DoD Awards $213M Contract to General Dynamics for Saudi M1A2 Tank Modernization
Contract Overview
Contract Amount: $21,320,973 ($21.3M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2009-12-31
End Date: 2015-01-31
Contract Duration: 1,857 days
Daily Burn Rate: $11.5K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Defense
Official Description: FACILITIZATION EFFORT FOR THE MODERNIZATION OF M1A2 TANKS FOR THE KINGDOM OF SAUDI ARABIA.
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $21.3 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: FACILITIZATION EFFORT FOR THE MODERNIZATION OF M1A2 TANKS FOR THE KINGDOM OF SAUDI ARABIA. Key points: 1. Contract awarded to a single, established defense contractor, General Dynamics Land Systems. 2. Significant value of $213.2 million for tank modernization services. 3. Potential risk associated with foreign military sales and complex defense systems. 4. Spending falls within the Engineering Services sector, supporting defense modernization efforts.
Value Assessment
Rating: questionable
The contract type is Cost No Fee, which offers limited incentive for cost control. The award value is substantial, but without a competitive bid, it's difficult to assess if the pricing is optimal compared to similar international defense modernization efforts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a limited source selection. This likely impacts price discovery as there was no bidding process to drive down costs or ensure the most economical solution was chosen.
Taxpayer Impact: Taxpayer funds are being used for a foreign military sale, which may not directly benefit domestic defense readiness or infrastructure, though it supports allied capabilities.
Public Impact
Supports modernization of military equipment for an allied nation, potentially enhancing regional stability. Funds advanced engineering and technical services for complex defense systems. The contract involves technology transfer and sustainment considerations for foreign military assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-reimbursement contract type
- Foreign military sale implications
Positive Signals
- Supports allied defense capabilities
- Utilizes established defense contractor expertise
Sector Analysis
This contract falls under Engineering Services (NAICS 541330), a sector crucial for defense procurement. Spending benchmarks for similar foreign military sales of tank modernization are not readily available, but $213 million represents a significant investment.
Small Business Impact
The contract was awarded to General Dynamics Land Systems Inc., a large prime contractor. There is no indication that small businesses were involved in this specific award, suggesting limited opportunities for SMB participation.
Oversight & Accountability
Oversight is managed by the Department of the Army. The Cost No Fee structure requires careful monitoring to ensure efficient use of funds and prevent cost overruns, despite the absence of a fee.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Cost No Fee contract type
- Foreign military sale complexity
- Potential for cost overruns
- Limited transparency on pricing benchmarks
Tags
engineering-services, department-of-defense, mi, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.3 million to GENERAL DYNAMICS LAND SYSTEMS INC.. FACILITIZATION EFFORT FOR THE MODERNIZATION OF M1A2 TANKS FOR THE KINGDOM OF SAUDI ARABIA.
Who is the contractor on this award?
The obligated recipient is GENERAL DYNAMICS LAND SYSTEMS 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 $21.3 million.
What is the period of performance?
Start: 2009-12-31. End: 2015-01-31.
What is the specific value proposition for the US taxpayer in funding the modernization of Saudi Arabian tanks?
The primary value proposition for US taxpayers lies in strengthening a key regional ally's defense capabilities, which can contribute to stability and counter shared security threats. This can indirectly benefit US interests by reducing the need for direct US military intervention and fostering interoperability with allied forces.
What are the primary risks associated with this limited-competition, foreign military sale contract?
Key risks include potential cost inefficiencies due to the lack of competition and the Cost No Fee structure. There are also geopolitical risks associated with military sales, potential for technology proliferation, and ensuring long-term sustainment and support align with US foreign policy objectives.
How effective is the Cost No Fee contract type in ensuring the successful modernization of complex military hardware like the M1A2 tanks?
The Cost No Fee structure can be effective for complex projects where cost is difficult to estimate upfront, allowing flexibility. However, it offers minimal incentive for the contractor to control costs, necessitating robust government oversight to ensure efficiency and prevent potential overspending.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Address: 38500 MOUND RD, STERLING HEIGHTS, MI, 48310
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $21,320,973
Exercised Options: $21,320,973
Current Obligation: $21,320,973
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-12-31
Current End Date: 2015-01-31
Potential End Date: 2015-01-31 12:01:00
Last Modified: 2024-09-04
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