DoD's $834M Combat Vehicle Contract Awarded to United Defense L.P. in 2003

Contract Overview

Contract Amount: $76,933,280 ($76.9M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2003-12-19

End Date: 2009-12-31

Contract Duration: 2,204 days

Daily Burn Rate: $34.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200407!002136!2100!W56HZV!TACOM - WARREN !W56HZV04C0105 !A!N! !N! ! !20031219!20051231!834476079!098060218!175406842!N!UNITED DEFENSE, L P !1100 BAIRS ROAD !YORK !PA!17405!87048!133!42!YORK !YORK !PENN !+000015480000!Y!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !000 !* !336992!E! !3! ! ! ! ! !99990909!B! ! !N!Z!B!N!J!1!001!N!4A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!00 !A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: YORK, YORK County, PENNSYLVANIA, 17408

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $76.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200407!002136!2100!W56HZV!TACOM - WARREN !W56HZV04C0105 !A!N! !N! ! !20031219!20051231!834476079!098060218!175406842!N!UNITED DEFENSE, L P !1100 BAIRS ROAD !YORK !PA!17405!87048!133!42!YORK !YORK… Key points: 1. Contract awarded for tracked combat vehicles, indicating a focus on armored troop transport and engagement capabilities. 2. The significant value suggests a large-scale procurement, likely for modernization or expansion of military vehicle fleets. 3. Awarded to a single entity, raising questions about the extent of competition and potential for cost efficiencies. 4. The contract duration of over two years points to a sustained need for these specialized military assets. 5. The procurement falls under the 'Combat Vehicles' sector, highlighting its strategic importance in defense operations. 6. The contract's value, while substantial, needs to be benchmarked against similar large-scale vehicle procurements for a full value assessment.

Value Assessment

Rating: fair

The total contract value of $834,476,079 represents a significant investment in military hardware. Without specific per-unit cost data or comparisons to similar vehicle procurements from the same era, it is difficult to definitively assess value for money. The 'NOT AVAILABLE FOR COMPETITION' status further complicates a direct price comparison, as competitive bidding often drives down costs. However, the sheer scale of the award suggests a critical need that the Department of Defense was willing to meet with this investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' designation, indicating that a competitive bidding process was not utilized. This could be due to various reasons, such as a sole-source justification, a specific national security requirement, or a follow-on contract where only one vendor could fulfill the need. The lack of competition means that price discovery through market forces was limited, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: The absence of competition means taxpayers did not benefit from the cost savings typically achieved through a bidding process. This could result in a higher overall expenditure for the government on these combat vehicles.

Public Impact

The primary beneficiaries are the U.S. Army, receiving advanced combat vehicles essential for ground operations. The contract delivers tracked combat vehicles, likely including tanks and armored personnel carriers, enhancing military operational capabilities. The geographic impact is national, supporting defense readiness across various military installations and deployment zones. Workforce implications include job creation and sustainment within the defense manufacturing sector, particularly at the contractor's facilities in Pennsylvania.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to inflated pricing.
Potential for cost overruns in a sole-source environment.
Limited transparency in the procurement process due to non-competitive award.
Dependence on a single contractor for critical defense assets.
The contract's significant value warrants close monitoring for efficiency and effectiveness.

Positive Signals

Addresses a critical defense need for advanced combat vehicles.
Award to a known defense contractor suggests established capabilities.
The contract duration implies a stable, long-term requirement.
The fixed-price nature of the contract can provide cost predictability.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the manufacturing of heavy armored vehicles. The market for such specialized equipment is typically dominated by a few large defense contractors due to high R&D costs, complex manufacturing requirements, and long product development cycles. Spending in this sector is driven by geopolitical factors, military modernization programs, and national security strategies. Comparable spending benchmarks would involve analyzing other large-scale vehicle procurement contracts awarded by the Department of Defense or allied nations.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was awarded to a large prime contractor and there is no explicit mention of small business set-asides. Subcontracting opportunities for small businesses may exist within the supply chain for components and services, but the overall impact on the small business ecosystem is likely limited unless specific subcontracting goals were mandated and met. Further analysis would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and acquisition oversight mechanisms. This includes program management reviews, contract performance monitoring, and potentially audits by the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA). Inspector General investigations could be initiated if fraud, waste, or abuse were suspected. Transparency is often limited in non-competitively awarded contracts, but reporting requirements for contract performance and financial expenditures would still apply.

Related Government Programs

Combat Vehicles
Armored Vehicles
Military Procurement
Defense Manufacturing
Tactical Vehicles

Risk Flags

Non-competitive award
High contract value
Defense sector procurement
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200407!002136!2100!W56HZV!TACOM - WARREN !W56HZV04C0105 !A!N! !N! ! !20031219!20051231!834476079!098060218!175406842!N!UNITED DEFENSE, L P !1100 BAIRS ROAD !YORK !PA!17405!87048!133!42!YORK !YORK !PENN !+000015480000!Y!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !000 !* !336992!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $76.9 million.

What is the period of performance?

Start: 2003-12-19. End: 2009-12-31.

What was the specific type of tracked combat vehicle procured under this contract?

The contract data specifies the product service code (PSC) as '2350', which corresponds to 'Combat Vehicles, Tracked'. While the exact model or variant is not detailed in the provided snippet, this category generally includes main battle tanks, infantry fighting vehicles, and armored personnel carriers that utilize tracked propulsion systems. These vehicles are critical for ground warfare, providing armored protection and mobility for troops and weaponry in diverse combat environments.

What is the track record of United Defense, L.P. with similar large-scale military vehicle contracts?

United Defense, L.P. (which was later acquired by BAE Systems) had a significant track record in developing and manufacturing heavy armored vehicles for the U.S. military prior to and during this contract period. They were a key player in programs like the Bradley Fighting Vehicle and the Crusader self-propelled howitzer. Their experience in complex armored vehicle production, including design, engineering, testing, and manufacturing, made them a capable, albeit sole-source, provider for this substantial contract. Their history suggests a deep understanding of the technical requirements and production challenges associated with such advanced military hardware.

How does the $834 million contract value compare to other major defense procurements of combat vehicles around 2003?

In the context of major defense procurements around 2003, an $834 million contract for combat vehicles was substantial, reflecting the high cost of developing and producing advanced armored platforms. For instance, programs like the Future Combat Systems (FCS) were initiated around this time with multi-billion dollar projections, though they faced significant challenges. Other large contracts might involve upgrades to existing fleets or procurement of specialized variants. Without a direct comparison of the number of units or specific capabilities, it's challenging to make a precise value-for-money assessment. However, the figure aligns with the significant investments required for modernizing armored forces, especially during periods of active military engagement or perceived threats.

What are the primary risks associated with awarding a contract of this magnitude on a non-competitive basis?

The primary risks associated with awarding a contract of this magnitude on a non-competitive basis include potential for inflated pricing, reduced incentive for contractor efficiency, and a lack of market validation for the proposed costs. Without competition, the government loses the benefit of price discovery and the pressure that multiple bidders exert to offer the best value. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future flexibility and negotiation power. Furthermore, the absence of a competitive process can sometimes mask inefficiencies or lead to less rigorous scrutiny of the contractor's performance and cost management.

What were the historical spending patterns for tracked combat vehicles by the Department of the Army leading up to and following this contract?

Historical spending patterns for tracked combat vehicles by the Department of the Army leading up to and following this contract (2003-2009) would likely show significant investment, particularly influenced by ongoing conflicts in Iraq and Afghanistan. The early 2000s saw a push for modernization and replacement of aging vehicle fleets. Spending would have been directed towards platforms like Abrams tanks, Bradley Fighting Vehicles, and potentially new development programs. Post-2009, spending might have shifted towards upgrades, sustainment, and potentially different vehicle architectures as military strategies evolved. Analyzing annual defense budgets and specific procurement line items for tracked vehicles would provide a clearer picture of these trends and how this $834 million contract fit within the broader spending landscape.

What specific performance metrics or milestones were likely included in this contract to ensure successful delivery?

While the specific performance metrics are not detailed in the provided data, large defense contracts for complex systems like combat vehicles typically include stringent requirements. These would likely encompass technical performance specifications (e.g., armor protection levels, mobility characteristics, firepower effectiveness), reliability and maintainability targets, delivery schedules with phased milestones, quality assurance standards, and potentially testing and acceptance criteria. Failure to meet these metrics could result in penalties, withholding of payments, or contract termination. The contract would also likely stipulate reporting requirements on production progress, cost, and any identified issues.

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 AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1100 BAIRS ROAD, YORK, PA, 10

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $76,888,547

Exercised Options: $76,888,547

Current Obligation: $76,933,280

Timeline