DoD awards $31.9M for T-142 Track Pads, exceeding initial estimate by $3.1M
Contract Overview
Contract Amount: $34,067,561 ($34.1M)
Contractor: Contitech USA, Inc
Awarding Agency: Department of Defense
Start Date: 2017-08-21
End Date: 2019-07-31
Contract Duration: 709 days
Daily Burn Rate: $48.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T-142 TRACK PAD 2530-00-150-5897 116545125 31,891
Place of Performance
Location: FAIRLAWN, SUMMIT County, OHIO, 44333
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $34.1 million to CONTITECH USA, INC for work described as: T-142 TRACK PAD 2530-00-150-5897 116545125 31,891 Key points: 1. Spending on T-142 track pads reached $31.9 million. 2. CONTITECH USA, INC secured the contract. 3. The contract was awarded under full and open competition. 4. The sector is Military Armored Vehicle, Tank, and Tank Component Manufacturing.
Value Assessment
Rating: fair
The awarded amount of $34,067,560.75 for T-142 track pads appears to be higher than the initial estimate of $31,891, suggesting potential overspending or a significant increase in scope/demand.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, which typically fosters competitive pricing. However, the significant difference between the estimated and awarded amounts warrants further investigation into the price discovery process.
Taxpayer Impact: Taxpayers may have overpaid due to the discrepancy between the estimated and awarded contract values.
Public Impact
Ensures continued availability of critical components for military vehicles. Supports the defense industrial base through contract awards. Potential for cost savings if future procurements are better estimated.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Significant cost overrun from estimate to award.
- Lack of clear justification for the large price difference.
Positive Signals
- Awarded under full and open competition.
- Contract supports essential military hardware.
Sector Analysis
This spending falls within the Defense sector, specifically Military Armored Vehicle, Tank, and Tank Component Manufacturing. Benchmarks for similar components are difficult to ascertain without more specific data, but large deviations from estimates are generally concerning.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The Defense Logistics Agency awarded this contract. Oversight should focus on the justification for the substantial difference between the estimated and awarded amounts to ensure fiscal responsibility.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Significant cost variance from estimate.
- Potential for overpayment.
- Lack of transparency in cost justification.
- Need for improved estimation accuracy.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, oh, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.1 million to CONTITECH USA, INC. T-142 TRACK PAD 2530-00-150-5897 116545125 31,891
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 $34.1 million.
What is the period of performance?
Start: 2017-08-21. End: 2019-07-31.
What factors contributed to the nearly 1000x increase from the estimated cost to the awarded cost for the T-142 track pads?
The significant discrepancy between the estimated cost ($31,891) and the awarded cost ($34,067,560.75) for the T-142 track pads suggests a potential error in the initial estimate or a substantial change in contract scope, quantity, or market conditions. Without further documentation, it is impossible to definitively determine the cause, but it warrants a thorough review of the procurement process and the accuracy of initial cost estimations.
Does the awarded price represent fair market value given the full and open competition?
While the contract was awarded under full and open competition, the vast difference between the estimated and awarded price raises questions about whether the final price represents fair market value. It is possible that unforeseen market fluctuations, increased material costs, or a revised understanding of the required specifications led to the higher price. However, a review of the bids received and the justification for selecting the winning bid is necessary to confirm fair market value.
What is the long-term risk associated with procuring critical components like track pads at significantly inflated prices?
Procuring critical components at significantly inflated prices poses several long-term risks. It can lead to budget overruns, diverting funds from other essential defense needs. It also sets a precedent for future procurements, potentially normalizing higher costs. Furthermore, it can erode public trust and lead to scrutiny of defense spending, impacting the overall efficiency and perceived value of military expenditures.
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: SPRDL117R0131
Offers Received: 2
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: $34,067,561
Exercised Options: $34,067,561
Current Obligation: $34,067,561
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-08-21
Current End Date: 2019-07-31
Potential End Date: 2019-07-31 12:07:00
Last Modified: 2018-11-06
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