Army awards $186M for 640 ambulance HMMWVs, a sole-source contract with Am General LLC

Contract Overview

Contract Amount: $186,428,123 ($186.4M)

Contractor: AM General LLC

Awarding Agency: Department of Defense

Start Date: 2018-09-14

End Date: 2020-09-30

Contract Duration: 747 days

Daily Burn Rate: $249.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR 640 M997A3 AMBULANCE HMMWVS

Place of Performance

Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $186.4 million to AM GENERAL LLC for work described as: DELIVERY ORDER FOR 640 M997A3 AMBULANCE HMMWVS Key points: 1. Contract awarded as a delivery order under an existing contract. 2. Sole-source award raises questions about price discovery and potential for overpayment. 3. Limited competition may indicate a lack of market alternatives or strategic sourcing. 4. Delivery order duration of 747 days suggests a phased or extended production schedule. 5. Focus on armored vehicles highlights ongoing defense procurement needs. 6. Contract value of $186M for 640 units implies significant per-unit investment.

Value Assessment

Rating: questionable

The total award of $186.4 million for 640 M997A3 ambulance HMMWVs represents a substantial investment. Without competitive bidding, it is difficult to benchmark the value for money. The per-unit cost is approximately $291,294. This figure needs to be compared against similar recent procurements of specialized military vehicles, particularly ambulance variants, to assess if it aligns with market rates or reflects a premium due to the sole-source nature of the award. The lack of competition inherently limits the ability to determine if the pricing is optimal.

Cost Per Unit: Approximately $291,294 per unit.

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not competed. The data indicates it was likely awarded under an existing contract vehicle, but the specific justification for not opening it to broader competition is not detailed here. A sole-source award typically occurs when only one responsible source can provide the required goods or services. This lack of competition means that the Department of the Army did not solicit bids from multiple vendors, potentially limiting price negotiation and innovation.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive pressure. This can lead to higher overall spending for essential military equipment.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize these specialized ambulance vehicles in operational environments. The contract delivers critical medical evacuation capabilities, enhancing battlefield survivability for wounded soldiers. The geographic impact is primarily within the United States, where the vehicles will be manufactured and potentially deployed from. The contract supports jobs within the defense manufacturing sector, specifically at Am General LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
High per-unit cost requires further benchmarking against comparable vehicles.
Long delivery order duration could indicate production constraints or planning challenges.

Positive Signals

Addresses a critical need for medical evacuation capabilities within the Army.
Award to an established manufacturer with a history in HMMWV production.
Firm fixed-price contract type provides cost certainty for the government.

Sector Analysis

The procurement falls within the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. This is a specialized segment of the broader defense industrial base, characterized by high barriers to entry, significant R&D investment, and long production cycles. Spending in this sector is heavily influenced by geopolitical events and national defense strategies. Comparable spending benchmarks would involve analyzing other large-scale procurements of tactical wheeled vehicles, particularly those with specialized medical or armored configurations, often awarded by agencies like the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses explicitly detailed in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Am General LLC voluntarily engages small businesses in its supply chain. Further investigation into subcontracting plans would be needed to assess any indirect benefits or opportunities for small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Given it's a delivery order under an existing contract, initial oversight may have been established during the parent contract's award. Transparency is limited due to the sole-source nature. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected. The firm fixed-price contract type offers some cost control, but oversight is crucial to ensure timely delivery and adherence to specifications.

Related Government Programs

Tactical Wheeled Vehicles
Medical Support Equipment
Armored Vehicle Manufacturing
Military Logistics
Ambulance Vehicles

Risk Flags

Sole-source award
Lack of competition
High per-unit cost potential
Extended delivery timeline

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.4 million to AM GENERAL LLC. DELIVERY ORDER FOR 640 M997A3 AMBULANCE HMMWVS

Who is the contractor on this award?

The obligated recipient is AM GENERAL 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 $186.4 million.

What is the period of performance?

Start: 2018-09-14. End: 2020-09-30.

What is Am General LLC's track record with HMMWV production and related contracts?

Am General LLC has a long and established history as the original manufacturer of the High Mobility Multipurpose Wheeled Vehicle (HMMWV) platform. They have been a primary supplier to the U.S. military for decades, producing tens of thousands of HMMWVs in various configurations. Their track record includes numerous contracts for production, upgrades, and sustainment of the HMMWV fleet. This includes specialized variants like ambulance models. While their experience is extensive, the specific performance metrics, delivery timeliness, and quality control on past contracts, particularly those awarded sole-source or under similar conditions, would require a deeper dive into contract performance reports and historical data to fully assess.

How does the per-unit cost of these ambulance HMMWVs compare to similar military vehicle procurements?

The per-unit cost for these M997A3 ambulance HMMWVs is approximately $291,294. Benchmarking this figure is crucial for assessing value. Comparable military vehicle procurements can vary widely based on specialization, armor levels, technology integration, and quantity. For instance, standard light tactical vehicles might cost significantly less, while heavily armored personnel carriers or specialized engineering vehicles could cost more. Without direct comparisons of similarly configured armored ambulance vehicles procured competitively, it's challenging to definitively state if $291,294 is high or low. However, given the specialized nature (armored ambulance) and the sole-source award, there is a risk that this price may be higher than what could be achieved through competition.

What are the primary risks associated with this sole-source contract award?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without competing offers, the government loses the leverage to negotiate the best possible price, potentially leading to overpayment. Another risk is reduced innovation, as there is less incentive for the contractor to offer cost-saving efficiencies or technological advancements when competition is absent. Furthermore, a sole-source award can sometimes indicate a lack of market research or an over-reliance on a single supplier, which can create vulnerabilities in the supply chain or limit future sourcing options. The extended delivery timeline also presents a risk of delays impacting operational readiness.

What is the expected program effectiveness and impact of these ambulance HMMWVs?

The expected program effectiveness of these M997A3 ambulance HMMWVs is high in terms of enhancing medical evacuation capabilities on the battlefield. These vehicles are designed to provide protected transport for wounded personnel, offering a significant improvement in survivability compared to unarmored or less capable platforms. Their effectiveness is tied to their ability to withstand battlefield threats while providing a stable medical treatment environment. The impact will be a strengthened medical support chain for deployed forces, potentially reducing fatalities and improving recovery rates for injured soldiers. The reliability and maintainability of the vehicles, coupled with adequate training for operators and medics, will be key determinants of their overall effectiveness in operational settings.

How does this contract's value compare to historical spending on similar military ambulance vehicles?

Comparing this $186.4 million contract for 640 ambulance HMMWVs to historical spending requires access to detailed historical procurement data for similar platforms. The Army has procured HMMWV variants, including ambulance versions, for many years. Historical spending patterns would need to account for inflation, technological upgrades, and changes in vehicle configurations over time. For example, earlier procurements of less armored or technologically simpler ambulance vehicles would likely have lower per-unit costs. Conversely, more recent procurements of highly protected or technologically advanced medical evacuation platforms might show higher figures. Without specific historical data points for comparable armored ambulance HMMWVs, a precise comparison is difficult, but the current per-unit cost of approximately $291,294 serves as a baseline for future analysis.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 105 N NILES AVE, SOUTH BEND, IN, 46617

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $186,428,123

Exercised Options: $186,428,123

Current Obligation: $186,428,123

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $30,479,781

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV18D0084

IDV Type: IDC

Timeline