DoD Awards $82.9M Undefinitized Contract to General Dynamics for M1A2 Tank Conversion
Contract Overview
Contract Amount: $82,860,241 ($82.9M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2016-12-16
End Date: 2019-03-29
Contract Duration: 833 days
Daily Burn Rate: $99.5K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: UNDEFINITIZED CONTRACT ACTION (LETTER CONTRACT) FOR CONVERSION OF 43 M1A2 TANKS TO THE M1A2S CONFIGURATION.
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $82.9 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: UNDEFINITIZED CONTRACT ACTION (LETTER CONTRACT) FOR CONVERSION OF 43 M1A2 TANKS TO THE M1A2S CONFIGURATION. Key points: 1. Significant investment in armored vehicle modernization. 2. Sole-source award raises questions about price discovery. 3. Potential for cost overruns due to undefinitized nature. 4. Focus on a critical defense capability.
Value Assessment
Rating: questionable
The contract is undefinitized, meaning final pricing is not yet established. This poses a risk for cost control and taxpayer value until definitization.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. Without competition, there is a reduced incentive for the contractor to offer the lowest possible price.
Taxpayer Impact: The lack of competition may lead to higher costs for taxpayers compared to a fully competed contract.
Public Impact
Enhances the combat readiness and survivability of the U.S. Army's main battle tanks. Supports the modernization of a key strategic asset in the defense inventory. Impacts the defense industrial base, particularly in armored vehicle manufacturing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Undefinitized contract action
- Sole-source award
- Lack of competition
- Potential for cost growth
Positive Signals
- Modernization of critical defense asset
- Supports armored vehicle manufacturing
Sector Analysis
This contract falls within the Defense sector, specifically military armored vehicle manufacturing. Spending benchmarks for such specialized, sole-source contracts can vary widely based on technological complexity and program duration.
Small Business Impact
The data indicates the prime contractor is General Dynamics Land Systems Inc., a large business. There is no information provided on subcontracting to small businesses for this specific action.
Oversight & Accountability
The undefinitized nature of the contract requires close oversight to ensure timely definitization and control of costs. Accountability will be key as the contract progresses towards its final terms.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Undefinitized Contract Action (UCA)
- Sole Source Award
- Lack of Competition
- Potential for Cost Overruns
- Limited Visibility on Final Price
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 $82.9 million to GENERAL DYNAMICS LAND SYSTEMS INC.. UNDEFINITIZED CONTRACT ACTION (LETTER CONTRACT) FOR CONVERSION OF 43 M1A2 TANKS TO THE M1A2S CONFIGURATION.
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 $82.9 million.
What is the period of performance?
Start: 2016-12-16. End: 2019-03-29.
What is the projected final cost of the M1A2S conversion, and how does it compare to the initial estimated value?
The initial value is $82.9 million, but as an undefinitized contract, the final cost is not yet fixed. A thorough review of the definitization process and the contractor's cost proposals will be necessary to determine the final price and assess its reasonableness against industry benchmarks and the scope of work.
What are the specific risks associated with an undefinitized contract action for this tank conversion?
The primary risks include potential cost growth beyond the initial estimate, delays in definitization leading to uncertainty, and a reduced ability to ensure fair and reasonable pricing without upfront competition. There's also a risk that the contractor may not be incentivized to control costs as effectively as they would under a fixed-price, competed contract.
How will the effectiveness of the M1A2S configuration upgrade be measured and ensured?
Effectiveness will be measured through rigorous testing, operational evaluations, and performance metrics defined in the contract's technical requirements. Ensuring effectiveness relies on clear specifications, quality assurance processes during conversion, and post-delivery performance assessments to confirm the upgraded tanks meet or exceed the intended combat capabilities.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV17R0001
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $82,860,241
Exercised Options: $82,860,241
Current Obligation: $82,860,241
Subaward Activity
Number of Subawards: 695
Total Subaward Amount: $173,831,050
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-12-16
Current End Date: 2019-03-29
Potential End Date: 2019-03-29 12:03:00
Last Modified: 2022-02-09
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