Army Awards $275M for Short Range Air Defense System to General Dynamics
Contract Overview
Contract Amount: $275,188,341 ($275.2M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2024-05-31
End Date: 2027-09-30
Contract Duration: 1,217 days
Daily Burn Rate: $226.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MANEUVER - SHORT RANGE AIR DEFENSE SYSTEM
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $275.2 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: MANEUVER - SHORT RANGE AIR DEFENSE SYSTEM Key points: 1. Significant investment in critical defense capabilities. 2. Sole-source award raises questions about price discovery and competition. 3. Long-term contract (2024-2027) indicates sustained need. 4. Focus on armored vehicle manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $275M is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential market alternatives. Benchmarking against similar systems would be necessary.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition in this large contract may result in taxpayers paying a premium for the defense system.
Public Impact
Enhances national security by providing advanced air defense capabilities. Supports a major defense contractor and its supply chain. Potential for technological advancements in military hardware.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
Positive Signals
- Critical defense capability
- Long-term contract ensures supply
Sector Analysis
This contract falls within the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. Spending in this area is driven by national security needs and technological advancements in defense systems.
Small Business Impact
No information is provided regarding small business participation in this contract. Sole-source awards often have limited opportunities for small businesses unless specifically subcontracted.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and performance. The Department of the Army's contracting officers must diligently monitor this award to protect taxpayer interests.
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 overpayment due to lack of price discovery.
- Long contract duration may not adapt to evolving threats.
- Lack of transparency on specific system capabilities.
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 $275.2 million to GENERAL DYNAMICS LAND SYSTEMS INC.. MANEUVER - SHORT RANGE AIR DEFENSE SYSTEM
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 $275.2 million.
What is the period of performance?
Start: 2024-05-31. End: 2027-09-30.
What is the justification for the sole-source award of the Short Range Air Defense System contract?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without further details, it's presumed the Army determined General Dynamics Land Systems Inc. was the only source capable of meeting specific technical or operational requirements for this advanced air defense system.
How can the Department of Defense ensure fair pricing without competitive bidding on this $275M contract?
The Department of Defense can employ several strategies to ensure fair pricing on sole-source contracts. This includes conducting thorough cost analyses, benchmarking against similar systems or historical data, negotiating profit margins, and potentially requiring detailed cost breakdowns from the contractor. Independent cost estimating and expert review are also vital.
What are the potential risks associated with a sole-source award for a critical defense system like the Short Range Air Defense System?
The primary risks of a sole-source award include inflated costs due to lack of competition, potential for contractor complacency, and limited opportunities for innovation from other market players. There's also a risk that the chosen system may not be the most cost-effective or technologically advanced solution available if alternatives were not adequately explored.
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: $275,188,341
Exercised Options: $275,188,341
Current Obligation: $275,188,341
Subaward Activity
Number of Subawards: 73
Total Subaward Amount: $61,149,738
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: 2024-05-31
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 12:09:00
Last Modified: 2025-09-29
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