DoD awards $25.5M for M1 Abrams tank components, with General Dynamics Land Systems Inc. as the primary contractor

Contract Overview

Contract Amount: $25,502,337 ($25.5M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2018-10-25

End Date: 2023-06-15

Contract Duration: 1,694 days

Daily Burn Rate: $15.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALL ITEMS IN SUPPORT OF THE M1 ABRAMS TANK: SWITCHBOARD, FIRE CONTROL; NSN 1290-01-126-4268; QTY: 136 DISPLAY UNIT, HEADS UP; NSN 5855-01-671-1758; QTY: 100 ELECTRONIC UNIT, FIRE CONTROL; NSN 1220-01-647-9395; QTY: 200 CONTROL, REMOTE SWITCH; NSN 6110-01-451-2013; QTY: 70 ABV ELECTRONIC COMPONENT; NSN 5998-01-465-7017; QTY: 65 DISPLAY UNIT; NSN 7025-01-619-9491; QTY: 60 SWITCHBOARD, FIRE CONTROL; NSN 1290-01-577-5948; QTY: 75

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: ALL ITEMS IN SUPPORT OF THE M1 ABRAMS TANK: SWITCHBOARD, FIRE CONTROL; NSN 1290-01-126-4268; QTY: 136 DISPLAY UNIT, HEADS UP; NSN 5855-01-671-1758; QTY: 100 ELECTRONIC UNIT, FIRE CONTROL; NSN 1220-01-647-9395; QTY: 200 CONTROL, REMOTE SWITCH; NSN 6110-01-451-2013; QTY: 70 ABV EL… Key points: 1. Contract focuses on critical electronic and control components for the M1 Abrams tank fleet. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Delivery order spans nearly five years, indicating a long-term need for these parts. 4. The contract value is spread across multiple National Stock Numbers (NSNs) for various components. 5. Primary contractor, General Dynamics Land Systems Inc., is a major player in armored vehicle manufacturing. 6. The contract type is Firm Fixed Price, which transfers cost risk to the contractor. 7. This award supports the sustainment and modernization of a key military asset.

Value Assessment

Rating: good

The total award of $25.5 million for a variety of M1 Abrams tank components appears reasonable given the scope and duration. While specific per-unit costs are not detailed, the firm fixed-price nature of the contract suggests that pricing was negotiated upfront. Benchmarking against similar component procurements for armored vehicles would provide a more precise value assessment, but the overall sum aligns with the complexity and strategic importance of maintaining a modern tank fleet.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive pricing. The agency sought proposals from a wide range of potential suppliers, aiming to secure the best value for the government.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it typically leads to lower prices and higher quality goods and services by leveraging market competition.

Public Impact

The primary beneficiaries are the U.S. Army and Marine Corps, who operate the M1 Abrams tanks. Services delivered include the supply of essential electronic and control components for tank systems. The geographic impact is national, supporting military readiness across various deployments. Workforce implications include jobs in manufacturing, logistics, and defense contracting, particularly for the prime contractor and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for sole-source reliance on specific component manufacturers if not managed carefully.
Long-term sustainment contracts can sometimes lead to price creep if not rigorously overseen.
Dependence on a single prime contractor for a broad range of components could pose supply chain risks.

Positive Signals

Awarded under full and open competition, promoting a competitive market.
Firm Fixed Price contract type shifts cost risk to the contractor.
Long contract duration (nearly 5 years) provides supply chain stability for critical parts.
Supports a vital defense platform, ensuring operational readiness.

Sector Analysis

The defense industrial base, specifically within the armored vehicle manufacturing and component supply sector, is characterized by a few large prime contractors and a complex network of specialized suppliers. This contract fits within the broader ecosystem of military vehicle sustainment, which is a significant area of federal spending. Comparable spending benchmarks would involve looking at other large-scale component procurements for major weapon systems, where values can range from millions to billions depending on the system's complexity and quantity.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, it's common for large prime contractors like General Dynamics Land Systems Inc. to utilize small businesses for subcontracting opportunities. The extent of small business participation will depend on the prime contractor's subcontracting plan and the availability of qualified small business suppliers for the specific components required.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Logistics Agency (DLA). Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

M1 Abrams Tank System Sustainment
Defense Logistics Agency Procurement
Armored Vehicle Component Manufacturing
Department of Defense Supply Chain Management
Military Vehicle Modernization Programs

Risk Flags

Supply Chain Vulnerability
Component Obsolescence Risk
Long-Term Contractor Performance
Potential for Price Escalation (if not managed)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to GENERAL DYNAMICS LAND SYSTEMS INC.. ALL ITEMS IN SUPPORT OF THE M1 ABRAMS TANK: SWITCHBOARD, FIRE CONTROL; NSN 1290-01-126-4268; QTY: 136 DISPLAY UNIT, HEADS UP; NSN 5855-01-671-1758; QTY: 100 ELECTRONIC UNIT, FIRE CONTROL; NSN 1220-01-647-9395; QTY: 200 CONTROL, REMOTE SWITCH; NSN 6110-01-451-2013; QTY: 70 ABV ELECTRONIC COMPONENT; NSN 5998-01-465-7017; QTY: 65 DISPLAY UNIT; NSN 7025-01-619-9491; QTY: 60 SWITCHBOARD, FIRE CONTROL; NSN 1290-01-577-5948; QTY: 75

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS LAND SYSTEMS INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $25.5 million.

What is the period of performance?

Start: 2018-10-25. End: 2023-06-15.

What is the track record of General Dynamics Land Systems Inc. in fulfilling similar defense contracts?

General Dynamics Land Systems Inc. (GDLS) has a long and extensive track record as a prime contractor for the M1 Abrams Main Battle Tank and other armored vehicles. They are responsible for the original production, modernization, and sustainment of these platforms for the U.S. Army and allied nations. GDLS has consistently been awarded large-scale contracts for Abrams production, upgrades, and spare parts. Their performance history generally indicates a strong capability in managing complex defense manufacturing and supply chains, though like any large contractor, they have faced scrutiny and performance reviews on specific programs over the years. Their deep integration with the Abrams program suggests a high level of expertise and established processes for delivering required components and systems.

How does the awarded amount compare to historical spending on M1 Abrams components?

The $25.5 million awarded for these specific components represents a portion of the overall sustainment budget for the M1 Abrams fleet. Historical spending on M1 Abrams sustainment, including parts, maintenance, and upgrades, amounts to billions of dollars annually. This particular award covers a defined set of components over a nearly five-year period. To provide a precise comparison, one would need to aggregate spending on these specific NSNs or similar electronic/fire control components over previous contract periods. However, given the scale of the Abrams program and the ongoing need for parts to maintain operational readiness, this award amount is consistent with the typical procurement values for such critical systems.

What are the primary risks associated with the supply of these specific M1 Abrams components?

Key risks include supply chain disruptions, potential obsolescence of certain electronic components over time, and the concentration of manufacturing capabilities among a limited number of suppliers. For specialized military hardware like the M1 Abrams, ensuring a consistent and reliable supply of unique components can be challenging. Geopolitical events, natural disasters, or the financial stability of component manufacturers could impact delivery. Furthermore, the long service life of the M1 Abrams means that components may need to be sourced or manufactured using legacy technologies, which can increase costs and lead times. The firm fixed-price nature of this contract mitigates cost overrun risks for the government but places the burden of managing these supply-side risks squarely on the contractor.

How effective is the firm fixed-price contract type in ensuring value for money for these components?

The Firm Fixed Price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work and specifications are well-defined, as is typical for procuring specific hardware components. FFP transfers the risk of cost overruns to the contractor, incentivizing them to manage their costs efficiently and accurately estimate expenses. This means the government pays the agreed-upon price regardless of the contractor's actual costs. For standardized or well-understood components like those listed, FFP provides cost certainty for the government. However, it requires robust pre-award negotiation and technical evaluation to ensure the initial price reflects fair market value and that the contractor has adequately accounted for all potential costs and risks.

What is the strategic importance of these components to the M1 Abrams platform?

The components listed—including switchboards, fire control units, heads-up displays, and electronic components—are critical to the operational effectiveness of the M1 Abrams tank. The fire control system, in particular, is essential for target acquisition, tracking, and engagement, directly impacting the tank's lethality and accuracy. Electronic units and switchboards manage the complex internal systems, ensuring communication, power distribution, and system integration. Heads-up displays provide vital information to the crew in an easily accessible format. The reliability and performance of these components are paramount for maintaining the M1 Abrams' status as a premier main battle tank, directly influencing combat survivability and mission success.

Industry Classification

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

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 48310

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: $25,502,337

Exercised Options: $25,502,337

Current Obligation: $25,502,337

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $11,147,239

Contract Characteristics

Multi-Year Contract: Yes

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE7MX16D0100

IDV Type: IDC

Timeline