DoD awards $18.76M to FCA for Israeli Jeep kits, raising competition concerns
Contract Overview
Contract Amount: $18,762,738 ($18.8M)
Contractor: FCA International Operations LLC
Awarding Agency: Department of Defense
Start Date: 2011-04-19
End Date: 2015-01-31
Contract Duration: 1,383 days
Daily Burn Rate: $13.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CHRYSLER JEEP J8 VEHICLE KITS (COMPLETELY KNOCKED DOWN), AND SPARE PARTS FOR THE GOVERNMENT OF ISRAEL. (FOREIGN MILITARY SALES)
Place of Performance
Location: AUBURN HILLS, OAKLAND County, MICHIGAN, 48326
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $18.8 million to FCA INTERNATIONAL OPERATIONS LLC for work described as: CHRYSLER JEEP J8 VEHICLE KITS (COMPLETELY KNOCKED DOWN), AND SPARE PARTS FOR THE GOVERNMENT OF ISRAEL. (FOREIGN MILITARY SALES) Key points: 1. Significant award for specialized military vehicle kits to a single supplier. 2. Lack of competition raises questions about price discovery and value for taxpayer funds. 3. Foreign Military Sales (FMS) context may influence procurement methods and oversight. 4. The contract duration of over three years suggests a substantial, ongoing need.
Value Assessment
Rating: questionable
The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal. Benchmarking against similar FMS contracts or domestic military vehicle procurements would be necessary for a thorough evaluation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a limited source procurement. This method bypasses competitive bidding, potentially leading to higher costs and reduced price discovery.
Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these vehicle kits, potentially leading to inefficient use of funds.
Public Impact
Supports a foreign military partner's defense capabilities. Impacts the light truck manufacturing sector, specifically for military applications. Highlights the complexities and potential cost implications of Foreign Military Sales.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing due to sole-source nature
- Limited transparency in pricing benchmarks
Positive Signals
- Supports a key ally's military needs
- Utilizes established manufacturing capabilities
Sector Analysis
This contract falls within the Light Truck and Utility Vehicle Manufacturing sector. Spending in this area for military applications can vary significantly based on geopolitical needs and technological advancements. Benchmarks are difficult without specific comparisons to similar FMS contracts.
Small Business Impact
The contract was awarded to FCA International Operations LLC, a large entity. There is no indication that small businesses were involved as prime contractors or significant subcontractors in this specific award.
Oversight & Accountability
The contract was awarded under the Department of Defense's Foreign Military Sales program. Oversight would typically involve both the DoD and the recipient government (Israel), with specific mechanisms for ensuring accountability and proper use of funds.
Related Government Programs
- Light Truck and Utility Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on cost justification
- Reliance on a single supplier for critical components
Tags
light-truck-and-utility-vehicle-manufact, department-of-defense, mi, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.8 million to FCA INTERNATIONAL OPERATIONS LLC. CHRYSLER JEEP J8 VEHICLE KITS (COMPLETELY KNOCKED DOWN), AND SPARE PARTS FOR THE GOVERNMENT OF ISRAEL. (FOREIGN MILITARY SALES)
Who is the contractor on this award?
The obligated recipient is FCA INTERNATIONAL OPERATIONS 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 $18.8 million.
What is the period of performance?
Start: 2011-04-19. End: 2015-01-31.
What is the justification for limiting competition on this contract?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION.' This suggests a sole-source or limited-source justification was likely used, possibly due to specific vehicle requirements, existing support infrastructure, or unique government-to-government agreements under the Foreign Military Sales program. Further investigation into the specific justification is needed.
How does the pricing compare to similar domestic military vehicle procurements?
Direct comparison is challenging without access to specific pricing data for similar domestic military vehicle kits and the exact specifications of the J8. However, the absence of competition generally leads to higher prices than those achieved through robust bidding processes. A detailed cost analysis or benchmarking against other FMS contracts for similar equipment would be required.
What is the long-term strategic value of supplying these vehicle kits to Israel?
Supplying these vehicle kits contributes to the defense capabilities of a key U.S. ally, Israel. This aligns with U.S. foreign policy and security objectives in the region. The specific strategic value is tied to Israel's operational needs and the role these vehicles play in their military strategy.
Industry Classification
NAICS: Manufacturing › Motor Vehicle Manufacturing › Light Truck and Utility Vehicle Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV11R0137
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1000 CHRYSLER DRIVE, AUBURN HILLS, MI, 48326
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $18,762,738
Exercised Options: $18,762,738
Current Obligation: $18,762,738
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-04-19
Current End Date: 2015-01-31
Potential End Date: 2015-01-31 12:01:00
Last Modified: 2016-01-14
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