DoD Spends $392M on Abrams Tank R&D with General Dynamics, Lacking Competition
Contract Overview
Contract Amount: $392,073,891 ($392.1M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2012-09-14
End Date: 2021-09-30
Contract Duration: 3,303 days
Daily Burn Rate: $118.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IGF::OT::IGF R&D FOR ECP 1 ABRAMS TANK
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $392.1 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: IGF::OT::IGF R&D FOR ECP 1 ABRAMS TANK Key points: 1. Significant R&D investment in a key defense platform. 2. Sole-source award to General Dynamics raises competition concerns. 3. Long contract duration (3303 days) may impact cost-effectiveness. 4. High value contract warrants close scrutiny of R&D outcomes.
Value Assessment
Rating: questionable
The contract value of $392M for R&D is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar R&D efforts for armored vehicles. The cost-plus incentive fee structure aims to control costs, but initial pricing is unverified.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition on a nearly $400M contract likely results in a higher cost to taxpayers than a competed procurement would have.
Public Impact
Modernization of a critical military asset, the Abrams tank. Potential for technological advancements in armored vehicle capabilities. Impacts the defense industrial base and employment in Michigan.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
- Long duration
Positive Signals
- Investment in critical defense technology
- Potential for innovation
Sector Analysis
This contract falls within the Defense sector, specifically focusing on armored vehicle manufacturing and R&D. Spending benchmarks for R&D in this specialized area are difficult to ascertain due to proprietary nature and limited public data.
Small Business Impact
The contract was awarded to General Dynamics Land Systems Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific R&D effort.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, oversees this contract. The sole-source nature suggests a specific justification was provided, which should be subject to rigorous review to ensure necessity and fair pricing.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns due to sole-source nature
- Long contract duration may indicate inefficiencies
- Limited transparency on R&D outcomes
- No small business participation noted
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $392.1 million to GENERAL DYNAMICS LAND SYSTEMS INC.. IGF::OT::IGF R&D FOR ECP 1 ABRAMS TANK
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $392.1 million.
What is the period of performance?
Start: 2012-09-14. End: 2021-09-30.
What specific R&D advancements were achieved with this $392M investment, and how do they enhance Abrams tank capabilities?
The contract aimed to fund research and development for the ECP 1 Abrams Tank. Specific advancements would likely include improvements in lethality, mobility, protection, and network integration. These R&D efforts are crucial for maintaining the Abrams' technological edge against evolving threats and ensuring its continued relevance on the battlefield.
What was the justification for awarding this significant R&D contract on a sole-source basis, and were alternative solutions considered?
Sole-source awards typically require a strong justification, such as unique capabilities possessed only by the contractor or urgent needs that preclude competition. For General Dynamics and the Abrams platform, this could stem from proprietary knowledge, existing infrastructure, or specific integration requirements. A thorough review of the justification is necessary to confirm no viable alternatives were overlooked.
How effectively did the Cost Plus Incentive Fee (CPIF) structure manage costs and incentivize desired R&D outcomes over the contract's duration?
The CPIF structure aims to align contractor and government interests by setting target costs and fee percentages, with adjustments based on actual costs and performance. Evaluating its effectiveness requires analyzing the final costs against targets, the achieved performance metrics, and any modifications or disputes during the contract's long lifecycle. This data is often sensitive.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV12R0201
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp
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: $814,070,991
Exercised Options: $392,073,891
Current Obligation: $392,073,891
Subaward Activity
Number of Subawards: 544
Total Subaward Amount: $156,347,901
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-09-14
Current End Date: 2021-09-30
Potential End Date: 2021-09-30 00:00:00
Last Modified: 2022-06-29
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