DoD awarded $132.5M for vehicular power transmission components, with limited competition

Contract Overview

Contract Amount: $60,239,813 ($60.2M)

Contractor: Allison Transmission, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-02-14

End Date: 2008-05-31

Contract Duration: 1,202 days

Daily Burn Rate: $50.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200505!003463!2100!W56HZV!TACOM - WARREN !W56HZV05C0233 !A!N! !N! ! !20050214!20051231!132572843!005356613!005356613!N!ALLISON TRANSMISSION, GENERAL !4700 WEST 10TH STREET !INDIANAPOLIS !IN!46222!36000!097!18!INDIANAPOLIS !MARION !INDIANA !+000001669093!N!N!000000000000!2520!VEHICULAR POWER TRANSMISSION COMPONENTS !A4A!COMBAT VEHICLES !000 !* !336350!E! !3! ! ! ! ! !20200930!B! ! !A! !D!U!J!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $60.2 million to ALLISON TRANSMISSION, INC. for work described as: 200505!003463!2100!W56HZV!TACOM - WARREN !W56HZV05C0233 !A!N! !N! ! !20050214!20051231!132572843!005356613!005356613!N!ALLISON TRANSMISSION, GENERAL !4700 WEST 10TH STREET !INDIANAPOLIS !IN!46222!36000!097!18!INDIANAPOLIS !MARI… Key points: 1. Contract awarded for critical vehicular power transmission components. 2. Limited competition may have impacted overall value. 3. Contract duration of over 3 years suggests a stable, long-term need. 4. The award falls within the broader Defense sector's spending on vehicle parts. 5. Potential for price increases due to limited competition needs monitoring.

Value Assessment

Rating: fair

The total award amount of $132.5 million for vehicular power transmission components appears substantial. Benchmarking against similar contracts for specialized vehicle parts is challenging without more granular data on specific component types and quantities. However, the 'NOT COMPETED' status raises concerns about whether the government secured the best possible price. Without competitive bids, it's difficult to definitively assess value for money, suggesting a fair to questionable value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Allison Transmission, Inc., was solicited. This significantly limits the government's ability to explore alternative suppliers or negotiate based on multiple offers. The lack of competition means that price discovery is entirely dependent on the vendor's proposed pricing and the government's negotiation.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This contract's value could have been impacted by the absence of competing bids.

Public Impact

The U.S. Army benefits from the supply of essential components for its combat vehicles. This contract ensures the operational readiness of military ground vehicles. The primary geographic impact is within Indiana, where the contractor is located. Workforce implications are likely concentrated at Allison Transmission's facilities in Indiana.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Lack of transparency in the procurement process.
Potential for cost overruns without competitive pressure.

Positive Signals

Ensures supply of critical components for defense needs.
Contract awarded to an established manufacturer.
Long-term contract provides supply chain stability.

Sector Analysis

This contract falls within the broader "Motor Vehicle Transmission and Power Train Parts Manufacturing" industry, classified under NAICS code 336350. This sector is vital for both commercial and defense applications. Defense spending on specialized vehicle components can be significant, especially for maintaining aging fleets or fielding new platforms. Comparable spending benchmarks are difficult to establish without knowing the specific type and volume of components, but the award size suggests a substantial procurement.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the sole-source nature of the award, it is unlikely that subcontracting opportunities for small businesses were explicitly mandated or solicited as part of a competitive process. The impact on the small business ecosystem is therefore likely minimal unless the prime contractor proactively engages small businesses for subcontracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Transparency is limited due to the sole-source award. Accountability measures would be tied to contract performance clauses and delivery schedules. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Combat Vehicle Procurement
Tactical Wheeled Vehicle Fleet Sustainment
Defense Industrial Base - Vehicle Manufacturing
Propulsion Systems for Military Vehicles

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.2 million to ALLISON TRANSMISSION, INC.. 200505!003463!2100!W56HZV!TACOM - WARREN !W56HZV05C0233 !A!N! !N! ! !20050214!20051231!132572843!005356613!005356613!N!ALLISON TRANSMISSION, GENERAL !4700 WEST 10TH STREET !INDIANAPOLIS !IN!46222!36000!097!18!INDIANAPOLIS !MARION !INDIANA !+000001669093!N!N!000000000000!2520!VEHICULAR POWER TRANSMISSION COMPONENTS !A4A!COMBAT VEHICLES !000 !* !336350!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION, 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 $60.2 million.

What is the period of performance?

Start: 2005-02-14. End: 2008-05-31.

What is the track record of Allison Transmission, Inc. in supplying components to the Department of Defense?

Allison Transmission, Inc. has a long-standing history of supplying advanced propulsion solutions, including transmissions and powertrain components, to the U.S. military. They are a well-established manufacturer known for producing robust and reliable components suitable for demanding military applications. Their products are integrated into a wide range of tactical wheeled vehicles, including those used by the Army and Marine Corps. The company has experience meeting stringent military specifications and performance requirements. This specific contract, awarded in 2005, reflects their established position as a key supplier within the defense industrial base for vehicular power transmission systems.

How does the $132.5 million award compare to typical spending on vehicular power transmission components?

The $132.5 million award for vehicular power transmission components is a significant sum, indicating a substantial procurement. However, direct comparisons are challenging without knowing the exact nature and quantity of the components. Spending in this category can fluctuate based on fleet modernization programs, sustainment needs for existing vehicles, and the complexity of the components. For context, the Department of Defense's overall budget for vehicle procurement and sustainment runs into billions of dollars annually. This single award represents a notable portion of spending within its specific sub-category, likely supporting a large number of vehicles or a particularly critical component set.

What are the primary risks associated with a sole-source award for critical defense components?

The primary risks associated with a sole-source award for critical defense components include potential overpricing due to the lack of competitive bidding, reduced innovation from the absence of market pressure, and a potential over-reliance on a single supplier. Taxpayers may bear higher costs as the government cannot leverage competition to secure the best value. Furthermore, if the sole-source provider experiences production issues, supply chain disruptions, or goes out of business, it could severely impact the availability of essential military equipment, posing a risk to national security readiness. The government also has less leverage in negotiating terms and conditions.

How effective is the government in ensuring performance and quality from sole-source suppliers?

The government employs several mechanisms to ensure performance and quality from sole-source suppliers, although the absence of competition can limit leverage. These include rigorous contract management, detailed performance specifications, quality assurance surveillance plans (QASPs), and acceptance testing. Contract clauses often stipulate delivery schedules, performance metrics, and defect reporting procedures. For critical components like those for military vehicles, the government typically has dedicated quality assurance representatives embedded with the contractor. However, the ultimate recourse for poor performance is often limited to contract termination or seeking damages, which can be more complex and disruptive than with a competitive award where alternatives exist.

What are the historical spending patterns for vehicular power transmission components within the Department of Defense?

Historical spending patterns for vehicular power transmission components within the Department of Defense show a consistent and substantial investment. This spending is driven by the large size and operational tempo of the U.S. military's ground vehicle fleet, which requires ongoing maintenance, repair, and replacement of critical powertrain parts. Spending levels can surge during periods of major fleet modernization or increased operational tempo, such as during prolonged conflicts. Conversely, spending may decrease during periods of budget austerity or when fleets are being downsized. The reliance on specialized, high-durability components for military applications often leads to higher per-unit costs compared to commercial equivalents, contributing to a steady demand and expenditure in this category over time.

What is the significance of the 'NOT COMPETED' status for this contract?

The 'NOT COMPETED' status, which in this case is more accurately described as 'sole-source' based on the data, signifies that the contract was awarded without soliciting bids from multiple potential suppliers. This typically occurs when only one source is capable of meeting the requirement, or in rare cases, due to urgent and compelling needs. For taxpayers, this status raises a red flag regarding potential value for money, as the absence of competition removes the downward pressure on pricing that multiple bids would provide. It necessitates robust government negotiation and oversight to ensure a fair price is paid, but inherently carries a higher risk of inflated costs compared to a fully competed contract.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Parts Manufacturing › Motor Vehicle Transmission and Power Train Parts Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV05R0118

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Allison Transmission Inc (UEI: 804407463)

Address: 4700 W 10TH ST, INDIANAPOLIS, IN, 46222

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline