Department of Defense awards $32.6M contract for armored vehicle production, with limited competition

Contract Overview

Contract Amount: $32,611,908 ($32.6M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2017-02-16

End Date: 2018-11-30

Contract Duration: 652 days

Daily Burn Rate: $50.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PK-WAW MAXXPRO PRODUCTION CONTRACT FOR PAKISTAN

Place of Performance

Location: LISLE, DUPAGE County, ILLINOIS, 60532

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $32.6 million to ND DEFENSE LLC for work described as: PK-WAW MAXXPRO PRODUCTION CONTRACT FOR PAKISTAN Key points: 1. Contract awarded for armored vehicle production, indicating a need for specialized military equipment. 2. The award was not competed, raising questions about potential price discovery and value for money. 3. Limited competition suggests potential risks related to contractor lock-in and reduced innovation. 4. The contract duration of 652 days points to a medium-term production requirement. 5. The firm fixed-price contract type aims to control costs, but the lack of competition may offset this benefit. 6. The geographic location of the contractor (Illinois) may have implications for supply chain logistics.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable contract data for the specific 'PK-WAW MAXXPRO PRODUCTION CONTRACT FOR PAKISTAN'. However, the absence of competition inherently limits the ability to assess if the pricing reflects a competitive market. Without multiple bids, it's difficult to determine if the $32.6 million represents a fair market price or if taxpayers could have secured a better deal through a more open bidding process. The firm fixed-price nature provides some cost certainty, but the overall value proposition is weakened by the limited competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source or not available for competition basis, meaning that only one source was considered or solicited. The specific justification for this limited competition is not detailed in the provided data. Typically, sole-source awards occur when only one contractor possesses the unique capability, technology, or intellectual property required for the procurement. The lack of a competitive bidding process means that potential cost savings and a wider range of solutions that might arise from multiple bidders were not explored.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution. Without a bidding war, the government may have paid a premium for the goods or services, as the contractor faced no pressure to lower their price to win the contract.

Public Impact

The primary beneficiaries are the Department of Defense and potentially allied forces (Pakistan) receiving specialized armored vehicles. The contract delivers essential military hardware, contributing to national security and defense capabilities. The geographic impact is primarily related to the production facilities in Illinois and the eventual deployment of the vehicles. Workforce implications include employment opportunities for skilled labor in manufacturing and defense industries within Illinois.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Sole-source awards can reduce the incentive for contractors to innovate or improve efficiency.
Transparency concerns may arise if the justification for sole-source procurement is not robust.
Dependence on a single contractor could create supply chain vulnerabilities.
Limited data makes it difficult to assess the contractor's past performance on similar sole-source contracts.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
The contract addresses a specific military need for armored vehicles.
The contractor, ND Defense LLC, is involved in the manufacturing of military vehicles.
The award is for production, indicating a tangible output of defense equipment.

Sector Analysis

The defense manufacturing sector is characterized by high barriers to entry, specialized technology, and significant government investment. Contracts for armored vehicles fall under the broader category of military vehicle manufacturing, which is a critical component of national defense spending. The market size for such specialized equipment is substantial, driven by global defense needs. This contract fits within the segment of armored vehicle production, likely serving a specific tactical requirement. Comparable spending benchmarks would typically involve other contracts for similar vehicle platforms or upgrades within the defense budget.

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 a small business set-aside. The prime contractor, ND Defense LLC, is likely a larger entity capable of fulfilling this production requirement independently or through its established supply chains, which may or may not involve small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods within the agreed-upon price. Transparency is limited by the sole-source nature of the award; while the contract award itself is likely public record, the detailed justifications and negotiations leading to it may not be fully transparent. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Military Armored Vehicle Manufacturing
Defense Production Contracts
Foreign Military Sales (if applicable)
Tactical Vehicle Procurement

Risk Flags

Limited Competition
Sole-Source Award
Potential for Overpricing
Lack of Transparency in Justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.6 million to ND DEFENSE LLC. PK-WAW MAXXPRO PRODUCTION CONTRACT FOR PAKISTAN

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 $32.6 million.

What is the period of performance?

Start: 2017-02-16. End: 2018-11-30.

What is the specific type of armored vehicle being produced under this contract, and what are its key capabilities?

The contract is identified as 'PK-WAW MAXXPRO PRODUCTION CONTRACT FOR PAKISTAN'. While the specific model 'MAXXPRO' is mentioned, further details on its exact capabilities are not provided in the data. MaxxPro MRAPs (Mine-Resistant Ambush Protected vehicles) are typically designed to withstand improvised explosive devices (IEDs) and ambushes, offering enhanced protection for troops compared to traditional armored personnel carriers. They are often used in high-threat environments for troop transport, convoy escort, and patrol missions. The 'PK-WAW' designation likely refers to a specific variant or configuration tailored for Pakistan's requirements, potentially including specific armor packages, communication systems, or weapon mounts.

What is the justification for awarding this contract on a sole-source basis, and were any other potential sources considered?

The provided data explicitly states 'CT: NOT AVAILABLE FOR COMPETITION', which indicates a sole-source or non-competitive award. The specific justification for this determination is not detailed in the given data points. Typically, agencies justify sole-source awards based on factors such as unique capabilities, proprietary technology, urgent and compelling needs where only one source can reasonably fulfill the requirement, or when market research reveals only one capable source. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition - J&A), it is impossible to ascertain the precise reasons or if alternative sources were indeed considered and found unsuitable.

How does the $32.6 million contract value compare to historical spending on similar armored vehicle procurements by the Department of Defense?

Directly comparing the $32.6 million value to historical spending on similar armored vehicle procurements is challenging without more specific data on the type and quantity of vehicles. However, the MaxxPro MRAP platform has been a significant part of US military vehicle procurements in the past, particularly during operations in Iraq and Afghanistan. Individual vehicle costs can vary widely based on configuration, upgrades, and order volume. Given that this is a production contract for a specific number of vehicles (implied by the total value and duration), $32.6 million suggests a substantial procurement, but whether it represents a high or low cost per unit or total program cost relative to historical benchmarks would require detailed analysis of unit pricing and vehicle specifications.

What are the potential risks associated with awarding a significant defense contract like this without full and open competition?

Awarding a significant defense contract without full and open competition, as indicated by 'NOT AVAILABLE FOR COMPETITION', carries several potential risks. Firstly, it limits price discovery, meaning the government may not achieve the lowest possible price because there is no competitive pressure among multiple bidders. This can lead to higher costs for taxpayers. Secondly, it can reduce the incentive for the awarded contractor to innovate or improve efficiency, as they face less market pressure. Thirdly, it may foster contractor lock-in, making it difficult and costly to switch to alternative suppliers in the future. Lastly, it can raise concerns about transparency and fairness in the procurement process if the justification for the sole-source award is not sufficiently robust or publicly scrutinized.

What is the track record of ND Defense LLC in fulfilling government contracts, particularly for armored vehicles?

The provided data identifies ND Defense LLC as the contractor for this 'PK-WAW MAXXPRO PRODUCTION CONTRACT FOR PAKISTAN'. However, the data itself does not offer details on ND Defense LLC's broader track record, past performance ratings on other contracts, or specific experience with armored vehicle production beyond this award. To assess their track record, one would need to consult government contract databases (like SAM.gov or FPDS), performance evaluation reports (e.g., Contractor Performance Assessment Reporting System - CPARS), and industry news. Without this external information, it's difficult to gauge their reliability, quality of work, and history of meeting deadlines and budget constraints on previous government engagements.

What are the implications of this contract for US foreign military sales or international defense cooperation?

The contract designation 'PK-WAW MAXXPRO PRODUCTION CONTRACT FOR PAKISTAN' strongly suggests this procurement is related to Foreign Military Sales (FMS) or a similar international cooperation agreement. Such contracts enable the US to provide defense articles and services to partner nations, thereby enhancing their security capabilities and promoting regional stability, often aligned with US foreign policy objectives. The production of these vehicles for Pakistan could strengthen bilateral defense ties, improve Pakistan's counter-terrorism or border security operations, and potentially standardize equipment within allied forces. It also represents a significant revenue stream for the US defense industrial base.

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: W56HZV15R0147

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navistar International Corporation

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: $32,611,908

Exercised Options: $32,611,908

Current Obligation: $32,611,908

Subaward Activity

Number of Subawards: 52

Total Subaward Amount: $65,615,864

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline