DoD awards $32.9M for Abrams transmission sustainment, raising concerns about sole-source procurement

Contract Overview

Contract Amount: $32,904,583 ($32.9M)

Contractor: Allison Transmission Inc

Awarding Agency: Department of Defense

Start Date: 2018-09-28

End Date: 2023-12-31

Contract Duration: 1,920 days

Daily Burn Rate: $17.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NEW AND UPGRADED ABRAMS TRANSMISSION, SUSTAINMENT KITS, IRAN, AND STS IGF::OT::IGF

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to ALLISON TRANSMISSION INC for work described as: NEW AND UPGRADED ABRAMS TRANSMISSION, SUSTAINMENT KITS, IRAN, AND STS IGF::OT::IGF Key points: 1. Significant investment in critical military hardware sustainment. 2. Reliance on a single supplier may limit cost-saving opportunities. 3. Potential for price escalation due to lack of competition. 4. Focus on Abrams tank upgrades highlights ongoing defense modernization efforts.

Value Assessment

Rating: fair

The contract value of $32.9M for sustainment kits and transmission upgrades is substantial. Without competitive bids, it's difficult to assess if this represents a fair market price compared to potential alternatives or previous procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and negotiation leverage, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for these critical Abrams transmission components.

Public Impact

Ensures continued operational readiness of Abrams tanks. Supports the defense industrial base and associated jobs. Potential for taxpayer funds to be used inefficiently due to sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of price competition
Potential for cost overruns

Positive Signals

Supports critical defense equipment
Ensures operational readiness

Sector Analysis

This contract falls within the Defense sector, specifically related to mechanical power transmission equipment manufacturing. Spending benchmarks for such specialized military hardware sustainment can vary widely, but sole-source awards often deviate from competitive norms.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). Therefore, there is no direct benefit to small businesses from this specific award.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny. Oversight should focus on ensuring the justification for sole-sourcing is robust and that pricing is reasonable, even without competition.

Related Government Programs

Mechanical Power Transmission Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to ALLISON TRANSMISSION INC. NEW AND UPGRADED ABRAMS TRANSMISSION, SUSTAINMENT KITS, IRAN, AND STS IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION 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 $32.9 million.

What is the period of performance?

Start: 2018-09-28. End: 2023-12-31.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For military hardware like Abrams transmissions, it might stem from specific design requirements or existing integration complexities that only the incumbent manufacturer can address efficiently.

What are the risks associated with sole-source procurement of military hardware?

Sole-source procurement carries risks of inflated prices due to lack of competition, reduced innovation, and potential vendor lock-in. Taxpayers may bear higher costs, and the government loses leverage in negotiations. There's also a risk that the sole provider may not prioritize efficiency or cost-effectiveness as strongly as they would in a competitive environment.

How does this contract contribute to the overall effectiveness of the Abrams tank fleet?

This contract is crucial for maintaining and upgrading the transmission systems of the Abrams tank fleet, directly impacting their operational readiness and combat effectiveness. Reliable transmissions are vital for mobility and performance in demanding battlefield conditions, ensuring the tanks can fulfill their intended mission.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Mechanical Power Transmission Equipment Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV18R0023

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Allison Transmission Holdings, Inc.

Address: ONE ALLISON WAY, INDIANAPOLIS, IN, 46222

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: $32,904,583

Exercised Options: $32,904,583

Current Obligation: $32,904,583

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline