General Dynamics Land Systems awarded $19.2M contract for Government Furnished Equipment maintenance at Army Anniston Depot

Contract Overview

Contract Amount: $19,248,173 ($19.2M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2017-05-31

End Date: 2023-06-13

Contract Duration: 2,204 days

Daily Burn Rate: $8.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IGF::OT::IGF THE CONTRACT WILL PROVIDE FOR THE CONTRACTOR TO USE, ACQUIRE, MAINTAIN, REPAIR, REPLACE, UPGRADE, OR DISPOSE OF GOVERNMENT FURNISHED EQUIPMENT LOCATED TO ARMY ANNISTON DEPOT AND THE VARIOUS FACILITIES OPERATED AND OWNED OR LEASED BY GENERAL DYNAMICS LAND SYSTEMS.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $19.2 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: IGF::OT::IGF THE CONTRACT WILL PROVIDE FOR THE CONTRACTOR TO USE, ACQUIRE, MAINTAIN, REPAIR, REPLACE, UPGRADE, OR DISPOSE OF GOVERNMENT FURNISHED EQUIPMENT LOCATED TO ARMY ANNISTON DEPOT AND THE VARIOUS FACILITIES OPERATED AND OWNED OR LEASED BY GENERAL DYNAMICS LAND SYSTEMS. Key points: 1. Contract focuses on maintaining, repairing, and upgrading government-owned equipment, crucial for military readiness. 2. Sole-source award raises questions about potential cost efficiencies and market competition. 3. Contract duration of over 6 years suggests a long-term need for these services. 4. The scope includes a wide range of actions from acquisition to disposal of equipment. 5. Performance context is tied to the Army's operational needs at a key depot. 6. Sector positioning is within the defense industrial base, specifically armored vehicle support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific focus on Government Furnished Equipment (GFE) maintenance. Without competitive bids, it's difficult to assess if the $19.2 million price tag represents optimal value for money. The 'Cost No Fee' contract type suggests the government bears the cost of performance, with the contractor's fee being fixed, which can sometimes lead to less incentive for cost control compared to fixed-price contracts. Further analysis would require understanding the specific GFE assets covered and their maintenance history.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was limited, potentially leading to higher costs for the government than if multiple bids had been solicited.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not have multiple offers to choose from to secure the best possible value.

Public Impact

The primary beneficiaries are the U.S. Army, ensuring the operational readiness of its armored vehicles and associated equipment. Services delivered include the comprehensive lifecycle management of Government Furnished Equipment. Geographic impact is centered around the Army Anniston Depot and facilities operated by General Dynamics Land Systems. Workforce implications include the potential for sustained employment for skilled technicians and support staff involved in equipment maintenance and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus contract type may reduce contractor incentive for cost efficiency.
Lack of transparency in the sole-source justification requires scrutiny.
Long contract duration could mask inefficiencies over time.
Scope is broad, potentially encompassing services that could be separately competed.

Positive Signals

Contract ensures critical maintenance for essential military equipment.
Long-term relationship with a known entity may provide stability.
Focus on GFE maintenance addresses a specific, necessary requirement.
Potential for specialized expertise from General Dynamics Land Systems.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically supporting the manufacturing and maintenance of military vehicles. The market for such specialized services is often concentrated among a few key defense contractors with the necessary expertise and security clearances. General Dynamics Land Systems is a major player in this space. Comparable spending benchmarks would involve analyzing other contracts for similar GFE maintenance or sustainment services for armored vehicle fleets within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, General Dynamics Land Systems, is a large corporation. There is no explicit information provided regarding subcontracting plans for small businesses. This suggests that the primary focus is on the prime contractor's capabilities, and the impact on the small business ecosystem may be indirect, potentially through opportunities if GDLS chooses to subcontract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and potentially the Defense Contract Management Agency (DCMA). As a 'Cost No Fee' contract, financial oversight would focus on ensuring costs are allowable, allocable, and reasonable. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Army Logistics Modernization Program
Department of Defense Sustainment Contracts
Armored Vehicle Maintenance and Repair Services
Government Furnished Equipment Management

Risk Flags

Sole-source award
Cost-reimbursement contract type
Lack of competitive bidding
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.2 million to GENERAL DYNAMICS LAND SYSTEMS INC.. IGF::OT::IGF THE CONTRACT WILL PROVIDE FOR THE CONTRACTOR TO USE, ACQUIRE, MAINTAIN, REPAIR, REPLACE, UPGRADE, OR DISPOSE OF GOVERNMENT FURNISHED EQUIPMENT LOCATED TO ARMY ANNISTON DEPOT AND THE VARIOUS FACILITIES OPERATED AND OWNED OR LEASED BY GENERAL DYNAMICS LAND SYSTEMS.

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 $19.2 million.

What is the period of performance?

Start: 2017-05-31. End: 2023-06-13.

What specific types of Government Furnished Equipment are covered under this contract, and what is their criticality to Army operations?

The contract broadly covers Government Furnished Equipment (GFE) located at Army Anniston Depot and facilities operated by General Dynamics Land Systems (GDLS). While the specific GFE is not detailed in the provided data, it is highly probable that this includes major components, systems, and potentially entire platforms related to armored vehicles, given GDLS's primary business. Criticality would be high, as GFE often represents the core assets the government provides to contractors for modification, maintenance, or production. Failure to maintain these assets could directly impact the Army's ability to field and operate its armored fleet, affecting readiness and mission capability. A deeper dive into the contract's Statement of Work (SOW) would be necessary to identify specific GFE items and their associated operational dependencies.

How does the 'Cost No Fee' (Cost) contract type compare to other contract types in terms of risk and potential for cost savings for the government?

The 'Cost No Fee' (Cost) contract type is a variation of cost-reimbursement contracts where the contractor is reimbursed for all allowable costs but receives no fee or profit. This type is typically used when the level of risk for the contractor is very low, or when the primary objective is to ensure the availability of a service or item without the contractor bearing financial risk. For the government, this means the cost is borne by the taxpayer, and the contractor has minimal incentive to control costs beyond what is necessary to fulfill the contract terms, as their profit is not tied to efficiency. Compared to fixed-price contracts, where the contractor assumes cost risk, Cost contracts offer less potential for cost savings if the contractor is not diligent. However, they can be advantageous for complex, uncertain, or R&D-heavy projects where defining a fixed price upfront is impractical. In this case, for GFE maintenance, it suggests a focus on ensuring the work gets done rather than achieving a specific profit margin for the contractor.

What is the historical spending pattern for GFE maintenance at Army Anniston Depot, and how does this $19.2M award compare?

The provided data only includes details for this specific contract awarded in 2017 with an estimated value of $19.2 million and a duration extending to 2023. It does not offer historical spending patterns for GFE maintenance at Army Anniston Depot. To establish a comparison, one would need to access historical contract databases (e.g., FPDS-NG) to identify previous contracts for similar services at this location or for similar equipment. Analyzing past awards, their values, durations, and contract types would reveal trends. Without this historical context, it's difficult to ascertain if $19.2 million over approximately six years represents an increase, decrease, or stable level of investment in GFE maintenance for this facility and its associated equipment. This lack of historical data hinders a robust value-for-money assessment.

Given the sole-source nature, what specific justifications were likely provided to award this contract without competition?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations (FAR). For this contract, likely justifications could include: 1) Unique Capability: General Dynamics Land Systems may possess unique technical expertise, proprietary processes, or specialized facilities essential for maintaining the specific GFE, particularly if it relates to their proprietary armored vehicle systems. 2) Urgency: Although not explicitly stated, a critical operational need might have necessitated a rapid award without the time required for a full competitive process. 3) Industrial Mobilization: In some cases, sole-source awards are used to maintain critical industrial capabilities deemed essential for national security. 4) Follow-on Work: If GDLS performed prior work on this GFE under circumstances that make them the only viable source for continued support. The specific justification would be documented in the contract file, often requiring approval from higher authorities within the Department of Defense.

What are the potential risks associated with a long-term, sole-source contract for equipment maintenance?

Long-term, sole-source contracts for equipment maintenance present several risks. Firstly, the lack of competition can lead to complacency and reduced incentive for the contractor to innovate or improve efficiency, potentially resulting in higher costs over time. Secondly, without regular market checks, the government may overpay for services compared to what could be achieved through competitive bidding. Thirdly, there's a risk of vendor lock-in, where the government becomes overly dependent on a single provider, making it difficult and costly to switch even if performance or pricing becomes unsatisfactory. Fourthly, the absence of multiple bidders can obscure potential performance issues or quality degradation that might be highlighted by competitors. Finally, sole-source awards can sometimes be perceived as less transparent, potentially raising concerns about fairness and the best use of taxpayer funds.

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: W56HZV17R0078

Offers Received: 1

Pricing Type: COST NO FEE (S)

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: $19,248,173

Exercised Options: $19,248,173

Current Obligation: $19,248,173

Subaward Activity

Number of Subawards: 72

Total Subaward Amount: $24,231,204

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline