DoD Awards $321.5M to General Dynamics for Egyptian M1A1 Tank Kits
Contract Overview
Contract Amount: $321,513,548 ($321.5M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2007-12-20
End Date: 2014-01-01
Contract Duration: 2,204 days
Daily Burn Rate: $145.9K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AWARD UCA FOR M1A1 TANK KIT FOR EGYPTIAN INCREMENT 10.
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $321.5 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: AWARD UCA FOR M1A1 TANK KIT FOR EGYPTIAN INCREMENT 10. Key points: 1. Significant award for armored vehicle modernization. 2. Sole-source contract raises questions about price discovery. 3. Long duration suggests complex integration and sustainment needs. 4. Focus on foreign military sales highlights international defense cooperation.
Value Assessment
Rating: questionable
The contract value of $321.5 million is substantial for a tank kit. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential alternatives or previous procurements of similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for taxpayers as there was no market pressure to achieve the lowest possible price.
Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium, as competitive forces were absent to drive down costs.
Public Impact
Enhances military capabilities of a key U.S. ally. Supports U.S. defense industrial base and jobs. Potential for follow-on sustainment and upgrade contracts. Impacts regional security dynamics in the Middle East.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Long contract duration increases risk of cost overruns.
- Lack of small business participation noted.
Positive Signals
- Supports critical foreign military sales objectives.
- Utilizes established and proven M1A1 tank technology.
- Provides long-term sustainment opportunities.
Sector Analysis
This award falls within the defense manufacturing sector, specifically armored vehicles. Spending benchmarks for such large-scale, sole-source foreign military sales are highly variable, but the value indicates a significant procurement.
Small Business Impact
The data indicates that small businesses were not directly involved as prime contractors in this award. Opportunities for small businesses may exist further down the supply chain, but direct prime contract awards are not evident.
Oversight & Accountability
Oversight of this sole-source contract is crucial to ensure adherence to the firm fixed price and to monitor performance against the contract requirements, especially given its long duration and significant value.
Related Government Programs
- Metal Tank (Heavy Gauge) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source procurement lacks competitive pricing.
- Long contract duration increases cost overrun risk.
- No indication of small business prime participation.
- Potential for vendor lock-in due to specialized nature.
Tags
metal-tank-heavy-gauge-manufacturing, department-of-defense, mi, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $321.5 million to GENERAL DYNAMICS LAND SYSTEMS INC.. AWARD UCA FOR M1A1 TANK KIT FOR EGYPTIAN INCREMENT 10.
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 $321.5 million.
What is the period of performance?
Start: 2007-12-20. End: 2014-01-01.
What specific justifications were provided for the sole-source award, and were alternative competitive strategies considered and rejected?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. For this M1A1 tank kit, the justification likely centers on the specialized nature of the system and the existing relationship with General Dynamics. A thorough review would examine if any market research was conducted to identify potential competitors or if the program's requirements inherently limited competition.
How does the per-unit cost, if calculable, compare to historical M1A1 kit procurements or similar international sales?
Calculating a precise per-unit cost is challenging without knowing the exact number of kits. However, given the $321.5 million award and the nature of tank kits, the cost per unit is likely substantial. Benchmarking against previous M1A1 procurements or comparable international sales would be essential to determine if the pricing is competitive, especially considering the absence of a competitive bidding process.
What are the long-term sustainment and upgrade implications of this award for both the U.S. and Egypt?
This award implies a long-term relationship for sustainment, spare parts, and potential future upgrades of the M1A1 tanks for Egypt. This provides ongoing revenue streams for General Dynamics and ensures the operational readiness of a key U.S. ally. However, it also necessitates continued U.S. oversight to manage these long-term costs and ensure technology transfer is appropriately managed.
Industry Classification
NAICS: Manufacturing › Boiler, Tank, and Shipping Container Manufacturing › Metal Tank (Heavy Gauge) Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
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: 6000 E 17 MILE RD, STERLING HEIGHTS, MI, 10
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $321,513,548
Exercised Options: $321,513,548
Current Obligation: $321,513,548
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2007-12-20
Current End Date: 2014-01-01
Potential End Date: 2014-01-01 00:00:00
Last Modified: 2012-06-21
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