DoD awards $21.8M contract for tractor head movement, raising questions on value and competition

Contract Overview

Contract Amount: $21,792,988 ($21.8M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2008-09-02

End Date: 2009-11-30

Contract Duration: 454 days

Daily Burn Rate: $48.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MOVEMENT OF TRACTOR HEADS FROM ORIGINAL MFGERED LOCATION SUNNYVALE, TX TO SEMI-TRAILERS MFGERED LOCATION IN SARASOTA, FLORIDA.

Place of Performance

Location: LISLE, DUPAGE County, ILLINOIS, 60532

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $21.8 million to ND DEFENSE LLC for work described as: MOVEMENT OF TRACTOR HEADS FROM ORIGINAL MFGERED LOCATION SUNNYVALE, TX TO SEMI-TRAILERS MFGERED LOCATION IN SARASOTA, FLORIDA. Key points: 1. Contract value appears high for transportation services, warranting a closer look at unit costs. 2. Full and open competition was utilized, but the number of bidders is not specified. 3. Contract performance period is 454 days, indicating a medium-term logistical requirement. 4. The contract is categorized under Heavy Duty Truck Manufacturing, which may not fully capture the service provided. 5. Fixed-price contract type suggests risk is largely borne by the contractor. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $21.8 million for moving tractor heads over a 454-day period seems substantial. Without specific details on the number of units moved or the distance covered, it's difficult to benchmark the value effectively. However, comparing this to typical freight transportation costs suggests a potentially higher-than-average price per movement. Further analysis of the scope of work and comparable logistics contracts would be needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is generally positive for price discovery. However, the number of bids received is crucial for understanding the actual level of competition. If only a few bids were submitted, the government may not have achieved the most competitive pricing. The absence of this detail limits the assessment of how effectively competition drove down costs.

Taxpayer Impact: Full and open competition theoretically benefits taxpayers by encouraging multiple vendors to bid, leading to potentially lower prices. However, the true benefit depends on the number of actual bidders and the resulting price.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, for logistical support. The service involves the movement of tractor heads from manufacturing locations to assembly points. The geographic scope includes movement from Sunnyvale, TX to Sarasota, FL. This contract supports the defense industrial base by facilitating the movement of critical components for heavy-duty trucks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detail on the number of bidders limits assessment of true competition.
The classification under 'Heavy Duty Truck Manufacturing' might misrepresent the primary service as transportation logistics.
Unit cost analysis is not possible without more granular data on services rendered.

Positive Signals

Awarded under full and open competition, indicating an effort to maximize vendor participation.
Firm fixed-price contract type shifts cost overrun risk to the contractor.
Contract duration of 454 days provides a defined period for service delivery.

Sector Analysis

This contract falls under the broad category of transportation and logistics services, often supporting the defense industrial base. The market for specialized heavy-duty vehicle transportation is competitive, with numerous carriers capable of handling such movements. The value of this contract, at $21.8 million, is significant within this niche, suggesting a substantial volume or complexity of movements. Comparable spending benchmarks would typically focus on cost per mile or cost per ton-mile for similar heavy haul operations.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract were likely limited, unless they were prime contractors who won the bid. The overall impact on the small business ecosystem for this particular award is minimal based on the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which penalizes the contractor for cost overruns. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Logistics Contracts
Heavy Equipment Transportation Services
Defense Manufacturing Support
Army Transportation Command Contracts

Risk Flags

Potential value for money concerns due to high contract value for transportation services.
Unclear level of competition despite 'full and open' award.
Misclassification of service under NAICS code.
Lack of specific performance metrics or unit cost data.
Absence of small business subcontracting requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.8 million to ND DEFENSE LLC. MOVEMENT OF TRACTOR HEADS FROM ORIGINAL MFGERED LOCATION SUNNYVALE, TX TO SEMI-TRAILERS MFGERED LOCATION IN SARASOTA, FLORIDA.

Who is the contractor on this award?

The obligated recipient is ND DEFENSE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.8 million.

What is the period of performance?

Start: 2008-09-02. End: 2009-11-30.

What was the specific scope of work and the total number of tractor heads moved under this contract?

The provided data indicates the contract was for the 'MOVEMENT OF TRACTOR HEADS FROM ORIGINAL MFGERED LOCATION SUNNYVALE, TX TO SEMI-TRAILERS MFGERED LOCATION IN SARASOTA, FLORIDA.' However, the exact quantity of tractor heads moved and the specific services included (e.g., towing, specialized transport, delivery timelines) are not detailed. Without this information, it is impossible to calculate a precise cost per unit or to fully understand the scope of the $21.8 million award. This lack of detail hinders a thorough value-for-money assessment.

How many bids were received for this full and open competition, and what was the range of proposed prices?

The contract was awarded under 'FULL AND OPEN COMPETITION,' which theoretically allows any responsible source to submit an offer. However, the data does not specify the number of bids received or the pricing details of those bids. Knowing the number of bidders is critical to assessing the effectiveness of the competition. A low number of bids, even in a full and open competition, can indicate limited market interest or potential barriers to entry, which might result in less competitive pricing for the government. The absence of this data prevents a robust analysis of price discovery.

Can the $21.8 million contract value be benchmarked against similar transportation or logistics contracts?

Benchmarking the $21.8 million contract value is challenging without more specific details on the services provided, such as the distance traveled, the number of units transported, and the specific type of heavy-duty transport required. General freight transportation costs vary widely. If this contract involved simple towing over short distances, the value might seem high. If it involved complex, long-distance, specialized heavy-haul transport with significant logistical coordination, the value could be more justifiable. A comparison to contracts for moving similar large-scale equipment or components within the defense sector would be most relevant, but such data is not provided.

What is the significance of the contract being classified under NAICS code 336120 (Heavy Duty Truck Manufacturing)?

The classification under NAICS code 336120, 'Heavy Duty Truck Manufacturing,' appears incongruous with the described service: 'MOVEMENT OF TRACTOR HEADS.' While tractor heads are components of heavy-duty trucks, the service itself is primarily transportation and logistics, not manufacturing. This misclassification could obscure the true nature of the spending and make it difficult to find comparable contracts within the correct industry sector. It might suggest an administrative categorization issue rather than a reflection of the actual work performed.

What are the potential risks associated with a firm fixed-price contract for this type of service?

A firm fixed-price (FFP) contract, like this one, places the primary responsibility for cost control on the contractor. The main risk for the government is that the contractor may cut corners on quality or service to maintain profitability if costs escalate unexpectedly. For the contractor, the risk is bearing the full burden of cost overruns. In this case, if unforeseen logistical challenges arise (e.g., weather delays, mechanical issues with transport vehicles, regulatory hurdles), the contractor might face financial losses unless the initial price adequately accounted for such contingencies. The government's risk is primarily related to potential impacts on delivery schedules or service quality if the contractor struggles financially.

Are there any indications of contractor performance issues or past performance concerns with ND DEFENSE LLC on similar contracts?

The provided data does not include information on the past performance of ND DEFENSE LLC. Assessing a contractor's track record is crucial for evaluating the risk associated with a new award. Without access to performance evaluations, contract administration data, or any history of disputes or quality issues on previous government contracts, it is impossible to determine if ND DEFENSE LLC has a history of successful performance in similar logistical operations. This lack of historical performance data represents a gap in the risk assessment for this contract.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Manufacturing › Heavy Duty Truck Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,792,988

Exercised Options: $21,792,988

Current Obligation: $21,792,988

Contract Characteristics

Cost or Pricing Data: NO

Timeline