DoD Awards $1.05 Billion for 2,082 HMMWVs and Parts to AM General LLC
Contract Overview
Contract Amount: $1,053,502,310 ($1.1B)
Contractor: AM General LLC
Awarding Agency: Department of Defense
Start Date: 2015-07-06
End Date: 2018-04-30
Contract Duration: 1,029 days
Daily Burn Rate: $1.0M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FOREIGN MILITARY SALES CONTRACT FOR 2,082 HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLES AND SPARE PARTS.
Place of Performance
Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $1.05 billion to AM GENERAL LLC for work described as: FOREIGN MILITARY SALES CONTRACT FOR 2,082 HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLES AND SPARE PARTS. Key points: 1. Significant investment in tactical vehicle fleet modernization. 2. Sole-source award to AM General LLC, a known manufacturer. 3. Potential for higher costs due to lack of competition. 4. Focus on military readiness and operational capability.
Value Assessment
Rating: fair
The contract value of $1.05 billion for 2,082 vehicles and parts suggests a per-unit cost of approximately $495,000. This price needs to be benchmarked against similar recent procurements of HMMWVs or comparable vehicles to assess value.
Cost Per Unit: $495,000 (estimated)
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to AM General LLC. The absence of competition limits price discovery and may result in less favorable pricing for the government.
Taxpayer Impact: Taxpayers may bear a higher cost due to the lack of competitive bidding, potentially impacting the overall efficiency of defense spending.
Public Impact
Enhances military mobility and logistical support capabilities. Supports U.S. foreign military sales objectives by providing essential equipment. Contributes to the readiness of allied forces. Sustains domestic manufacturing jobs in the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Long-term sustainment costs not detailed
Positive Signals
- Acquisition of critical military hardware
- Support for allied defense capabilities
- Established manufacturer with proven track record
Sector Analysis
This procurement falls within the Defense sector, specifically military vehicle manufacturing. Spending benchmarks for similar vehicle contracts are crucial for evaluating the cost-effectiveness of this sole-source award.
Small Business Impact
The data indicates this contract was awarded to AM General LLC, a large business. There is no explicit mention of small business participation or subcontracting goals within the provided details.
Oversight & Accountability
Oversight would typically involve contract performance monitoring by the Department of the Army to ensure timely delivery and adherence to specifications. The 'IN' status suggests the contract is in effect.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on justification for sole-source
- No clear indication of small business utilization
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, in, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.05 billion to AM GENERAL LLC. FOREIGN MILITARY SALES CONTRACT FOR 2,082 HIGH MOBILITY MULTIPURPOSE WHEELED VEHICLES AND SPARE PARTS.
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 $1.05 billion.
What is the period of performance?
Start: 2015-07-06. End: 2018-04-30.
What is the historical cost trend for HMMWVs procured under sole-source versus competitive contracts?
Historical data often shows that sole-source procurements tend to be more expensive than competitively awarded contracts for similar goods or services. This is due to the absence of market pressure to offer the lowest possible price. Analyzing past HMMWV procurements could quantify this difference and inform future acquisition strategies.
Are there any specific justifications documented for the sole-source award, such as unique capabilities or urgent need?
Sole-source awards typically require robust justification from the contracting agency, detailing why competition is not feasible or advantageous. This could include proprietary technology, unique manufacturing capabilities held by only one source, or an urgent and compelling need that precludes a lengthy competitive process. Without this documentation, the rationale for not competing remains unclear.
How does the per-unit cost compare to the original contract award price and subsequent modifications, if any?
Comparing the estimated per-unit cost to the initial award price is essential for tracking cost growth. If the initial contract was awarded at a significantly lower price per unit, it would raise concerns about cost overruns or scope creep. Analyzing contract modifications would reveal if changes in requirements or unforeseen issues have driven up the final cost.
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: W56HZV15R0173
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Macandrews & Forbes Holdings Inc. (UEI: 878304849)
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: $1,067,216,831
Exercised Options: $1,053,502,310
Current Obligation: $1,053,502,310
Contract Characteristics
Consolidated Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-07-06
Current End Date: 2018-04-30
Potential End Date: 2018-04-30 12:04:00
Last Modified: 2018-04-11
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