DoD's $278.6M contract for combat vehicles awarded to DRS Sustainment Systems, Inc. without competition

Contract Overview

Contract Amount: $27,860,253 ($27.9M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2004-12-08

End Date: 2010-12-31

Contract Duration: 2,214 days

Daily Burn Rate: $12.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200503!001513!2100!W56HZV!TACOM - WARREN !W56HZV05C0003 !A!N! !N! ! !20041208!20050331!006265466!006265466!122604846!N!SYSTEMS & ELECTRONICS INC !201 EVANS LN !SAINT LOUIS !MO!63121!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000000551600!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !000 !* !336992!E! !1! ! ! ! ! !20200930!B! ! !A! !D!U!U!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: WEST PLAINS, HOWELL County, MISSOURI, 65775

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $27.9 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: 200503!001513!2100!W56HZV!TACOM - WARREN !W56HZV05C0003 !A!N! !N! ! !20041208!20050331!006265466!006265466!122604846!N!SYSTEMS & ELECTRONICS INC !201 EVANS LN !SAINT LOUIS !MO!63121!65000!510!29!ST. LOUIS !ST. … Key points: 1. This contract represents a significant investment in armored vehicle sustainment. 2. The lack of competition raises questions about potential overpricing and value for money. 3. Contract performance history and delivery timelines will be crucial indicators of success. 4. The award is situated within the broader defense industrial base for combat vehicles. 5. Oversight mechanisms will be key to ensuring accountability for this large expenditure.

Value Assessment

Rating: questionable

The total contract value of $278.6 million is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or alternative providers. The cost-plus-fixed-fee (CPFF) contract type suggests that the government bears a significant portion of the risk for cost overruns, which warrants close monitoring. Further analysis would be needed to compare the unit costs or service rates to similar contracts or industry standards to assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The specific justification for this approach is not detailed in the provided data. Sole-source awards can sometimes be necessary for specialized capabilities or urgent requirements, but they limit the government's ability to leverage market competition to secure the best possible pricing and terms.

Taxpayer Impact: Taxpayers may not have received the most cost-effective solution due to the absence of competitive pressure. This could potentially lead to higher overall costs for the sustainment of these critical military assets.

Public Impact

The primary beneficiaries are the U.S. Army units relying on the operational readiness of combat vehicles. The contract supports the sustainment and maintenance of tracked combat assault vehicles. The geographic impact is primarily within Missouri, where the contractor is located, and potentially at Army installations where the vehicles are deployed. This contract likely supports a workforce skilled in the maintenance and repair of heavy military equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs.
Cost-plus-fixed-fee structure can incentivize cost overruns if not managed tightly.
Dependence on a single contractor for critical sustainment could pose supply chain risks.

Positive Signals

Award to an established contractor with experience in defense systems.
Contract duration of over 2 years suggests a need for sustained support.
The contract number '336992' indicates a specific, trackable program.

Sector Analysis

This contract falls within the broader defense industrial base, specifically focusing on the manufacturing and sustainment of combat vehicles. The market for military vehicle components and maintenance services is specialized, often dominated by a few key players due to high barriers to entry, including technical expertise, security clearances, and established relationships with the Department of Defense. Spending in this sector is driven by military readiness requirements and modernization programs.

Small Business Impact

The provided data indicates that small business participation was not a primary consideration for this sole-source award, as indicated by 'ss: false' and 'sb: false'. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that the primary contractor, DRS Sustainment Systems, Inc., is likely a large business, and the contract may not directly benefit the small business ecosystem within this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. The Defense Contract Management Agency (DCMA) would likely be involved in monitoring performance and costs. The contract type (CPFF) necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency would be enhanced through regular reporting requirements and potential audits by the Defense Contract Audit Agency (DCAA) or the Department of Defense Inspector General.

Related Government Programs

Combat Vehicles
Armored Vehicle Manufacturing
Military Vehicle Maintenance
Defense Logistics
Army Sustainment Programs

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus contract type increases government cost risk.
Potential for contractor dependency and supply chain vulnerability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to DRS SUSTAINMENT SYSTEMS, INC. 200503!001513!2100!W56HZV!TACOM - WARREN !W56HZV05C0003 !A!N! !N! ! !20041208!20050331!006265466!006265466!122604846!N!SYSTEMS & ELECTRONICS INC !201 EVANS LN !SAINT LOUIS !MO!63121!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000000551600!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !000 !* !336992!E! !1! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is DRS SUSTAINMENT 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 $27.9 million.

What is the period of performance?

Start: 2004-12-08. End: 2010-12-31.

What is the track record of DRS Sustainment Systems, Inc. with similar Department of Defense contracts?

DRS Sustainment Systems, Inc. has a history of performing contracts related to defense systems and sustainment. While specific details of past performance on similar combat vehicle contracts are not provided in this data snippet, their role as a significant defense contractor suggests experience in this domain. A deeper dive into their contract history, including past performance evaluations, on-time delivery rates, and cost control metrics for comparable awards, would be necessary to fully assess their track record. This would involve reviewing contract databases and performance reports to identify any patterns of success or areas of concern.

How does the awarded amount compare to historical spending on combat vehicle sustainment by the Department of the Army?

The awarded amount of $278.6 million is a significant sum for combat vehicle sustainment. To contextualize this, historical spending data for similar sustainment contracts by the Department of the Army would need to be analyzed. This would involve identifying contracts for the maintenance, repair, and overhaul of tracked combat vehicles over the past several fiscal years. Comparing the magnitude of this award to the average or median spending on such services can indicate whether this contract is unusually large or within the expected range. Factors such as the number of vehicles covered, the scope of services, and the duration of the contract would also be critical for a meaningful comparison.

What are the primary risks associated with a sole-source award for critical military equipment sustainment?

The primary risks associated with a sole-source award for critical military equipment sustainment include a lack of price competition, which can lead to inflated costs for the government. There is also a reduced incentive for the contractor to innovate or improve efficiency, as they face no direct competitive pressure. Furthermore, sole-source awards can create dependency on a single supplier, potentially leading to supply chain vulnerabilities if that supplier experiences financial difficulties or operational disruptions. Ensuring robust oversight and negotiation is paramount to mitigate these risks.

What is the significance of the 'COST PLUS FIXED FEE' contract type in this context?

The 'COST PLUS FIXED FEE' (CPFF) contract type means that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. In the context of combat vehicle sustainment, this structure shifts much of the cost risk to the government. While it can be useful when the scope of work is not precisely defined or involves significant uncertainty, it requires stringent oversight to ensure that costs are reasonable and that the contractor is not incentivized to incur excessive expenses. The fixed fee provides a profit incentive, but the primary cost control relies on government auditing and monitoring of incurred costs.

What are the potential implications of this contract on the broader defense industrial base for combat vehicles?

This contract, awarded to DRS Sustainment Systems, Inc., reinforces their position within the defense industrial base for combat vehicle sustainment. As a sole-source award, it may limit opportunities for other potential competitors to gain a foothold or expand their capabilities in this specific niche. However, it also ensures continued support for critical Army assets, contributing to the overall readiness of the force. The long-term implications depend on whether this award is part of a broader strategy to consolidate sustainment capabilities or a one-time necessity due to unique circumstances.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 201 EVANS LN, SAINT LOUIS, MO, 90

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline