DoD awards $25.5M for MRAP MaxxPro hardware kits, raising questions on value and competition

Contract Overview

Contract Amount: $25,476,031 ($25.5M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2015-02-02

End Date: 2016-07-31

Contract Duration: 545 days

Daily Burn Rate: $46.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF EIGHT MRAP MAXXPRO HARDWARE KITS TO SUPPORT UPGRADE/RESET ACTIVITIES TO THE MAXXPRO DASH AND MAXXPRO LWB AMBULANCE.

Place of Performance

Location: LISLE, DUPAGE County, ILLINOIS, 60532

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to ND DEFENSE LLC for work described as: PROCUREMENT OF EIGHT MRAP MAXXPRO HARDWARE KITS TO SUPPORT UPGRADE/RESET ACTIVITIES TO THE MAXXPRO DASH AND MAXXPRO LWB AMBULANCE. Key points: 1. The contract's value appears high relative to the number of units procured, suggesting potential for cost efficiencies. 2. Full and open competition was utilized, but the limited number of bidders warrants further investigation into market dynamics. 3. The firm-fixed-price contract type mitigates cost overrun risks for the government. 4. This procurement supports critical upgrade and reset activities for existing MRAP vehicles, maintaining operational readiness. 5. The contractor, ND Defense LLC, has a history of government contracts, requiring a review of past performance. 6. The contract duration of 545 days is reasonable for the scope of hardware kit delivery and integration.

Value Assessment

Rating: fair

The total award of $25.5 million for eight hardware kits averages over $3.1 million per kit. While specific component costs are not detailed, this figure seems substantial when compared to the initial acquisition cost of MRAP vehicles themselves. Benchmarking against similar upgrade kits or component procurements for armored vehicles would be necessary to definitively assess value for money. The firm-fixed-price nature provides cost certainty, but the high per-unit cost warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the specific number of bids received is not detailed in the provided data. A low number of bids, even under full and open competition, could suggest barriers to entry or a concentrated market, potentially impacting price discovery and overall value.

Taxpayer Impact: While full and open competition is generally favorable for taxpayers by encouraging a wider range of offers, the ultimate benefit depends on the number of responsive bids received and the resulting pricing.

Public Impact

The primary beneficiaries are the U.S. Army units operating MRAP MaxxPro vehicles, ensuring their continued operational capability. The services delivered include the provision of hardware kits essential for upgrading and resetting the MaxxPro fleet. The geographic impact is national, supporting military readiness across various operational theaters. Workforce implications may include specialized technical roles for installation and integration of the hardware kits.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost for hardware kits requires further justification.
Limited competition, even if full and open, may indicate market concentration.
The specific components within the 'hardware kits' are not detailed, hindering a granular cost analysis.

Positive Signals

Firm-fixed-price contract type limits government financial risk.
Procurement supports critical vehicle sustainment and upgrade activities.
Full and open competition was utilized, adhering to federal acquisition principles.

Sector Analysis

This contract falls within the "Military Armored Vehicle, Tank, and Tank Component Manufacturing" sector, a specialized segment of the broader defense industrial base. The market is characterized by high barriers to entry due to technical expertise, security clearances, and established relationships with government agencies. Spending in this sector is driven by military modernization, sustainment, and operational readiness requirements. Comparable spending benchmarks would involve analyzing other contracts for vehicle upgrades, component replacements, or reset activities for similar armored platforms.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from set-aside provisions. The prime contractor, ND Defense LLC, would determine any subcontracting opportunities based on their own business strategy and capabilities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified hardware kits. Transparency is facilitated through federal procurement databases like FPDS-NG, where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

MRAP Vehicle Program
Mine-Resistant Ambush Protected Vehicles
Vehicle Reset Programs
Defense Logistics Agency (DLA) Procurement

Risk Flags

High Per-Unit Cost
Potential for Limited Competition
Lack of Detailed Component Breakdown

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to ND DEFENSE LLC. PROCUREMENT OF EIGHT MRAP MAXXPRO HARDWARE KITS TO SUPPORT UPGRADE/RESET ACTIVITIES TO THE MAXXPRO DASH AND MAXXPRO LWB AMBULANCE.

Who is the contractor on this award?

The obligated recipient is ND DEFENSE 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 $25.5 million.

What is the period of performance?

Start: 2015-02-02. End: 2016-07-31.

What is the track record of ND Defense LLC with Department of Defense contracts, particularly for vehicle components or upgrades?

ND Defense LLC has a history of receiving government contracts, primarily from the Department of Defense. While the provided data is limited, a deeper dive into contract databases would reveal the extent and nature of their past performance. Analyzing previous awards, including their value, scope, and timeliness of delivery, is crucial for assessing their capability and reliability in fulfilling this current contract. Specific attention should be paid to any contracts involving MRAP vehicles or similar armored platforms to gauge relevant experience. Past performance evaluations, if available, would offer direct insights into their execution quality and adherence to contract terms, informing the risk assessment for this procurement.

How does the per-unit cost of these MRAP MaxxPro hardware kits compare to similar upgrade or reset kits for other armored vehicles?

The average cost per kit in this $25.5 million award for eight units is approximately $3.18 million. Without specific details on the components included in these 'hardware kits,' a direct comparison is challenging. However, this figure appears high when considering the initial acquisition costs of many MRAP variants. To benchmark effectively, one would need to research contracts for upgrade kits, component replacements, or sustainment packages for other armored platforms like the JLTV, Stryker, or Abrams tanks. Factors such as technological complexity, the criticality of the upgrade, and the volume of the procurement significantly influence per-unit costs. A thorough analysis would involve identifying comparable procurements and adjusting for differences in scope and technology to determine if this pricing is within a reasonable market range.

What are the specific risks associated with the 'upgrade/reset activities' for the MRAP MaxxPro, and how does this contract mitigate them?

The primary risks associated with 'upgrade/reset activities' for the MRAP MaxxPro fleet often involve technical obsolescence, integration challenges, and the potential for schedule delays impacting operational readiness. The 'hardware kits' procured likely address specific deficiencies or incorporate new technologies to enhance survivability or functionality. This contract mitigates some risks through its firm-fixed-price (FFP) structure, which caps the government's financial exposure. However, risks related to the technical execution of the upgrades and the integration of these kits into the existing vehicle fleet remain. The government's mitigation strategy would also rely on ND Defense LLC's technical expertise, adherence to specifications, and timely delivery, as well as the Army's own program management and quality assurance oversight during the installation and testing phases.

Given the $25.5 million award, what is the historical spending trend for MRAP MaxxPro sustainment and upgrades by the Department of Defense?

Historical spending on MRAP MaxxPro sustainment and upgrades by the Department of Defense has been significant, particularly following their widespread deployment in the mid-to-late 2000s and early 2010s. While this specific $25.5 million award represents a discrete procurement, it is part of a larger, ongoing effort to maintain and modernize the MRAP fleet. Analyzing historical data from sources like the Federal Procurement Data System (FPDS) would reveal trends in annual spending, the types of sustainment activities (e.g., reset, component replacement, armor upgrades), and the primary contractors involved. Understanding these patterns helps contextualize the current award, assess whether spending is increasing or decreasing, and identify potential areas of recurring need or evolving requirements for the MRAP platform.

What does the 'MAXXPRO DASH' and 'MAXXPRO LWB AMBULANCE' designation imply about the specific upgrades being performed?

The designations 'MAXXPRO DASH' (Direct Ambulance Casualty-evacuation Support) and 'MAXXPRO LWB AMBULANCE' (Long Wheelbase Ambulance) indicate that these hardware kits are specifically intended for the ambulance variants of the MRAP MaxxPro platform. The 'DASH' designation suggests upgrades focused on enhancing the vehicle's capability as a battlefield ambulance, potentially including improved medical equipment integration, enhanced crew protection during casualty evacuation, or better communication systems. The 'LWB AMBULANCE' points to modifications for the longer wheelbase version, possibly optimizing space for medical personnel and equipment. These upgrades aim to improve the survivability and effectiveness of medical evacuation platforms in theater, ensuring better care for wounded personnel.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W56HZV14R0337

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navistar International Corporation (UEI: 161984646)

Address: 2701 NAVISTAR WAY, LISLE, IL, 60532

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,476,031

Exercised Options: $25,476,031

Current Obligation: $25,476,031

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $19,797,868

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline