DoD's $21.4M pneumatic tire contract awarded to ND Defense LLC raises questions about competition and value

Contract Overview

Contract Amount: $21,420,480 ($21.4M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2008-07-03

End Date: 2009-03-30

Contract Duration: 270 days

Daily Burn Rate: $79.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: WHEEL, PNEUMATIC TIRE

Place of Performance

Location: TRENTON, MERCER County, NEW JERSEY, 08638

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $21.4 million to ND DEFENSE LLC for work described as: WHEEL, PNEUMATIC TIRE Key points: 1. Significant spending on a single tire contract. 2. Lack of competition suggests potential for overpayment. 3. Limited contract duration may impact long-term supply. 4. Sector context: Defense Logistics Agency procures essential equipment.

Value Assessment

Rating: questionable

The contract value of $21.4 million for pneumatic tires is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts for tires of this type and quantity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition in this sole-source award likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The Department of Defense relies on ND Defense LLC for critical tire supply. Potential for future sole-source awards if justification is not rigorously reviewed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
No clear justification for sole-source

Positive Signals

Contract awarded to a specific company
Essential equipment procured

Sector Analysis

The Defense Logistics Agency (DLA) procures a wide range of equipment for the military. Spending on tires falls under general operational support, and benchmarks for such contracts vary widely based on specifications and quantity.

Small Business Impact

The data indicates this contract was not awarded to a small business, as the 'sb' field is false. Further analysis would be needed to determine if small businesses were excluded from bidding or if the prime contractor is a large business.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure proper justification and prevent potential waste, fraud, or abuse. Transparency in the procurement process is crucial.

Related Government Programs

Tire Manufacturing (except Retreading)
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Lack of competition
Potential for overpayment
Sole-source award without clear justification
Supply chain risk due to single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to ND DEFENSE LLC. WHEEL, PNEUMATIC TIRE

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 $21.4 million.

What is the period of performance?

Start: 2008-07-03. End: 2009-03-30.

What was the justification for awarding this contract on a sole-source basis instead of through a competitive process?

The provided data does not include the justification for the sole-source award. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without this information, it's impossible to assess the validity of the non-competitive decision.

How does the unit cost of these tires compare to commercially available alternatives or other government contracts?

The data does not provide a per-unit cost or allow for direct comparison. The total award amount is $21.4 million for 1 unit (likely a contract vehicle, not a single tire) over 270 days. To assess value, one would need to know the quantity of tires procured and their specific specifications to benchmark against market prices or other similar government contracts.

What is the potential impact on military readiness if ND Defense LLC is the only supplier for these specific tires?

If ND Defense LLC is the sole provider for these critical pneumatic tires, it could pose a risk to military readiness. Dependence on a single supplier can lead to supply chain vulnerabilities, price escalations, and potential disruptions if the supplier faces production issues or goes out of business. Diversification of suppliers is generally preferred for critical components.

Industry Classification

NAICS: Manufacturing › Rubber Product Manufacturing › Tire Manufacturing (except Retreading)

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV08R0567

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

Financial Breakdown

Contract Ceiling: $21,420,480

Exercised Options: $21,420,480

Current Obligation: $21,420,480

Contract Characteristics

Cost or Pricing Data: NO

Timeline