Army Awards $332M for 45 M1A2 SEPV3 Tanks and Parts, Integrating New Tech with Legacy Components

Contract Overview

Contract Amount: $331,952,109 ($332.0M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2017-07-31

End Date: 2019-10-31

Contract Duration: 822 days

Daily Burn Rate: $403.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS CONTRACT IS TO INSTALL AND INTEGRATE M1A2 SYSTEM ENHANCEMENT PROGRAM VERSION 3 (SEPV3) TECHNOLOGIES (HARDWARE AND SOFTWARE) AND RECLAIMED/REFURBISHED SEP VERSION 2 (SEPV2) LEGACY COMPONENTS, RESULTING IN 45 M1A2 SEPV3 CONFIGURED TANKS. THIS CONTRACT WILL ALSO PROCURE, STOCK AND STORE UP TO 60 SETS OF SEPV3 UNIQUE PARTS, MATERIAL, AND KEY COMPONENTS CONSISTING OR REDESIGNED LINE REPLACEABLE UNITS (LRUS), NEW LINE REPLACEMENT MODULES (LRMS) AND IMPROVED NETWORK CAPABILITIES, INCLUSIVE OF SOFTWARE; INTEGRATED PRODUCT SUPPORT (IPS) REQUIREMENTS (IPS SPARES AND REPAIR PARTS). THE CONTRACT WILL ALSO INCLUDE AN OPTION TO COMPLETE UP TO AN ADDITIONAL 60 M2A2 SEPV3 TANKS.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $332.0 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: THE PURPOSE OF THIS CONTRACT IS TO INSTALL AND INTEGRATE M1A2 SYSTEM ENHANCEMENT PROGRAM VERSION 3 (SEPV3) TECHNOLOGIES (HARDWARE AND SOFTWARE) AND RECLAIMED/REFURBISHED SEP VERSION 2 (SEPV2) LEGACY COMPONENTS, RESULTING IN 45 M1A2 SEPV3 CONFIGURED TANKS. THIS CONTRACT WILL ALSO… Key points: 1. Significant investment in modernizing armored vehicle fleet with advanced technology. 2. Sole-source award to General Dynamics Land Systems Inc. raises competition concerns. 3. High value contract with potential for future expansion to 60 additional tanks. 4. Focus on integrating new hardware/software with refurbished legacy parts.

Value Assessment

Rating: questionable

The contract value of $331.95 million for 45 tanks and associated parts appears high, especially given the sole-source nature. Benchmarking against similar tank modernization programs or component procurements would be necessary for a precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The 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 in this large contract may result in taxpayers paying a premium for the M1A2 SEPV3 tanks and associated components.

Public Impact

Modernization of the U.S. Army's main battle tank fleet enhances combat readiness. Integration of new technologies aims to improve survivability and lethality. Procurement of spare parts ensures long-term operational support and reduces future delays. Potential for follow-on contracts if the option for additional tanks is exercised.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
High contract value requires careful monitoring of cost-effectiveness.
Integration of new and refurbished components may present technical challenges.

Positive Signals

Upgrades critical military hardware to maintain technological superiority.
Ensures availability of essential spare parts for sustained operations.
Potential for future expansion demonstrates confidence in the chosen solution.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on armored vehicle manufacturing and modernization. Spending in this area is driven by national security needs and technological advancements in military hardware.

Small Business Impact

The data indicates the prime contractor is General Dynamics Land Systems Inc., a large business. There is no explicit information on subcontracting to small businesses within this award notice.

Oversight & Accountability

As a sole-source award, oversight is crucial to ensure fair pricing and effective execution. The Department of the Army's contracting activity should maintain rigorous performance monitoring and financial oversight.

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
High contract value
Integration complexity
Lack of cost transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $332.0 million to GENERAL DYNAMICS LAND SYSTEMS INC.. THE PURPOSE OF THIS CONTRACT IS TO INSTALL AND INTEGRATE M1A2 SYSTEM ENHANCEMENT PROGRAM VERSION 3 (SEPV3) TECHNOLOGIES (HARDWARE AND SOFTWARE) AND RECLAIMED/REFURBISHED SEP VERSION 2 (SEPV2) LEGACY COMPONENTS, RESULTING IN 45 M1A2 SEPV3 CONFIGURED TANKS. THIS CONTRACT WILL ALSO PROCURE, STOCK AND STORE UP TO 60 SETS OF SEPV3 UNIQUE PARTS, MATERIAL, AND KEY COMPONENTS CONSISTING OR REDESIGNED LINE REPLACEABLE UNITS (LRUS), NEW LINE REPLACEMENT MODULES (LRMS) AND IMPROVED NETWORK CAPABILITIES, I

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 $332.0 million.

What is the period of performance?

Start: 2017-07-31. End: 2019-10-31.

What is the cost breakdown for hardware, software, and refurbished components?

The provided data does not detail the cost breakdown for specific components like hardware, software, or refurbished legacy parts. A more granular financial analysis would be required to understand the cost distribution within the $331.95 million contract value.

What are the risks associated with integrating new SEPV3 technologies with refurbished SEPV2 components?

Integrating new technologies with older, refurbished components carries risks such as compatibility issues, potential for increased maintenance complexity, and unforeseen performance degradation. Thorough testing and validation are essential to mitigate these technical challenges and ensure system reliability.

How does the cost of this sole-source contract compare to potentially competed alternatives?

Without a competed benchmark, it's difficult to definitively assess the cost-effectiveness. However, sole-source contracts generally carry a higher risk of inflated pricing due to the absence of competitive pressure. A comparative analysis with similar, competed programs would be needed for a precise evaluation.

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: W56HZV16R0268

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: $331,952,109

Exercised Options: $331,952,109

Current Obligation: $331,952,109

Subaward Activity

Number of Subawards: 1088

Total Subaward Amount: $334,884,234

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline