DoD awards $129M for M1128 metal parts to support Ukraine conflict, competed via exclusion of sources

Contract Overview

Contract Amount: $128,989,084 ($129.0M)

Contractor: General Dynamics Ordnance and Tactical Systems Inc

Awarding Agency: Department of Defense

Start Date: 2023-09-13

End Date: 2027-08-31

Contract Duration: 1,448 days

Daily Burn Rate: $89.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: UKRAINE: PRODUCE AND DELIVER M1128 METAL PARTS. THE GOVERNMENT COMPETED THE AWARD AND MADE A SINGLE AWARD TO AID AND SUPPORT THE CONFLICT IN UKRAINE.

Place of Performance

Location: SCRANTON, LACKAWANNA County, PENNSYLVANIA, 18505

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $129.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC for work described as: UKRAINE: PRODUCE AND DELIVER M1128 METAL PARTS. THE GOVERNMENT COMPETED THE AWARD AND MADE A SINGLE AWARD TO AID AND SUPPORT THE CONFLICT IN UKRAINE. Key points: 1. Value for money assessed against similar defense manufacturing contracts. 2. Competition dynamics indicate a specific need met through a specialized process. 3. Risk indicators include reliance on a single awardee for critical components. 4. Performance context is tied to urgent support for international conflict. 5. Sector positioning within defense manufacturing for armored vehicle components.

Value Assessment

Rating: fair

The contract value of $129 million for M1128 metal parts appears substantial, but a direct value-for-money assessment is challenging without detailed cost breakdowns and comparisons to similar specialized defense component procurements. The fixed-price with economic price adjustment structure introduces potential cost volatility. Benchmarking against industry standards for similar high-precision metal fabrication for military applications would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting that while a competitive process was intended, specific circumstances led to the exclusion of certain potential bidders. This approach, while not a sole-source award, limits the breadth of competition. The number of bidders is not specified, but the 'exclusion of sources' implies a narrower field than a standard full and open competition, potentially impacting price discovery.

Taxpayer Impact: Taxpayers may face higher costs due to a potentially reduced competitive landscape. The exclusion of sources could limit the government's ability to secure the most competitive pricing available in the broader market.

Public Impact

The primary beneficiaries are the Ukrainian armed forces, receiving critical components for M1128 vehicles. Services delivered include the production and delivery of essential metal parts for military hardware. Geographic impact is global, supporting a foreign military conflict, with production likely within the US. Workforce implications include employment in specialized manufacturing roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to economic price adjustment clause.
Dependence on a single contractor for critical Ukraine support components.
Limited competition may not yield the best possible pricing for taxpayers.

Positive Signals

Contract supports urgent national security interests and allied support.
Awarded to a known defense contractor with relevant manufacturing capabilities.
Clear delivery timeline specified, indicating a structured production plan.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on components for armored vehicles. The market for such specialized parts is often characterized by a limited number of highly capable suppliers due to stringent quality and security requirements. Comparable spending benchmarks would typically be found within other Department of Defense contracts for similar vehicle components or ammunition manufacturing, which can be substantial given the nature of military hardware.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (sb: false). There is no explicit information on subcontracting plans for small businesses. The focus on specialized, high-value defense components may limit opportunities for broad small business involvement unless they are direct suppliers of raw materials or specific sub-components to the prime contractor.

Oversight & Accountability

Oversight is likely managed by the Department of the Army, a component of the Department of Defense. Accountability measures would include contract performance monitoring, delivery schedules, and quality assurance protocols. Transparency is facilitated through contract databases like FPDS, though detailed cost justifications for the 'exclusion of sources' may not be publicly available. Inspector General jurisdiction would apply to potential fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Manufacturing
Foreign Military Sales Support
Armored Vehicle Component Production
Ukraine Security Assistance Initiatives

Risk Flags

Limited competition may impact price.
Economic price adjustment introduces cost uncertainty.
Urgent need for conflict support could strain production.
Reliance on single awardee for critical parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $129.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC. UKRAINE: PRODUCE AND DELIVER M1128 METAL PARTS. THE GOVERNMENT COMPETED THE AWARD AND MADE A SINGLE AWARD TO AID AND SUPPORT THE CONFLICT IN UKRAINE.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $129.0 million.

What is the period of performance?

Start: 2023-09-13. End: 2027-08-31.

What is the track record of GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC in fulfilling defense contracts, particularly those involving international support?

General Dynamics Ordnance and Tactical Systems Inc. (GD-OTS) is a well-established defense contractor with a significant history of producing and delivering a wide range of ordnance, munitions, and tactical systems for the U.S. military and allied nations. Their track record includes supplying components for various armored vehicles and weapon systems. While specific details on past performance for Ukraine-related support contracts may be limited in public domain, GD-OTS's extensive experience in defense manufacturing suggests a capacity to handle complex production requirements. Their involvement in numerous large-scale defense programs indicates a familiarity with stringent quality control, delivery timelines, and the complexities of supporting military operations, including those in active conflict zones. Evaluating their past performance on similar fixed-price with economic price adjustment contracts would provide further insight into their ability to manage cost fluctuations and deliver within budget.

How does the $129 million contract value compare to similar procurements for armored vehicle metal parts?

Comparing the $129 million contract value for M1128 metal parts requires context regarding the specific components, quantities, and complexity involved. Procurements for armored vehicle parts can vary significantly in price based on material, manufacturing processes (e.g., forging, machining, casting), and required certifications. For high-volume, standardized parts, this value might represent a substantial quantity. However, for highly specialized, low-volume, or technologically advanced components, it could represent fewer units. Benchmarking against other Department of Defense contracts for similar armored vehicle components, such as those for Abrams tanks or Bradley Fighting Vehicles, would be necessary. Without access to detailed specifications and quantities, a direct comparison is difficult, but the value suggests a significant production run or the sourcing of critical, high-cost materials.

What are the primary risks associated with this contract, given its purpose and award mechanism?

The primary risks associated with this contract stem from its purpose and award mechanism. Firstly, the urgent need to support the conflict in Ukraine introduces a risk of schedule pressure, potentially leading to expedited production that could impact quality control or increase costs. Secondly, the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award mechanism, while not sole-source, limits the competitive landscape. This reduced competition could lead to less favorable pricing for the government compared to a broader competition. Thirdly, the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) contract type carries inherent risk of cost escalation due to fluctuations in material prices, labor costs, or other economic factors, which could increase the final expenditure beyond the initial $129 million estimate. Finally, reliance on a single awardee for critical components introduces supply chain risk; any disruption in the contractor's operations could directly impact the flow of essential parts.

What is the expected program effectiveness and impact on the M1128 vehicle's operational readiness in Ukraine?

The effectiveness of this contract is directly tied to its ability to ensure the operational readiness and sustainment of M1128 vehicles utilized by Ukrainian forces. By providing essential metal parts, the contract aims to enable repairs, maintenance, and potentially the production of new components, thereby extending the service life and combat capability of these vehicles. The program's effectiveness will be measured by the timely delivery of high-quality parts that meet stringent military specifications. Successful execution should directly translate to improved battlefield performance and reduced downtime for the M1128 fleet. The ultimate impact is the enhancement of Ukraine's defense capabilities through the reliable supply of critical hardware components, contributing to their overall military objectives.

How does historical spending on similar defense components compare to this award?

Historical spending on similar defense components, particularly for armored vehicle parts and ordnance manufacturing, has consistently been in the billions of dollars annually for the Department of Defense. Contracts for specialized metal parts for military platforms can range from tens of millions to hundreds of millions of dollars, depending on the system's complexity, production volume, and the specific components required. For instance, major platform upgrades or sustainment contracts for vehicles like the Abrams or Bradley often involve significant funding. This $129 million award for M1128 parts aligns with the typical scale of such specialized defense procurements, especially when addressing urgent operational needs or supporting foreign military aid. Analyzing past awards for similar components or sustainment efforts for other armored vehicles would provide a clearer benchmark for assessing whether this specific award represents an increase, decrease, or typical level of spending.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 156 CEDAR AVE, SCRANTON, PA, 18505

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: $128,989,084

Exercised Options: $128,989,084

Current Obligation: $128,989,084

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $10,068,812

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN23D0025

IDV Type: IDC

Timeline