DoD's $39.8M M1200 Armored Knight contract awarded to DRS Sust. Systems, Inc. with no competition

Contract Overview

Contract Amount: $39,807,041 ($39.8M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2010-07-30

End Date: 2012-09-30

Contract Duration: 793 days

Daily Burn Rate: $50.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M1200 ARMORED KNIGHT

Place of Performance

Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63121

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $39.8 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: M1200 ARMORED KNIGHT Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. Limited competition may have led to higher costs compared to a more open bidding process. 3. The contract duration of 793 days suggests a significant, ongoing need for these specialized military vehicles. 4. Performance context is limited due to the lack of competitive benchmarking. 5. Sector positioning within Military Armored Vehicle manufacturing is noted, but specific market share is not detailed. 6. Risk indicators are elevated due to the sole-source nature and lack of transparency in pricing. 7. The contract's value, while substantial, needs to be assessed against potential alternatives or previous procurements.

Value Assessment

Rating: questionable

The contract's value of $39.8 million for M1200 Armored Knight vehicles lacks a clear benchmark due to its sole-source nature. Without competitive bids, it is difficult to definitively assess if the pricing represents fair market value. Comparisons to similar armored vehicle procurements by the Department of Defense or other allied nations would be necessary to provide a more robust value-for-money assessment. The absence of competition inherently limits the ability to determine if taxpayers received the best possible price for these specialized assets.

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. The Department of the Army identified DRS Sust. Systems, Inc. as the only source capable of fulfilling the requirement. This lack of competition limits the opportunity for price discovery and may result in less favorable pricing for the government compared to a fully competed procurement. The rationale for sole-source award, such as unique capabilities or urgent need, would need further examination to understand the full context.

Taxpayer Impact: The absence of competition means taxpayers may not have benefited from the cost savings typically achieved through a bidding process. This could translate to a higher overall expenditure for the M1200 Armored Knight vehicles than if multiple companies had vied for the contract.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize the M1200 Armored Knight vehicles for their intended military operations. The contract delivers specialized armored vehicles crucial for specific combat or support roles within the Army's fleet. Geographic impact is primarily within military operational theaters where these vehicles are deployed. Workforce implications include employment at DRS Sust. Systems, Inc. and its supply chain, contributing to the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process makes it difficult to assess true value for money.
Dependence on a single contractor for specialized equipment can create supply chain risks.
The contract's fixed-price nature, while generally preferred, does not mitigate risks associated with sole-source procurement.

Positive Signals

Award to an established contractor (DRS Sust. Systems, Inc.) suggests potential for reliable delivery.
The contract addresses a specific military requirement, indicating a focused and potentially critical need.
Fixed-price contract type can provide cost certainty for the government, assuming the initial price is fair.

Sector Analysis

The defense sector for military vehicles is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Contracts like this for specialized armored vehicles are critical for maintaining military readiness and technological superiority. The market is often dominated by a few large prime contractors and their extensive supply chains. Benchmarking this contract's value would ideally involve comparing it to other procurements of similar vehicle types or upgrades within the defense industrial base, considering factors like technological sophistication and production volume.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that small businesses were not specifically targeted for this procurement, either as prime contractors or through mandated subcontracting goals. The implications for the small business ecosystem are that opportunities related to this specific contract may be limited unless DRS Sust. Systems, Inc. voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including delivery schedules and performance specifications. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance or closeout.

Related Government Programs

M1 Abrams Tank
Armored Personnel Carriers
Military Vehicle Manufacturing
Defense Procurement
Tactical Vehicles

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.8 million to DRS SUSTAINMENT SYSTEMS, INC. M1200 ARMORED KNIGHT

Who is the contractor on this award?

The obligated recipient is DRS SUSTAINMENT 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 $39.8 million.

What is the period of performance?

Start: 2010-07-30. End: 2012-09-30.

What is the specific military role and capabilities of the M1200 Armored Knight vehicle?

The M1200 Armored Knight is a specialized armored vehicle designed for specific military roles, often related to reconnaissance, command and control, or support functions within armored formations. Its exact capabilities would depend on its configuration, but generally, it provides enhanced protection for its occupants against battlefield threats compared to unarmored vehicles. It is part of the broader family of military vehicles that support ground operations, offering a balance of mobility, protection, and firepower tailored to its intended mission. Understanding its specific function is key to assessing the necessity and value of its procurement.

Why was this contract awarded on a sole-source basis, and what was the justification?

The provided data indicates the contract was awarded on a sole-source basis ('ct': 'NOT COMPETED'). The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source justifications are based on factors such as the unique capabilities of a single contractor, the urgency of the requirement where only one source can meet it in time, or if the procurement is for follow-on work to a previously competed contract where the original contractor possesses unique knowledge or tooling. A thorough review of the contract file or justification and approval (J&A) document would be necessary to understand the official rationale provided by the Department of the Army.

How does the contract value of approximately $39.8 million compare to similar armored vehicle procurements?

Direct comparison of the $39.8 million contract value for the M1200 Armored Knight is challenging without more specific details on the number of units procured and their exact specifications. However, armored vehicle procurements can range widely in cost. For instance, new main battle tanks can cost several million dollars each, while less heavily armored vehicles or specialized variants might fall into the hundreds of thousands to low millions per unit. Given this contract is for 'M1200 ARMORED KNIGHT', it suggests a specialized platform. If this value represents a significant number of vehicles or a complex variant, it might be within the expected range for specialized defense equipment. However, the lack of competition makes a definitive value assessment difficult.

What is the track record of DRS Sust. Systems, Inc. in delivering similar military vehicles?

DRS Sust. Systems, Inc. (now part of Leonardo DRS) has a significant track record in the defense sector, providing a wide range of systems and components for military platforms. They are known for their work on various armored vehicles, including upgrades and sustainment for platforms like the Abrams tank, as well as providing specialized electronic and optical systems. Their involvement in the M1200 Armored Knight program suggests they possess the necessary technical expertise and manufacturing capabilities for this type of specialized armored vehicle. Past performance data, if available through government databases like the Contractor Performance Assessment Reporting System (CPARS), would offer more granular insights into their delivery history for similar contracts.

What are the potential risks associated with a sole-source contract for military hardware?

Sole-source contracts for military hardware carry several potential risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, resulting in less value for taxpayer money. Secondly, it can reduce the incentive for the contractor to innovate or improve efficiency, as they face less pressure from potential competitors. Thirdly, it can create a dependency on a single supplier, making the government vulnerable if that supplier experiences financial difficulties, production issues, or decides to exit the market. Finally, sole-source awards can sometimes raise concerns about fairness and transparency in the procurement process.

What is the historical spending pattern for the M1200 Armored Knight or similar vehicles by the Department of the Army?

Historical spending patterns for the M1200 Armored Knight specifically are not detailed in the provided data. However, the Department of the Army consistently invests significant funds in armored vehicle procurement and sustainment. Spending on similar platforms, such as Abrams tanks, Bradley Fighting Vehicles, and various armored personnel carriers, runs into billions of dollars over multi-year periods. The 'M1200 ARMORED KNIGHT' designation suggests it might be a specific variant or a niche capability within the broader armored vehicle portfolio. Analyzing historical budgets for armored vehicle programs and tracking specific contract awards for similar systems would reveal trends in investment and the typical scale of such procurements.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 201 EVANS LN, SAINT LOUIS, MO, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $39,807,041

Exercised Options: $39,807,041

Current Obligation: $39,807,041

Contract Characteristics

Cost or Pricing Data: YES

Timeline