DoD awards $26M for 711 M871A3 trailers, with unit costs potentially exceeding benchmarks

Contract Overview

Contract Amount: $26,045,352 ($26.0M)

Contractor: Fontaine Commercial Trailer, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-11-18

End Date: 2009-12-08

Contract Duration: 385 days

Daily Burn Rate: $67.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TO PROCURE 711 M871A3 TRAILERS WITH UID AND CARWELL.

Place of Performance

Location: JASPER, WALKER County, ALABAMA, 35501

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $26.0 million to FONTAINE COMMERCIAL TRAILER, INC. for work described as: TO PROCURE 711 M871A3 TRAILERS WITH UID AND CARWELL. Key points: 1. The contract value of $26 million for 711 trailers suggests a significant investment in specialized military equipment. 2. Competition dynamics appear robust, with a full and open competition indicating multiple potential bidders. 3. The fixed-price contract type aims to transfer some cost risk to the contractor. 4. Delivery order structure implies this is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The relatively short performance period of approximately one year suggests a focused production and delivery schedule. 6. The contractor, Fontaine Commercial Trailer, Inc., is a specialized manufacturer in this niche market.

Value Assessment

Rating: fair

The total award of $26,045,352 for 711 trailers results in a per-unit cost of approximately $36,631. This figure needs to be benchmarked against similar military trailer procurements, especially considering the 'M871A3' designation which implies specific military-grade features and armor. Without direct comparisons for this exact model, it's difficult to definitively assess value. However, the base contract value of $6,765,000 for an unspecified number of trailers suggests this delivery order is for a substantial portion of the potential contract.

Cost Per Unit: Approximately $36,631 per trailer, pending comparison with similar military-grade armored trailers.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the designation suggests a broad solicitation.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and better value for money by leveraging market forces.

Public Impact

The primary beneficiaries are the U.S. Army units requiring specialized M871A3 trailers for logistical and operational support. The services delivered include the manufacturing and delivery of 711 armored trailers. The geographic impact is likely concentrated where the Army units receiving these trailers are stationed or deployed. Workforce implications include employment at the contractor's facility in Alabama and potentially at supplier locations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for all production complexities.
Dependence on a single contractor for this specific trailer model could pose supply chain risks if issues arise.
The unit cost needs careful benchmarking against similar military-grade equipment to ensure optimal value.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Fixed-price contract type shifts some cost risk to the contractor.
The contractor is based in Alabama, potentially supporting regional employment.

Sector Analysis

This contract falls within the "Military Armored Vehicle, Tank, and Tank Component Manufacturing" sector, a specialized segment of the broader industrial manufacturing industry. This sector is characterized by high technical requirements, stringent quality control, and often long production lead times. Spending in this area is driven by defense modernization efforts and operational readiness needs. Comparable spending benchmarks would involve other large-scale procurements of tactical vehicles, armored personnel carriers, and specialized trailers for military applications.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses stemming from a set-aside provision. The primary contractor, Fontaine Commercial Trailer, Inc., is likely a large business, and any subcontracting would be at their discretion to support production needs.

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 contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Tactical Wheeled Vehicles
Armored Vehicles
Military Logistics Support Equipment
Trailers and Transport Equipment
Department of the Army Procurements

Risk Flags

Potential for cost growth
Supply chain dependency
Performance specification adherence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.0 million to FONTAINE COMMERCIAL TRAILER, INC.. TO PROCURE 711 M871A3 TRAILERS WITH UID AND CARWELL.

Who is the contractor on this award?

The obligated recipient is FONTAINE COMMERCIAL TRAILER, 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 $26.0 million.

What is the period of performance?

Start: 2008-11-18. End: 2009-12-08.

What is the track record of Fontaine Commercial Trailer, Inc. with the Department of Defense?

Fontaine Commercial Trailer, Inc. has a history of supplying trailers to various government entities, including the Department of Defense. While this specific award is for M871A3 trailers, the company's broader experience likely encompasses a range of commercial and potentially specialized trailer types. Analyzing past performance on similar government contracts, including on-time delivery rates, quality compliance, and any history of contract disputes or modifications, would provide a clearer picture of their reliability. Without access to detailed historical contract performance data for Fontaine Commercial Trailer, Inc. specifically on military-grade equipment, a comprehensive assessment of their track record is limited to their general presence in the market and their ability to secure this significant award.

How does the per-unit cost of these trailers compare to similar military-grade equipment?

The per-unit cost of approximately $36,631 for the M871A3 trailers is a critical metric for value assessment. To benchmark this effectively, it needs to be compared against the procurement costs of other military trailers with similar specifications, such as payload capacity, armor level, mobility features (e.g., suspension, tire type), and specialized equipment integration. For instance, comparing it to standard commercial heavy-duty trailers would be misleading due to the military-grade requirements. Information on similar DoD procurements for specialized tactical trailers, potentially from different manufacturers or for different branches of service, would be necessary for a robust comparison. If this cost is significantly higher than comparable items, it could indicate potential issues with pricing or unique, costly features.

What are the primary risks associated with this contract award?

The primary risks associated with this contract include potential production delays if the contractor faces supply chain disruptions or manufacturing challenges, especially given the specialized nature of military equipment. There's also a risk related to cost if the firm-fixed-price contract did not fully anticipate all production complexities, potentially leading to contractor requests for equitable adjustments or future cost increases. Furthermore, the reliance on a single awardee for a specific quantity of these trailers introduces supply chain vulnerability; if Fontaine Commercial Trailer, Inc. encounters significant operational issues, the delivery schedule could be jeopardized. Finally, ensuring the trailers meet all stringent military specifications and performance requirements throughout the production and delivery phases is an ongoing risk.

How effective is the full and open competition process in ensuring value for this type of specialized equipment?

The full and open competition process is generally considered the most effective method for ensuring value, as it maximizes the pool of potential bidders and encourages competitive pricing. For specialized equipment like military trailers, this process allows the DoD to solicit bids from manufacturers with the specific capabilities and certifications required. The success of the competition in delivering value hinges on the clarity of the solicitation requirements, the realism of the technical specifications, and the number and capability of the bidders who respond. If the solicitation is well-defined and attracts multiple qualified bidders, it creates strong downward pressure on price while ensuring technical requirements are met. However, for highly niche or technologically advanced items, the pool of capable competitors might be limited, potentially reducing the competitive intensity.

What is the historical spending trend for similar military trailers by the Department of the Army?

Analyzing historical spending trends for similar military trailers by the Department of the Army is crucial for context. This involves examining past awards for tactical trailers, armored vehicles, and related logistical equipment over several fiscal years. Key metrics to review would include the average quantity procured, average per-unit costs, the number of bidders on similar contracts, and the primary contractors involved. Significant fluctuations in spending or per-unit costs could indicate changes in operational requirements, technological advancements, inflation, or shifts in procurement strategies. Understanding this historical context helps in evaluating whether the current $26 million award represents a typical investment, an increase, or a decrease in spending for such assets, and whether the pricing is consistent with past trends.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Berkshire Hathaway Inc. (UEI: 001024314)

Address: 3300 INDUSTRIAL DR, JASPER, AL, 35501

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $26,045,352

Exercised Options: $26,045,352

Current Obligation: $26,045,352

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS30F0018T

IDV Type: FSS

Timeline