Army Spends $87.4M for 6 First-of-Type Abrams Tanks from General Dynamics
Contract Overview
Contract Amount: $87,406,755 ($87.4M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2015-12-11
End Date: 2020-02-28
Contract Duration: 1,540 days
Daily Burn Rate: $56.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: ACQUISITION OF 6, FIRST OF TYPE, ABRAMS M1A2 SEP V3 TANKS
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $87.4 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: ACQUISITION OF 6, FIRST OF TYPE, ABRAMS M1A2 SEP V3 TANKS Key points: 1. High cost for initial units of a new variant. 2. Sole-source award to incumbent, limiting price competition. 3. Significant taxpayer investment in advanced armored vehicle technology. 4. Potential for cost overruns in early production phases.
Value Assessment
Rating: questionable
The $14.57M per-unit cost for these first-of-type tanks is high, reflecting initial development and setup expenses. Without comparable recent contracts for this specific variant, a precise benchmark is difficult, but it warrants scrutiny.
Cost Per Unit: $14,570,000
Competition Analysis
Competition Level: sole-source
The contract was not competed, likely due to the specialized nature of the M1A2 SEP V3 variant and the existing relationship with General Dynamics. This lack of competition limits price discovery and potentially increases costs.
Taxpayer Impact: Taxpayers are funding the acquisition of advanced military hardware with limited competitive pressure on pricing, potentially leading to higher overall expenditures.
Public Impact
Enhances Army's armored combat capabilities with advanced technology. Supports a major defense contractor and its supply chain. Represents a significant investment in national defense infrastructure. Potential for future upgrades and sustainment contracts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High initial unit cost
- First-of-type acquisition
- Lack of competition
Positive Signals
- Acquisition of advanced military hardware
- Supports domestic manufacturing
Sector Analysis
The defense sector, particularly armored vehicle manufacturing, involves high R&D costs and specialized production. Spending benchmarks for new variants are often high due to initial setup and limited production runs.
Small Business Impact
No direct indication of small business participation in this specific contract award. Large prime contractors like General Dynamics often subcontract, but the extent of SMB involvement is not detailed here.
Oversight & Accountability
The contract was awarded by the Department of the Army. Oversight would focus on contract performance, cost tracking, and ensuring delivery of specified capabilities within the fixed-price incentive framework.
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 competition.
- High initial unit cost for first-of-type vehicles.
- Potential for cost growth in fixed-price incentive contracts.
- Dependency on a single contractor for specialized manufacturing.
- Long-term sustainment costs not detailed.
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 $87.4 million to GENERAL DYNAMICS LAND SYSTEMS INC.. ACQUISITION OF 6, FIRST OF TYPE, ABRAMS M1A2 SEP V3 TANKS
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 $87.4 million.
What is the period of performance?
Start: 2015-12-11. End: 2020-02-28.
What is the projected total cost for the M1A2 SEP V3 program, and how does this initial acquisition compare to future production runs?
The total program cost for the M1A2 SEP V3 is not fully detailed in this data. However, initial 'first-of-type' acquisitions are typically more expensive per unit due to non-recurring engineering, setup, and initial production inefficiencies. Future production runs, especially if competed or scaled up, are expected to have lower per-unit costs as efficiencies are realized and fixed costs are spread over more units.
What are the specific technological advancements in the M1A2 SEP V3 that justify the high initial investment?
The M1A2 SEP V3 incorporates significant upgrades over previous versions, including improved power generation and distribution, an ammunition data link for advanced munitions, enhanced fire control systems, and upgraded networking capabilities. These advancements aim to increase lethality, survivability, and situational awareness on the modern battlefield, justifying the investment in next-generation armored protection.
What is the long-term sustainment and upgrade strategy for these tanks, and what are the associated cost implications?
The long-term sustainment strategy for the M1A2 SEP V3 involves ongoing maintenance, repair, and eventual upgrades to maintain operational readiness and technological relevance. Associated costs will include spare parts, depot-level maintenance, technical support, and future modernization programs. These sustainment costs often exceed the initial acquisition cost over the vehicle's lifecycle.
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: W56HZV15R0165
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $87,406,755
Exercised Options: $87,406,755
Current Obligation: $87,406,755
Subaward Activity
Number of Subawards: 454
Total Subaward Amount: $149,910,223
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-12-11
Current End Date: 2020-02-28
Potential End Date: 2020-02-28 12:02:00
Last Modified: 2022-08-25
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