Army Awards $417M for Short Range Air Defense System Production to General Dynamics
Contract Overview
Contract Amount: $416,758,426 ($416.8M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2022-02-04
End Date: 2025-06-30
Contract Duration: 1,242 days
Daily Burn Rate: $335.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MANEUVER-SHORT RANGE AIR DEFENSE SYSTEM PRODUCTION.
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $416.8 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: MANEUVER-SHORT RANGE AIR DEFENSE SYSTEM PRODUCTION. Key points: 1. Significant contract value of $417 million for critical defense systems. 2. Sole-source award to General Dynamics raises questions about competition and price discovery. 3. Potential risk associated with single-source procurement and long-term delivery schedule. 4. Spending falls within the Defense sector, specifically armored vehicle manufacturing.
Value Assessment
Rating: fair
The contract value of $417 million for a specialized defense system appears substantial. Benchmarking against similar complex military hardware production is difficult without more data, but the lack of competition suggests potential for overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating no other vendors were considered. This significantly limits price discovery and competitive pressure, potentially leading to higher costs for taxpayers.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Enhances U.S. Army's short-range air defense capabilities. Supports domestic manufacturing and jobs in the defense industrial base. Ensures availability of critical military equipment for national security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Long contract duration (over 2 years)
- Lack of transparency in pricing
Positive Signals
- Addresses critical defense need
- Supports established defense contractor
- Firm fixed price contract type
Sector Analysis
This contract falls under the Defense sector, specifically within the Military Armored Vehicle, Tank, and Tank Component Manufacturing industry. Spending in this niche area is often characterized by high unit costs and long procurement cycles, with significant government oversight required.
Small Business Impact
The awardee is General Dynamics Land Systems Inc., a large defense contractor. There is no indication in the provided data that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
Given the sole-source nature of this award, robust oversight is crucial to ensure fair pricing and adherence to contract terms. The Department of the Army's contracting activity will need to monitor performance and costs closely throughout the contract period.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Potential for higher costs due to lack of competition.
- Long contract duration may expose to market volatility.
- Lack of transparency on specific system capabilities.
- No indication of small business participation.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $416.8 million to GENERAL DYNAMICS LAND SYSTEMS INC.. MANEUVER-SHORT RANGE AIR DEFENSE SYSTEM PRODUCTION.
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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $416.8 million.
What is the period of performance?
Start: 2022-02-04. End: 2025-06-30.
What is the justification for the sole-source award, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs. Without further details, it's difficult to assess. However, the Army should conduct a thorough price analysis, potentially using historical data or independent cost estimates, to validate the reasonableness of the $417 million award and ensure taxpayer funds are used efficiently.
What are the specific risks associated with the long delivery timeline and the sole-source nature of this contract?
The primary risks include potential cost overruns if market conditions change unfavorably during the contract period, and the lack of competitive pressure to drive innovation or cost efficiencies. A sole-source award also limits the government's leverage if performance issues arise, as there are fewer alternatives for fulfilling the requirement.
How does this contract contribute to the overall effectiveness and readiness of the U.S. Army's air defense capabilities?
This contract directly addresses the production of a Short Range Air Defense System, which is vital for protecting ground forces from aerial threats. By ensuring the supply of these systems, the Army enhances its operational effectiveness and readiness, allowing units to operate more safely and conduct missions with greater confidence against evolving air threats.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
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: $416,758,426
Exercised Options: $416,758,426
Current Obligation: $416,758,426
Subaward Activity
Number of Subawards: 16
Total Subaward Amount: $3,288,885
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q20D0039
IDV Type: IDC
Timeline
Start Date: 2022-02-04
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 12:06:00
Last Modified: 2025-03-26
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