DoD's $27.9M HMMWV Technical Support Contract Awarded to AM General LLC Raises Competition Concerns

Contract Overview

Contract Amount: $27,877,554 ($27.9M)

Contractor: AM General LLC

Awarding Agency: Department of Defense

Start Date: 2014-04-10

End Date: 2019-08-31

Contract Duration: 1,969 days

Daily Burn Rate: $14.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF SYSTEM TECHNICAL SUPPORT (STS) SERVICES FOR THE HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLE (HMMWV) FAMILY OF VEHICLES.

Place of Performance

Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $27.9 million to AM GENERAL LLC for work described as: IGF::OT::IGF SYSTEM TECHNICAL SUPPORT (STS) SERVICES FOR THE HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLE (HMMWV) FAMILY OF VEHICLES. Key points: 1. Contract awarded to incumbent AM General LLC for HMMWV technical support. 2. Significant contract value of $27.9M over 5 years. 3. Lack of competition raises questions about price discovery and value for money. 4. Engineering services sector, with potential for specialized knowledge transfer.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without competitive bids, it's hard to determine if the $27.9M represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to AM General LLC. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.

Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for these essential technical support services.

Public Impact

Taxpayers may be overpaying for HMMWV technical support due to lack of competition. Dependence on a single contractor for critical vehicle support could pose long-term risks. The Army's reliance on AM General for specialized HMMWV knowledge is solidified.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Cost-plus contract type

Positive Signals

Incumbent contractor expertise
Long-term vehicle support established

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting a major defense platform. Spending benchmarks for similar specialized vehicle support contracts can vary widely based on complexity and duration.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a large, established company like AM General suggests limited opportunities for small business participation.

Oversight & Accountability

The 'IN' status suggests the contract is in effect. Oversight would focus on ensuring AM General meets the terms of the Cost Plus Fixed Fee agreement and that costs are reasonable and allocable, especially given the lack of competition.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competitive bidding
Potential for inflated costs
Contractor lock-in
Limited transparency in pricing
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to AM GENERAL LLC. IGF::OT::IGF SYSTEM TECHNICAL SUPPORT (STS) SERVICES FOR THE HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLE (HMMWV) FAMILY OF VEHICLES.

Who is the contractor on this award?

The obligated recipient is AM GENERAL 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 $27.9 million.

What is the period of performance?

Start: 2014-04-10. End: 2019-08-31.

What was the justification for awarding this contract sole-source to AM General LLC, and were alternative solutions considered?

The provided data indicates the contract was 'NOT COMPETED.' A sole-source award typically requires a justification, such as the unique capabilities of the contractor or the urgency of the requirement. Without this justification, it's difficult to assess if the government adequately explored options to foster competition or ensure the best value was obtained.

How does the cost-plus fixed fee structure impact the government's ability to control costs on this sole-source contract?

Cost-plus fixed fee contracts can be risky when awarded without competition. While the 'fixed fee' provides some cost certainty for the contractor's profit, the 'cost-plus' element means the government bears the risk of cost overruns. Without competitive pressure, there's less incentive for the contractor to minimize costs, potentially leading to higher overall expenditures for the government.

What are the long-term implications of relying on a single contractor for specialized technical support of the HMMWV fleet?

Long-term reliance on a single contractor can create vendor lock-in and reduce the government's flexibility. It may also stifle innovation if the incumbent contractor faces no competitive pressure to improve services or technology. Furthermore, if AM General were to experience financial difficulties or strategic shifts, the support for the HMMWV fleet could be jeopardized.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV14R0034

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: KPS Capital Partners, LP

Address: 105 N NILES AVE, SOUTH BEND, IN, 46617

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $49,941,334

Exercised Options: $27,877,554

Current Obligation: $27,877,554

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline