Army's $200M R&D contract for combat vehicle technology awarded to Saft America Inc. shows fair value

Contract Overview

Contract Amount: $20,059,391 ($20.1M)

Contractor: Saft America Inc

Awarding Agency: Department of Defense

Start Date: 2004-07-23

End Date: 2011-06-29

Contract Duration: 2,532 days

Daily Burn Rate: $7.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200410!008265!2100!W56HZV!TACOM - WARREN !W56HZV04C0596 !A!N! !Y! ! !20040723!20100730!005109285!410693592!275127975!N!SAFT AMERICA, INC !107 BEAVER COURT !COCKEYSVILLE !MD!21030!18250!005!24!COCKEYSVILLE !BALTIMORE !MARYLAND !+000002000000!N!N!000000000000!AE35!RDTE/MANUFACTURING TECHNOLOGY-ENG/MANUF DEVEL !A4A!COMBAT VEHICLES !000 !* !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!008!B! !Z!Y!Z! ! !N!C!N! ! ! !A!Z!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: COCKEYSVILLE, BALTIMORE County, MARYLAND, 21030

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $20.1 million to SAFT AMERICA INC for work described as: 200410!008265!2100!W56HZV!TACOM - WARREN !W56HZV04C0596 !A!N! !Y! ! !20040723!20100730!005109285!410693592!275127975!N!SAFT AMERICA, INC !107 BEAVER COURT !COCKEYSVILLE !MD!21030!18250!005!24!COCKEYSVILLE !BALT… Key points: 1. Contract awarded for research and development in manufacturing technology for combat vehicles. 2. Saft America Inc. secured the contract through full and open competition. 3. The contract duration was over 7 years, indicating a long-term need for the services. 4. The contract type was Cost Plus Fixed Fee, which can allow for cost overruns. 5. The contract was awarded to a single vendor, Saft America Inc. 6. The contract's value of approximately $200 million over its life cycle warrants close monitoring.

Value Assessment

Rating: fair

The contract's total award amount of $200,593,910 over its nearly 7-year duration suggests a significant investment in combat vehicle technology. Benchmarking this against similar R&D contracts is challenging due to the specialized nature of the work. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, carries inherent risks of cost escalation. The fixed fee component provides some cost control, but the overall value proposition depends heavily on the successful development of the promised technologies and their eventual integration into military platforms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The data shows 8 bids were received, suggesting a reasonably competitive environment for this specialized R&D requirement. The presence of multiple bidders generally supports price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The full and open competition for this contract is beneficial for taxpayers as it likely resulted in a more competitive price than if the contract had been awarded without broad solicitation. The multiple bids received suggest that the government explored various options to secure the best value.

Public Impact

The primary beneficiaries are the U.S. Army and its combat vehicle programs, which will receive advanced manufacturing technologies. The contract supports the development of new or improved manufacturing processes and technologies for military hardware. The geographic impact is primarily within the United States, with potential for job creation in the R&D and manufacturing sectors. This contract likely supports a specialized workforce in engineering, research, and advanced manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed carefully.
Long contract duration (over 7 years) increases the risk of technological obsolescence or shifting requirements.
Award to a single vendor, despite competition, means the Army is reliant on Saft America, Inc. for this specific technology development.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Multiple bids received (8) suggest a healthy level of interest and potential for competitive pricing.
Contract supports critical R&D for national defense, potentially leading to technological advancements.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on manufacturing technology for defense applications. The North American Industry Classification System (NAICS) code 541710 covers Research and Development in the Physical, Engineering, and Life Sciences. Spending in this area is crucial for maintaining a technological edge in defense. Comparable spending benchmarks would typically be found within the Department of Defense's R&D budget allocations for vehicle modernization and advanced manufacturing initiatives.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on securing specialized R&D capabilities, and the impact on the small business ecosystem may be indirect, depending on Saft America, Inc.'s own subcontracting practices.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the achievement of R&D milestones outlined in the contract. Transparency is generally facilitated through contract award databases like FPDS, though detailed technical progress reports are often proprietary. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Combat Vehicle Modernization Programs
Advanced Manufacturing Technology Initiatives
Department of Defense Research and Development Funding
Army Ground Vehicle Systems

Risk Flags

Cost Overrun Risk (CPFF)
Technological Obsolescence
Long-Term Project Management Complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to SAFT AMERICA INC. 200410!008265!2100!W56HZV!TACOM - WARREN !W56HZV04C0596 !A!N! !Y! ! !20040723!20100730!005109285!410693592!275127975!N!SAFT AMERICA, INC !107 BEAVER COURT !COCKEYSVILLE !MD!21030!18250!005!24!COCKEYSVILLE !BALTIMORE !MARYLAND !+000002000000!N!N!000000000000!AE35!RDTE/MANUFACTURING TECHNOLOGY-ENG/MANUF DEVEL !A4A!COMBAT VEHICLES !000 !* !541710!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is SAFT AMERICA 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 $20.1 million.

What is the period of performance?

Start: 2004-07-23. End: 2011-06-29.

What was Saft America, Inc.'s track record with similar R&D contracts prior to this award?

Prior to this significant award, Saft America, Inc. likely had a history of performance in battery technology and related power systems, which are critical for military vehicles. While specific R&D contract details are not provided in this dataset, their general business focus suggests experience in developing and manufacturing components for demanding applications. A deeper dive into their contract history, particularly with the Department of Defense, would be necessary to fully assess their track record in managing complex, long-term research and development projects of this scale and scope. This would include examining past performance evaluations, any disputes or claims, and their success in meeting technical and schedule milestones on previous government contracts.

How does the $200 million award compare to typical R&D spending for combat vehicle technology?

The $200 million award for combat vehicle technology R&D represents a substantial investment. While precise benchmarks for R&D spending in this niche are difficult to establish without access to classified or highly specific program data, this figure suggests a significant commitment by the Department of the Army to advancing its combat vehicle capabilities. Such contracts are often multi-year endeavors aimed at developing next-generation technologies. Compared to routine procurement or sustainment contracts, R&D awards of this magnitude are less frequent but are critical for maintaining a technological advantage. The value is justified if it leads to breakthroughs in areas like survivability, mobility, lethality, or network integration for future combat platforms.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, especially for research and development, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If the R&D effort encounters unforeseen technical challenges, requires more resources than initially estimated, or if cost estimation is inaccurate, the total cost to the government can exceed initial projections. While the fixed fee provides some incentive for the contractor to control costs (as it doesn't increase with higher costs), the government bears the brunt of the actual cost increases. Effective oversight, clear scope definition, and robust cost monitoring are crucial to mitigate these risks.

What is the expected impact of this contract on the future capabilities of Army combat vehicles?

This contract is expected to significantly enhance the future capabilities of Army combat vehicles by driving innovation in manufacturing technology. The R&D efforts funded under this award could lead to improvements in areas such as vehicle performance, durability, protection, power systems, and potentially the integration of new weapon or sensor technologies. The focus on manufacturing technology suggests an aim to not only develop new designs but also to find more efficient, cost-effective, or advanced ways to produce and upgrade existing and future platforms. Ultimately, this investment aims to ensure that Army combat vehicles remain technologically superior and adaptable to evolving battlefield threats.

How has the Army's spending on combat vehicle R&D evolved over the past decade?

The Army's spending on combat vehicle R&D has likely fluctuated over the past decade, influenced by strategic priorities, budget cycles, and the perceived threat landscape. Following periods of intense ground combat operations, there may have been a shift towards modernizing existing fleets and investing in next-generation platforms. Spending often increases during periods focused on technological advancement and maintaining a competitive edge against potential adversaries. Specific trends would depend on major program milestones, such as the development phases for vehicles like the Optionally Manned Fighting Vehicle (OMFV) or upgrades to the Abrams tank. Analyzing historical budget documents and contract award data would reveal patterns of investment and focus areas within combat vehicle R&D.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › ECONOMIC GROWTH/PRODUCTIVITY R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 8

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Saft Groupe SA (UEI: 278111732)

Address: 107 BEAVER COURT, COCKEYSVILLE, MD, 02

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline