintenance of military armored vehicles. The geographic impact is primarily within the United States, supporting domestic defense manufacturing capabilities. This contract likely supports a specialized manufacturing workforce within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific component details hinders granular value assessment.
Limited insight into the number of bidders impacts competition strength evaluation.
No data on task orders or modifications prevents analysis of cost performance over time.

Positive Signals

Awarded under full and open competition, indicating a healthy market.
Firm fixed-price contract type aligns incentives for cost control.
Long contract duration suggests a stable, ongoing requirement for these components.

Sector Analysis

This contract falls within the broader defense industrial base sector, specifically focusing on the manufacturing of armored vehicle components. The market for such specialized parts is often characterized by high barriers to entry due to technical expertise, stringent quality control, and security requirements. Spending in this area is directly tied to military modernization and readiness efforts. Comparable spending benchmarks would typically be found within the Defense Logistics Agency's or Department of the Army's procurement data for vehicle parts and manufacturing.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the direct impact on small business set-asides is none. However, the prime contractor, CONTITECH USA, INC, may engage small businesses as subcontractors to fulfill portions of this large contract, contributing indirectly to the small business ecosystem within the defense supply chain. Further analysis would be needed to determine the extent of any subcontracting to small businesses.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a firm fixed-price definitive contract, its execution is governed by the terms and conditions outlined in the award. The Defense Logistics Agency is responsible for monitoring contractor performance and compliance. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available.

Related Government Programs

Military Vehicle Procurement
Defense Logistics Agency Supply Chain Management
Armored Vehicle Manufacturing
Department of Defense Component Manufacturing

Risk Flags

Lack of detailed component specification.
Number of bidders not specified for competition analysis.
No data on task orders or modifications for performance tracking.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $153.4 million to CONTITECH USA, INC. T-158 TRACK 2530-01-435-5175 12387880-1 365806

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $153.4 million.

What is the period of performance?

Start: 2016-12-05. End: 2020-06-03.

What is the specific nature of the armored vehicle components being procured under this contract?

The provided data does not specify the exact nature of the armored vehicle components. The North American Industry Classification System (NAICS) code '336992' broadly covers 'Military Armored Vehicle, Tank, and Tank Component Manufacturing.' This suggests the contract is for parts integral to the production or maintenance of military vehicles such as tanks, personnel carriers, or other armored platforms. Without a more granular product description or Service Contract Act codes, it is impossible to determine if these are engine parts, armor plating, suspension systems, or other specialized components. This lack of specificity limits detailed analysis of the value and technical requirements.

How does the awarded price of $153 million compare to similar contracts for armored vehicle components?

A direct comparison of the $153 million award is challenging without knowing the specific components, quantities, and contract duration of comparable awards. The provided data indicates a 1276-day contract duration (approximately 3.5 years) awarded under firm fixed price. To benchmark effectively, one would need to identify other Defense Logistics Agency or Department of the Army contracts for similar armored vehicle parts, noting their total values, durations, and pricing structures (e.g., fixed-price vs. cost-plus). The average daily value of this contract is roughly $119,900. Without more granular data on the market for these specific components, assessing whether $153 million represents a competitive price is difficult.

What are the key performance indicators (KPIs) or quality assurance measures associated with this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) or specific quality assurance (QA) measures for this contract. However, as a definitive contract for military components, it is reasonable to assume that stringent quality standards and performance metrics are embedded within the contract's terms and conditions. The Defense Logistics Agency (DLA) typically mandates adherence to military specifications (Mil-Specs) and industry quality management systems (e.g., ISO 9001). Performance would likely be monitored through delivery schedules, defect rates, and compliance with technical data packages. The firm fixed-price nature incentivizes the contractor to meet these requirements efficiently to maximize profit.

What is the historical spending trend for armored vehicle components by the Defense Logistics Agency?

The provided data focuses solely on this single $153 million contract awarded in 2016. To understand historical spending trends for armored vehicle components by the Defense Logistics Agency (DLA), a broader analysis of DLA's procurement history over several fiscal years would be necessary. This would involve querying databases like the Federal Procurement Data System (FPDS) for contracts categorized under relevant NAICS codes (like 336992) and Product Service Codes (PSCs) related to military vehicles and their components. Such an analysis would reveal patterns in spending levels, major awardees, and the types of components most frequently procured, indicating whether this $153 million award represents a typical, increased, or decreased level of investment.

What is the track record of CONTITECH USA, INC as a government contractor, particularly for defense-related components?

The provided data identifies CONTITECH USA, INC as the contractor for this $153 million award. To assess their track record, one would need to examine their complete contract history within federal databases. This includes looking at the number of contracts awarded, their total value, the agencies they've served, and the types of goods or services provided. Specifically for defense-related components, it would be important to see if they have a history of successful delivery, adherence to quality standards, and competitive pricing on similar contracts. A review of past performance evaluations, any contract disputes, or terminations would also provide crucial insights into their reliability and capability as a government supplier.

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: SPRDL116R0055

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, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $153,418,819

Exercised Options: $153,418,819

Current Obligation: $153,418,819

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline