Department of Defense awards $265M contract for combat vehicle engineering services to General Dynamics Land Systems

Contract Overview

Contract Amount: $264,952,193 ($265.0M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2003-12-05

End Date: 2010-01-31

Contract Duration: 2,249 days

Daily Burn Rate: $117.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200403!001751!2100!W56HZV!TACOM - WARREN !W56HZV04C0136 !A!N! !N! ! !20031205!20061031!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND ROAD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000008427671!Y!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A4A!COMBAT VEHICLES !000 !* !336992!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!N!S!1!001!N!1G!Z!Y!D! ! !N!C!N! ! ! !B!A!A!A!00 !A!D!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $265.0 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: 200403!001751!2100!W56HZV!TACOM - WARREN !W56HZV04C0136 !A!N! !N! ! !20031205!20061031!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND ROAD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACO… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. Significant duration of the contract (over 6 years) suggests a long-term need for these specialized engineering services. 3. The awardee, General Dynamics Land Systems, is a major defense contractor with extensive experience in armored vehicle manufacturing. 4. The contract value is substantial, indicating a critical role in supporting the Army's combat vehicle programs. 5. Lack of competition may limit opportunities for innovation and cost savings that could arise from a more open bidding process. 6. The contract's focus on systems engineering services highlights the complexity and technical demands of modern military hardware.

Value Assessment

Rating: questionable

The contract value of $264,952,192.78 for systems engineering services is substantial. Without comparable sole-source contracts for similar services, it is difficult to definitively benchmark the value. However, the absence of competition inherently limits the ability to assess if the pricing reflects market rates or if it could have been lower under a competitive bidding scenario. The long contract duration (over 6 years) also means that potential cost efficiencies over time are harder to evaluate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or authorized by statute. The lack of multiple bidders means there was no direct price competition, which can sometimes lead to higher costs for the government compared to fully competed contracts. The specific justification for the sole-source award is not detailed here but is crucial for understanding the procurement strategy.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions and efficiencies that typically arise from a competitive bidding process. This can result in a higher overall cost to the government for the services rendered.

Public Impact

The primary beneficiaries are the U.S. Army's combat vehicle programs, ensuring continued engineering support for critical platforms. Services delivered include systems engineering, crucial for the design, development, integration, and sustainment of complex military vehicles. The geographic impact is primarily within the United States, supporting defense industrial capabilities and potentially jobs in Michigan where the contractor is located. Workforce implications include the employment of highly skilled engineers and technical personnel by General Dynamics Land Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Long contract duration may obscure opportunities for cost optimization over the period of performance.
Lack of competition could stifle innovation if alternative solutions are not explored.
High contract value necessitates robust oversight to ensure effective use of funds.

Positive Signals

Award to an experienced contractor with a proven track record in defense systems.
Focus on systems engineering indicates a commitment to the technical integrity of combat vehicles.
Contract supports critical national defense capabilities.

Sector Analysis

This contract falls within the Defense Industrial sector, specifically supporting the manufacturing and sustainment of military vehicles. The market for defense systems engineering is dominated by a few large, specialized contractors. General Dynamics Land Systems is a key player in this space, particularly for armored vehicles. Comparable spending benchmarks would involve looking at other large, sole-source or competitively awarded engineering services contracts for major defense platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to a large prime contractor, General Dynamics Land Systems. There is no information provided regarding subcontracting plans for small businesses. The sole-source nature of the award limits opportunities for small businesses to participate directly as prime contractors on this specific procurement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures would be embedded in the contract's performance work statement and delivery schedules. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Combat Vehicle Modernization Programs
Army Systems Engineering Support Contracts
Armored Vehicle Manufacturing and Sustainment
Defense Contractor Support Services

Risk Flags

Sole-source award
Lack of competition
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $265.0 million to GENERAL DYNAMICS LAND SYSTEMS INC.. 200403!001751!2100!W56HZV!TACOM - WARREN !W56HZV04C0136 !A!N! !N! ! !20031205!20061031!131266926!131266926!001381284!N!GENERAL DYNAMICS LAND SYSTEMS !38500 MOUND ROAD !STERLING HEIGH !MI!48310!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000008427671!Y!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A4A!COMBAT VEHICLES !000 !* !336992!E! !3! ! ! ! ! !999

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 $265.0 million.

What is the period of performance?

Start: 2003-12-05. End: 2010-01-31.

What is the specific justification for awarding this contract on a sole-source basis to General Dynamics Land Systems?

The provided data indicates the contract was 'NOT COMPETED'. While the specific justification is not detailed in the abbreviated data, common reasons for sole-source awards in defense contracting include: a critical need for the unique capabilities of a single contractor, the proprietary nature of existing technology, or a lack of adequate competition within the required timeframe. For General Dynamics Land Systems, their established role in producing specific combat vehicle platforms likely played a significant role. A full justification would typically be documented by the procuring agency (Department of the Army) and may be subject to public review depending on the circumstances and value of the contract.

How does the $265 million contract value compare to historical spending on similar systems engineering services for combat vehicles?

Comparing this $265 million contract value requires access to historical spending data for similar systems engineering services specifically for combat vehicles. General Dynamics Land Systems is a major provider of such services, and their contracts can range significantly based on the scope and duration. Without specific benchmarks for comparable contracts (e.g., for Abrams tank upgrades, Stryker vehicle engineering, or other armored platforms), it's challenging to definitively state if this is high or low. However, given the duration (over 6 years) and the critical nature of combat vehicle systems, a multi-million dollar award is not unexpected for a sole-source, long-term engineering support contract.

What are the key performance indicators (KPIs) or deliverables expected under this systems engineering services contract?

The provided data identifies the contract as being for 'SYSTEMS ENGINEERING SERVICES' related to 'COMBAT VEHICLES'. Key performance indicators and deliverables would typically be detailed in the Performance Work Statement (PWS) or Statement of Work (SOW) attached to the contract. These often include: timely delivery of technical documentation, successful integration of new systems or upgrades, adherence to design specifications, performance of system testing and validation, provision of technical support, and achievement of specific engineering milestones. For a contract of this magnitude and duration, KPIs would likely focus on the successful sustainment and potential modernization of critical combat vehicle systems.

What is General Dynamics Land Systems' track record with the Department of Defense, particularly concerning combat vehicle programs?

General Dynamics Land Systems (GDLS) has a long and significant track record with the Department of Defense, particularly in the realm of combat vehicles. They are the prime contractor for the M1 Abrams main battle tank and the Stryker family of vehicles, among others. Their history includes numerous contracts for production, upgrades, sustainment, and associated engineering services. While GDLS is a major defense supplier, like any large contractor, they have faced scrutiny regarding contract performance, costs, and program execution on various projects over the years. However, their continued role as a primary provider of armored vehicles indicates a generally accepted capability and performance level by the DoD.

Are there any identified risks associated with this contract, such as cost overruns, schedule delays, or performance issues?

The primary risk indicator from the provided data is the sole-source nature of the award. This inherently carries a risk of higher costs due to the lack of competitive pressure. Without access to the contract's PWS, risk mitigation plans, or historical performance data for this specific award, it's difficult to identify other specific risks like cost overruns or schedule delays. However, large, long-term engineering contracts for complex systems like combat vehicles always carry inherent risks related to technological obsolescence, changing requirements, and the complexities of integration. Robust program management and oversight by the Army are critical to mitigating these potential risks.

How does this contract fit into the broader landscape of U.S. Army modernization efforts for its ground vehicle fleet?

This contract for systems engineering services directly supports the U.S. Army's ongoing efforts to modernize and sustain its ground vehicle fleet, particularly its combat vehicles. Modernization often involves upgrading existing platforms with new technologies (e.g., improved armor, lethality, networking capabilities) or developing entirely new vehicle systems. Systems engineering is fundamental to managing the complexity of these upgrades and new developments, ensuring that different components work together effectively and meet operational requirements. This contract likely underpins specific modernization programs or sustainment initiatives for key combat vehicle families.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 38500 MOUND ROAD, STERLING HEIGH, MI

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $8,651,973

Exercised Options: $8,651,973

Current Obligation: $264,952,193

Timeline