DoD awards $65M for Stryker vehicle support, raising questions on competition and value

Contract Overview

Contract Amount: $65,047,127 ($65.0M)

Contractor: GM Gdls Defense Group, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2006-02-17

End Date: 2007-12-31

Contract Duration: 682 days

Daily Burn Rate: $95.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: 200605!003237!2100!W56HZV!TACOM - WARREN !W56HZV06CB003 !A!N! !Y! ! !20060217!20070228!098155158!098155158!098155158!N!GMGDLS DEFENSE GROUP LLC !14920 23 MILE RD !SHELBY TOWNSHI !MI!48315!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000031875000!N!N!000000000000!AD91!RDTE/OTHER DEFENSE-BASIC RESEARCH !S1 !SERVICES !299 !STRYKER (IAV) !336992!E! !1! ! ! ! ! !99990909!B! ! !N!Z!D!N!S!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $65.0 million to GM GDLS DEFENSE GROUP, L.L.C. for work described as: 200605!003237!2100!W56HZV!TACOM - WARREN !W56HZV06CB003 !A!N! !Y! ! !20060217!20070228!098155158!098155158!098155158!N!GMGDLS DEFENSE GROUP LLC !14920 23 MILE RD !SHELBY TOWNSHI !MI!48315!76460!099!26!STERLING HEIGHTS !MACO… Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Significant funding allocated for research, development, testing, and evaluation (RDTE). 3. Contractor has a track record with defense contracts, but specific performance data is limited. 4. Geographic concentration of awardee in Michigan. 5. Contract duration of over 1.5 years suggests ongoing support needs. 6. The 'COST NO FEE' contract type warrants scrutiny for potential cost overruns.

Value Assessment

Rating: questionable

The contract's value of $65 million for a little over a year of support for the Stryker vehicle platform is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The 'COST NO FEE' contract type, while sometimes used for specific R&D purposes, can obscure true costs and may not incentivize efficiency. Further analysis would be needed to compare the awarded amount to the scope of work and expected deliverables 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 it was not competed. This limits the opportunity for multiple vendors to bid, which typically drives down prices and fosters innovation. The lack of competition raises concerns about whether the government secured the best possible pricing and terms. Without a competitive process, it's challenging to ascertain the full range of available solutions or the market's true capacity.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government missed an opportunity to leverage market forces to achieve cost savings and potentially better service delivery.

Public Impact

The primary beneficiaries are likely the U.S. Army, specifically units utilizing the Stryker family of vehicles. Services delivered include research, development, testing, and evaluation (RDTE) related to the Stryker platform. The geographic impact is concentrated in Michigan, where the contractor is located. Workforce implications include potential job creation or retention within the defense manufacturing and support sector in Michigan.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source award limits transparency and potential for innovation.
The 'COST NO FEE' contract type can obscure actual project expenses.
Limited public information on contractor performance for this specific award.

Positive Signals

Award supports critical military hardware (Stryker vehicles).
Contractor is an established entity within the defense sector.
Awardee is located in Michigan, potentially supporting local jobs.

Sector Analysis

This contract falls within the broader Defense Industrial Base sector, specifically focusing on military vehicle manufacturing and support. The market for armored vehicle components and related R&D is specialized, with a limited number of prime contractors capable of handling such complex systems. Spending in this area is driven by military modernization efforts and operational readiness requirements. Comparable spending benchmarks would typically involve other contracts for vehicle sustainment, upgrades, or new development programs within the Department of Defense.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of the work and the sole-source award, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued through a competitive process. The impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Specific accountability measures would depend on the contract's detailed terms and conditions, including performance metrics and reporting requirements. Transparency is limited due to the sole-source nature of the award and the 'COST NO FEE' structure, which can make it difficult for the public to fully assess cost-effectiveness. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Stryker Brigade Combat Team (SBCT) programs
Army陆军陆战队车辆研发
Tactical Wheeled Vehicle programs
Defense Research and Development contracts

Risk Flags

Sole-source award lacks competitive justification.
Cost-reimbursement contract type ('COST NO FEE') may lack cost control incentives.
Limited transparency regarding specific deliverables and performance metrics.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.0 million to GM GDLS DEFENSE GROUP, L.L.C.. 200605!003237!2100!W56HZV!TACOM - WARREN !W56HZV06CB003 !A!N! !Y! ! !20060217!20070228!098155158!098155158!098155158!N!GMGDLS DEFENSE GROUP LLC !14920 23 MILE RD !SHELBY TOWNSHI !MI!48315!76460!099!26!STERLING HEIGHTS !MACOMB !MICHIGAN !+000031875000!N!N!000000000000!AD91!RDTE/OTHER DEFENSE-BASIC RESEARCH !S1 !SERVICES !299 !STRYKER (IAV) !336992!E! !1! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is GM GDLS DEFENSE GROUP, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $65.0 million.

What is the period of performance?

Start: 2006-02-17. End: 2007-12-31.

What is the specific scope of work for this $65 million contract awarded to GM GDLS Defense Group, LLC?

The provided data indicates the contract (NAICS 336992) is for 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' and falls under 'RDTE/OTHER DEFENSE-BASIC RESEARCH'. While the exact deliverables are not detailed in the summary data, the contract type ('COST NO FEE') and the nature of the award suggest it likely encompasses research, development, testing, and evaluation activities related to the Stryker family of vehicles. This could include exploring new technologies, improving existing systems, or conducting performance assessments under various conditions. The duration of the contract (February 2006 to December 2007) implies a sustained effort over approximately 22 months.

Why was this contract awarded on a sole-source basis instead of being competed?

The provided data explicitly states the contract type as 'NOT COMPETED', indicating a sole-source award. Specific justifications for sole-sourcing are not included in the summary data. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, or urgent and compelling needs where competition is not feasible. Without the official justification document (e.g., a Justification and Approval document), the precise reasons remain unknown. This lack of competition is a significant factor in assessing value for money.

How does the 'COST NO FEE' contract type affect cost control and transparency?

A 'COST NO FEE' (Cost Without Fee) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This type of contract is generally used for research and development efforts where the scope is uncertain and the risk of cost overrun is high. While it aims to facilitate R&D by removing the profit motive, it can reduce the contractor's incentive to control costs rigorously, as they are reimbursed for all allowable expenses. Transparency can also be an issue, as the final cost is determined by the actual expenses incurred, which may not be fully predictable or easily scrutinized upfront compared to fixed-price contracts. Oversight is crucial to ensure costs are allowable, allocable, and reasonable.

What is the historical spending pattern for similar services related to the Stryker vehicle platform?

The provided data focuses on a single contract award. To assess historical spending patterns for Stryker vehicle support, one would need to analyze multiple contracts over several fiscal years. This would involve querying federal procurement databases (like FPDS-NG or USASpending.gov) for contracts awarded to GM GDLS Defense Group, LLC, and other relevant contractors for Stryker-related R&D, sustainment, upgrades, and manufacturing. Analyzing trends in contract values, types (competitive vs. sole-source), and durations would provide context for the $65 million award. Without this broader dataset, it's impossible to determine if this award represents a typical or anomalous level of spending.

What is the track record of GM GDLS Defense Group, LLC in fulfilling defense contracts, particularly those involving armored vehicles?

General Dynamics Land Systems (GDLS), the parent company or related entity, is a major defense contractor with extensive experience in designing, manufacturing, and supporting armored vehicles, including the Stryker. GM GDLS Defense Group, LLC, as indicated by the awardee name, likely represents a specific division or subsidiary involved in this contract. While the summary data doesn't detail past performance metrics for this specific award, GDLS's broader history includes numerous large-scale contracts for vehicles like the Abrams tank and the Stryker. Assessing their track record would involve reviewing past performance evaluations, on-time delivery rates, and quality metrics from previous government contracts.

Are there any known risks associated with this contract or the contractor?

Risks associated with this contract primarily stem from its sole-source nature, which limits competition and potentially increases costs. The 'COST NO FEE' contract type introduces risks related to cost control and transparency. Specific risks related to the contractor, GM GDLS Defense Group, LLC, would typically be identified through past performance reviews, financial health assessments, and any history of contract disputes or quality issues. Without access to detailed performance data or risk assessments specific to this contract, potential risks remain largely inferred from the contract structure and award process.

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 NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 38500 MOUND ROAD, STERLING HEIGHTS, MI, 10

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline