DoD Spends $56.7M on MRAP Parts Without Competition, Raising Value Concerns

Contract Overview

Contract Amount: $56,741,200 ($56.7M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2008-07-03

End Date: 2009-06-26

Contract Duration: 358 days

Daily Burn Rate: $158.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: VARIOUS (13 DIFFERENT) MINE RESISTANT AMBUSH PROTECTED (MRAP) VEHICLE SUSTAINMENT SPARE PARTS

Place of Performance

Location: WARRENVILLE, DUPAGE County, ILLINOIS, 60555

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $56.7 million to ND DEFENSE LLC for work described as: VARIOUS (13 DIFFERENT) MINE RESISTANT AMBUSH PROTECTED (MRAP) VEHICLE SUSTAINMENT SPARE PARTS Key points: 1. Significant spending on critical vehicle sustainment parts. 2. Lack of competition suggests potential for inflated pricing. 3. High risk associated with sole-source procurement for essential defense assets. 4. Manufacturing sector for specialized vehicle parts is niche.

Value Assessment

Rating: questionable

The total award of $56.7M for MRAP sustainment parts lacks a clear benchmark due to the absence of competitive bidding. Without comparison to other offers, assessing the value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer competitive pricing.

Taxpayer Impact: The lack of competition on this substantial contract likely resulted in higher costs for taxpayers than a competed procurement would have yielded.

Public Impact

Ensures operational readiness of MRAP vehicles through parts availability. Potential for taxpayer funds to be used inefficiently due to non-competitive award. Impacts the defense industrial base by potentially favoring incumbent suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
High dollar value

Positive Signals

Ensures availability of critical parts
Supports military readiness

Sector Analysis

The defense sector relies on specialized manufacturing for critical components like MRAP parts. Spending benchmarks are difficult to establish without competitive data, but significant investments are typical for military vehicle sustainment.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as both 'sb' and 'ss' fields are false. This represents a missed opportunity for small business participation in defense contracting.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and prevent potential waste. Further review of the justification for non-competition is recommended.

Related Government Programs

All Other Motor Vehicle Parts Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Lack of competition
Potential for overpricing
Limited transparency
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.7 million to ND DEFENSE LLC. VARIOUS (13 DIFFERENT) MINE RESISTANT AMBUSH PROTECTED (MRAP) VEHICLE SUSTAINMENT SPARE PARTS

Who is the contractor on this award?

The obligated recipient is ND DEFENSE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $56.7 million.

What is the period of performance?

Start: 2008-07-03. End: 2009-06-26.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of available sources. Without specific documentation, it's impossible to determine the precise reason. However, for critical sustainment parts, the government often relies on specific manufacturers or limited suppliers, which can lead to non-competitive actions.

What is the risk of price escalation in sole-source defense contracts for vehicle parts?

The primary risk of price escalation in sole-source defense contracts is the absence of competitive pressure. When only one supplier is considered, they have significant leverage in setting prices. Without market validation through competing bids, there's a higher likelihood that prices may not reflect true market value, potentially leading to overpayment by the government.

How does this contract contribute to the overall effectiveness of MRAP vehicle operations?

This contract is crucial for maintaining the operational effectiveness of MRAP vehicles by ensuring the availability of necessary sustainment spare parts. Without these parts, vehicles could become inoperable, impacting troop safety and mission readiness. The $56.7M investment directly supports the logistical backbone required to keep these vital assets functioning in the field.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Parts Manufacturing › All Other Motor Vehicle Parts Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navistar International Corporation (UEI: 161984646)

Address: 4201 WINFIELD RD, WARRENVILLE, IL, 90

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

Financial Breakdown

Contract Ceiling: $56,741,200

Exercised Options: $56,741,200

Current Obligation: $56,741,200

Contract Characteristics

Cost or Pricing Data: NO

Timeline