DoD Awards $769M Abrams Tank Contract to General Dynamics, Not Competed

Contract Overview

Contract Amount: $768,999,510 ($769.0M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2017-02-23

End Date: 2026-09-30

Contract Duration: 3,506 days

Daily Burn Rate: $219.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF. BASE AWARD OF ABRAMS STS/SSTS FY17-22 CONTRACT. BASE AWARD INCLUDES 7 WORK DIRECTIVES. 1 COMPLETION EFFORT AND 6 LOE EFFORTS.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $769.0 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: IGF::OT::IGF. BASE AWARD OF ABRAMS STS/SSTS FY17-22 CONTRACT. BASE AWARD INCLUDES 7 WORK DIRECTIVES. 1 COMPLETION EFFORT AND 6 LOE EFFORTS. Key points: 1. Significant investment in Abrams tank sustainment and upgrades. 2. Sole-source award to General Dynamics raises competition concerns. 3. Long-term contract (2017-2026) indicates ongoing program needs. 4. Focus on completion and level-of-effort work directives.

Value Assessment

Rating: questionable

The $769 million award for Abrams tank sustainment and upgrades is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to General Dynamics Land Systems Inc. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition for a contract of this magnitude means taxpayers may be paying a premium for Abrams tank services and components.

Public Impact

Ensures continued readiness and modernization of the U.S. Army's primary battle tank. Supports jobs and economic activity within the defense industrial base. Potential for extended reliance on a single contractor for critical military hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Essential military hardware sustainment
Experienced contractor

Sector Analysis

This contract falls within the Defense sector, specifically military armored vehicle manufacturing and sustainment. Spending benchmarks for similar large-scale defense contracts are typically in the hundreds of millions to billions of dollars.

Small Business Impact

The contract data indicates the prime contractor is General Dynamics Land Systems Inc., a large business. There is no explicit information provided regarding subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The award was issued by the Department of the Army. Oversight would typically involve contract management, performance monitoring, and financial audits to ensure compliance and value for money, especially given the sole-source nature.

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.
Cost-plus contract type can lead to cost overruns.
Long contract duration may reduce flexibility.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $769.0 million to GENERAL DYNAMICS LAND SYSTEMS INC.. IGF::OT::IGF. BASE AWARD OF ABRAMS STS/SSTS FY17-22 CONTRACT. BASE AWARD INCLUDES 7 WORK DIRECTIVES. 1 COMPLETION EFFORT AND 6 LOE EFFORTS.

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 $769.0 million.

What is the period of performance?

Start: 2017-02-23. End: 2026-09-30.

What is the justification for awarding this contract on a sole-source basis rather than through full and open competition?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent requirements where only one source can reasonably meet the need. For the Abrams tank, General Dynamics possesses extensive knowledge and manufacturing capabilities specific to this platform, making competition challenging without significant lead time and investment.

How will the cost-plus fixed fee (CPFF) contract type be managed to ensure cost control and prevent overruns?

Managing a CPFF contract requires rigorous oversight of allowable costs, contractor performance, and adherence to the fixed fee. The government must actively monitor expenditures, conduct audits, and ensure the contractor operates efficiently. Clear performance metrics and milestone tracking are crucial to mitigate risks associated with cost-plus arrangements.

What is the long-term strategy for Abrams tank sustainment and modernization beyond this contract's expiration?

The long-term strategy likely involves a phased approach to modernization and sustainment, potentially including future competitive procurements for upgrades or new platforms. The Department of the Army would be evaluating evolving threats and technological advancements to determine the optimal path forward for its armored vehicle fleet.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV16R0062

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $768,999,510

Exercised Options: $768,999,510

Current Obligation: $768,999,510

Actual Outlays: $14,090,865

Subaward Activity

Number of Subawards: 509

Total Subaward Amount: $150,399,874

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline