DoD's $17.8M contract for Jeep Wrangler parts to Egypt raises questions on competition and value

Contract Overview

Contract Amount: $17,804,019 ($17.8M)

Contractor: US Motor Works LLC

Awarding Agency: Department of Defense

Start Date: 2009-06-12

End Date: 2014-01-01

Contract Duration: 1,664 days

Daily Burn Rate: $10.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: VARIETY OF SPARE PARTS AND ENGINE RELATED COMPONENTS RELATED TO THE CJ JEEP WRANGLER VEHICLE, FMS, GOVERNMENT OF EGYPT.

Place of Performance

Location: CERRITOS, LOS ANGELES County, CALIFORNIA, 90703, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $17.8 million to US MOTOR WORKS LLC for work described as: VARIETY OF SPARE PARTS AND ENGINE RELATED COMPONENTS RELATED TO THE CJ JEEP WRANGLER VEHICLE, FMS, GOVERNMENT OF EGYPT. Key points: 1. Contract awarded without competition, limiting price discovery and potentially increasing costs. 2. Significant duration of over 5 years for spare parts delivery. 3. Focus on a specific vehicle model (CJ Jeep Wrangler) suggests niche requirements. 4. Awarded by the Department of the Army, indicating military operational needs. 5. Contractor, US Motor Works LLC, has a history with government contracts. 6. Lack of clear performance metrics or value-for-money assessment in provided data.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding and specific performance data. The total award amount of $17.8 million over approximately five years for spare parts suggests a substantial investment. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess if the pricing represents good value for the taxpayer. The absence of a competitive process means there's no market-driven validation of the price.

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 among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in urgent situations. The lack of competition means that potential cost savings that could arise from a bidding process were not realized, and the government did not benefit from a wider range of offers.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to secure the best possible deal.

Public Impact

The primary beneficiaries are the Egyptian government, receiving essential spare parts for military vehicles. The contract ensures the operational readiness of CJ Jeep Wrangler vehicles used by the Egyptian military. Geographic impact is focused on Egypt, supporting a foreign military sales initiative. Workforce implications are primarily within the contractor's organization, US Motor Works LLC, and potentially its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may have resulted in inflated prices.
Long contract duration without clear performance benchmarks raises concerns about ongoing value.
Specificity of parts for an older vehicle model might indicate limited market options, but this should be verified.
Oversight of parts quality and delivery for a foreign military sale requires robust monitoring.

Positive Signals

Contract supports a Foreign Military Sales (FMS) program, aligning with US foreign policy objectives.
The contractor, US Motor Works LLC, is a known entity in government contracting for vehicle parts.
Firm Fixed Price contract type provides cost certainty for the government, assuming the scope is well-defined.

Sector Analysis

This contract falls within the Motor Vehicle Parts Manufacturing sector (NAICS 336399). This sector is characterized by the production of a wide range of automotive components. The contract's focus on specific spare parts for a particular vehicle model suggests a niche within this broader industry. Comparable spending benchmarks are difficult to establish without knowing the exact nature and quantity of parts, but government procurement of vehicle parts is a significant market.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal based on the provided information. It's possible that US Motor Works LLC utilizes small businesses as suppliers, but this is not detailed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a Foreign Military Sales (FMS) case, there are likely additional layers of oversight involving the Defense Security Cooperation Agency (DSCA). Transparency is limited due to the sole-source nature and the focus on foreign military sales, making public accountability more challenging.

Related Government Programs

Foreign Military Sales (FMS)
Department of Defense Vehicle Procurement
Automotive Parts Supply Chain
Military Logistics Support

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration without clear performance metrics.
Potential for overpayment due to lack of competition.
Limited transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.8 million to US MOTOR WORKS LLC. VARIETY OF SPARE PARTS AND ENGINE RELATED COMPONENTS RELATED TO THE CJ JEEP WRANGLER VEHICLE, FMS, GOVERNMENT OF EGYPT.

Who is the contractor on this award?

The obligated recipient is US MOTOR WORKS 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 $17.8 million.

What is the period of performance?

Start: 2009-06-12. End: 2014-01-01.

What is the track record of US Motor Works LLC with government contracts, particularly regarding performance and pricing?

US Motor Works LLC has a history of receiving government contracts, primarily for vehicle parts and related services. Analysis of past awards would be necessary to assess their performance record, including on-time delivery, quality of goods, and adherence to contract terms. Pricing trends in previous contracts, especially those that were competed, could offer insights into their typical cost structures. However, without access to detailed performance evaluations and a broader dataset of their contracts, a comprehensive assessment of their track record remains limited. The current sole-source award makes direct comparison difficult.

How does the pricing of this contract compare to similar procurements for vehicle parts, either domestically or internationally?

Direct price comparison is difficult due to the sole-source nature of this award and the specific nature of the parts for the CJ Jeep Wrangler. Typically, competitive bidding allows for benchmarking against market rates and other vendor proposals. For FMS cases, pricing is often based on established government price lists, contractor's standard commercial prices, or negotiated rates. Without access to these specific pricing mechanisms or data from competed contracts for similar parts, it's impossible to definitively state if this contract's pricing is favorable. Further investigation into the pricing basis used by the Department of the Army would be required.

What are the specific risks associated with a sole-source award for military vehicle spare parts?

The primary risk of a sole-source award is the potential for higher costs due to the absence of competition, which can lead to reduced value for taxpayer money. There's also a risk of complacency from the contractor, as there's no immediate competitive threat to incentivize efficiency or innovation. Furthermore, reliance on a single supplier can create supply chain vulnerabilities if that supplier faces production issues or goes out of business. For military applications, ensuring the availability and quality of critical spare parts is paramount, and a sole-source approach requires robust government oversight to mitigate these risks.

What is the justification for awarding this contract on a sole-source basis, and was it the only viable option?

The justification for a sole-source award typically stems from specific circumstances such as the unavailability of the required parts from other sources, urgent and compelling needs, or unique technical requirements that only one contractor can meet. For this contract involving spare parts for the CJ Jeep Wrangler, the justification might relate to the specialized nature of the components, the limited number of manufacturers or distributors capable of supplying them, or specific requirements tied to the Foreign Military Sales program. A thorough review of the contracting officer's justification documentation would be necessary to understand the precise reasons and assess if alternative competitive strategies were explored and deemed unfeasible.

How does this contract align with broader US foreign military sales objectives and the strategic importance of supporting the Egyptian military?

This contract aligns with US foreign military sales objectives by providing essential equipment (spare parts) to a key regional partner, Egypt. Supporting the operational readiness of Egypt's military can contribute to regional stability and security, which are often strategic interests for the United States. FMS programs are designed to enhance the capabilities of allied and friendly nations, fostering interoperability and strengthening defense relationships. The provision of spare parts ensures that the vehicles procured through previous US assistance or sales remain functional, thereby maximizing the return on investment for both countries and supporting broader geopolitical goals.

Industry Classification

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

Product/Service Code: MECHANICAL POWER TRANSMISSION EQPT

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

Address: 16401 BERWYN RD, CERRITOS, CA, 90703

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

Financial Breakdown

Contract Ceiling: $17,804,019

Exercised Options: $17,804,019

Current Obligation: $17,804,019

Contract Characteristics

Cost or Pricing Data: YES

Timeline