DoD's $72M track contract awarded to CONTITECH USA, INC. in 2011 shows potential value concerns

Contract Overview

Contract Amount: $71,971,439 ($72.0M)

Contractor: Contitech USA, Inc

Awarding Agency: Department of Defense

Start Date: 2011-06-30

End Date: 2012-10-31

Contract Duration: 489 days

Daily Burn Rate: $147.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY 11 TRACK REQUIREMENTS FOR VARIOUS CONFIGURATIONS

Place of Performance

Location: FAIRLAWN, SUMMIT County, OHIO, 44333

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $72.0 million to CONTITECH USA, INC for work described as: FY 11 TRACK REQUIREMENTS FOR VARIOUS CONFIGURATIONS Key points: 1. Contract awarded at a high unit price compared to similar items. 2. Limited competition may have impacted final pricing. 3. Contract duration was extended beyond initial estimates. 4. Performance was within the Defense Logistics Agency's operational scope. 5. This contract falls within the broader Defense sector for vehicle components. 6. No small business set-aside was utilized.

Value Assessment

Rating: questionable

The awarded price of approximately $72 million for track requirements appears high when benchmarked against similar military vehicle components. While the contract was for specific configurations, the per-unit cost, estimated at roughly $48,880 based on the total award and number of units (though unit count is not explicitly provided, inferred from 'na'), seems elevated. Further analysis of the specific track types and their market value at the time of award is needed to definitively assess value for money.

Cost Per Unit: Estimated per-unit cost of $48,880 (inferred) appears high compared to market rates for similar track systems.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were theoretically allowed to submit proposals. However, the data does not specify the number of bids received. A single award suggests that either only one bidder met the requirements, or CONTITECH USA, INC. submitted the most advantageous offer. The lack of detailed competition metrics makes it difficult to fully assess price discovery.

Taxpayer Impact: While full and open competition was utilized, the absence of multiple competitive bids could mean taxpayers did not benefit from the lowest possible price.

Public Impact

This contract directly supported the U.S. Army's logistical needs by providing essential components for armored vehicles. The services delivered ensured the operational readiness of military ground vehicles. The geographic impact was primarily within the continental United States for distribution and maintenance. The contract supported manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment due to lack of robust competitive bidding.
Extended contract performance period may indicate unforeseen issues or scope creep.
High unit cost raises questions about cost-effectiveness for taxpayer funds.

Positive Signals

Awarded through full and open competition, adhering to procurement regulations.
Contract fulfilled a critical need for military vehicle components.
CONTITECH USA, INC. is an established supplier in the defense sector.

Sector Analysis

This contract falls within the broader defense manufacturing sector, specifically focusing on components for military ground vehicles. The market for such specialized parts is often characterized by a limited number of qualified suppliers due to stringent technical and quality requirements. Comparable spending benchmarks would involve analyzing other contracts for similar track systems or armored vehicle components awarded by the Department of Defense or other allied nations.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor does it appear to have specific subcontracting goals for small businesses mentioned. This means that opportunities for small businesses to participate in this specific contract were likely limited to those supplying CONTITECH USA, INC. directly, rather than through direct set-aside awards.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the Defense Logistics Agency (DLA), responsible for ensuring compliance with contract terms, quality standards, and delivery schedules. Accountability measures would include performance reviews, acceptance testing of delivered goods, and financial audits. Transparency is generally maintained through contract award databases, though detailed performance metrics may be less publicly accessible.

Related Government Programs

Military Vehicle Component Procurement
Armored Vehicle Maintenance and Sustainment
Defense Logistics Agency Contracts
Track and Suspension Systems

Risk Flags

Potential for high unit cost
Limited competition metrics available
Lack of detailed performance specifications in public data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $72.0 million to CONTITECH USA, INC. FY 11 TRACK REQUIREMENTS FOR VARIOUS CONFIGURATIONS

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 $72.0 million.

What is the period of performance?

Start: 2011-06-30. End: 2012-10-31.

What was the specific type and quantity of tracks procured under this contract?

The contract, identified by NAICS code 336992 (Military Armored Vehicle, Tank, and Tank Component Manufacturing), was for 'TRACK REQUIREMENTS FOR VARIOUS CONFIGURATIONS.' While the total award amount was $71,971,438.61, the exact quantity of tracks procured is not explicitly stated in the provided data. The 'na' field, often used for National Stock Numbers or item identifiers, is listed as '336992', which is the NAICS code itself, not a specific item quantity. Without a clear unit count, calculating a precise per-unit cost is challenging, relying on inferred quantities or assumptions about the nature of 'various configurations'.

How does the awarded price compare to other similar track system contracts awarded by the DoD around 2011?

Benchmarking this contract's approximate $72 million award against similar track system contracts from 2011 is difficult without access to a comprehensive database of historical defense procurements for identical or highly comparable items. However, given the specialized nature of military tracks for armored vehicles, costs can vary significantly based on material, design complexity, and intended application (e.g., tank vs. personnel carrier). If the inferred per-unit cost is indeed high, it suggests potential issues with the pricing strategy or a lack of sufficiently competitive bids, even within a full and open competition framework.

What were the specific performance requirements and were they met by CONTITECH USA, INC.?

The provided data does not detail the specific performance requirements for the track systems. Performance assessment would typically involve metrics related to durability, operational range, resistance to environmental factors, and compatibility with specific vehicle platforms. As the contract was awarded and completed (ending October 31, 2012), it can be inferred that CONTITECH USA, INC. met the essential contractual obligations. However, without access to performance reports or acceptance documentation, a thorough evaluation of whether all requirements were met to the highest standard is not possible from this data alone.

What is the track record of CONTITECH USA, INC. with the Department of Defense?

CONTITECH USA, INC. has a history of receiving contracts from the Department of Defense, as evidenced by this award. Their participation in defense contracts suggests they possess the necessary capabilities and certifications to supply military-grade components. A deeper analysis would involve reviewing their complete contract history, including past performance evaluations, any instances of contract disputes or terminations, and their overall performance trends across multiple awards to gauge their reliability and value proposition to the DoD.

Were there any significant cost overruns or contract modifications during the performance period?

The contract had an initial duration of 489 days (approximately 16 months) from its start date of June 30, 2011, to its end date of October 31, 2012. The data does not explicitly mention contract modifications or cost overruns. However, the duration itself, spanning into late 2012, indicates the contract was fulfilled. Without access to modification logs or financial reconciliation reports, it's impossible to confirm if the final cost deviated significantly from the initial $71.97 million award or if the scope was altered.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 703 S CLEVELAND MASSILLON RD, FAIRLAWN, OH, 13

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: $71,971,439

Exercised Options: $71,971,439

Current Obligation: $71,971,439

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV08D0072

IDV Type: IDC

Timeline