DoD Acquires 12 Abrams Tanks for $92M, Sole-Sourced from General Dynamics
Contract Overview
Contract Amount: $92,051,600 ($92.1M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2014-01-31
End Date: 2017-01-31
Contract Duration: 1,096 days
Daily Burn Rate: $84.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ACQUISITION OF 12 ABRAMS SEP (SYSTEM ENHANCED PACKAGE) V2 TANKS AND SUSTAINMENT OF THE INDUSTRIAL BASE
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $92.1 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: ACQUISITION OF 12 ABRAMS SEP (SYSTEM ENHANCED PACKAGE) V2 TANKS AND SUSTAINMENT OF THE INDUSTRIAL BASE Key points: 1. High cost for a limited number of vehicles. 2. Sole-source award raises concerns about price discovery. 3. Sustainment of industrial base is a stated objective. 4. No small business participation noted.
Value Assessment
Rating: questionable
The contract price of $92M for 12 tanks averages $7.67M per unit. This appears high compared to publicly available data for similar advanced armored vehicle acquisitions, especially given the sole-source nature of the award.
Cost Per Unit: $7.67M
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to General Dynamics Land Systems Inc. This lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The sole-source nature of this acquisition may result in taxpayers paying a premium for these tanks, as competitive pressures were absent.
Public Impact
Modernization of the Army's armored fleet. Potential for extended reliance on a single supplier. Impact on defense industrial base capacity and readiness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High per-unit cost
- No small business participation
Positive Signals
- Sustainment of industrial base
- Acquisition of advanced military hardware
Sector Analysis
This acquisition falls within the Defense sector, specifically military armored vehicle manufacturing. Spending benchmarks for complex defense systems like tanks can vary widely, but the lack of competition here makes direct comparison difficult.
Small Business Impact
The data indicates no small business participation in this contract. This is common for large, complex defense manufacturing contracts awarded to prime contractors like General Dynamics.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure fair pricing and value for taxpayer dollars. Further review of the justification for sole-sourcing would be beneficial.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- High per-unit cost requires further justification.
- Lack of small business involvement.
- Potential for vendor lock-in.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $92.1 million to GENERAL DYNAMICS LAND SYSTEMS INC.. ACQUISITION OF 12 ABRAMS SEP (SYSTEM ENHANCED PACKAGE) V2 TANKS AND SUSTAINMENT OF THE INDUSTRIAL BASE
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 $92.1 million.
What is the period of performance?
Start: 2014-01-31. End: 2017-01-31.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. Without specific documentation, it's unclear if other competitive strategies were explored. The absence of competition raises concerns about whether the government secured the best possible price and value for these advanced tanks.
How does the per-unit cost of these Abrams SEP V2 tanks compare to previous acquisitions or similar international procurements?
The average per-unit cost of approximately $7.67 million is substantial. A detailed comparison with historical Abrams purchases and international tank procurements, accounting for specific configurations and upgrades, is necessary to fully assess value. However, the sole-source nature suggests potential for inflated pricing compared to a competitive environment.
What are the long-term implications of sustaining the industrial base through sole-source contracts for critical defense systems?
While sustaining the industrial base is a valid objective, relying on sole-source contracts can stifle innovation and create vendor lock-in. It may also lead to higher costs over time. A balanced approach that includes competitive elements where feasible, alongside strategic sole-sourcing for unique capabilities, is often preferred for long-term cost-effectiveness and technological advancement.
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
Solicitation ID: W56HZV13R0482
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
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: $92,051,600
Exercised Options: $92,051,600
Current Obligation: $92,051,600
Subaward Activity
Number of Subawards: 405
Total Subaward Amount: $153,362,319
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-01-31
Current End Date: 2017-01-31
Potential End Date: 2017-01-31 12:01:00
Last Modified: 2021-02-24
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