DoD Awards $46.6M for Abrams Tank Sustainment to General Dynamics, Lacking Competition
Contract Overview
Contract Amount: $46,569,898 ($46.6M)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2019-03-05
End Date: 2025-11-13
Contract Duration: 2,445 days
Daily Burn Rate: $19.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ABRAMS OBSOLESCENCE
Place of Performance
Location: TALLAHASSEE, LEON County, FLORIDA, 32302
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $46.6 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: ABRAMS OBSOLESCENCE Key points: 1. Significant contract value for a single vendor. 2. Sole-source award raises concerns about price discovery. 3. Potential for cost overruns in cost-plus contracts. 4. Focus on critical defense equipment manufacturing.
Value Assessment
Rating: questionable
The $46.6M award to General Dynamics for Abrams tank sustainment is a substantial sum. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential market alternatives or if it reflects optimal pricing.
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 potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition on this large contract may result in higher taxpayer costs due to the absence of market-driven price optimization.
Public Impact
Ensures continued readiness of Abrams main battle tanks. Supports critical defense industrial base capabilities. Potential for extended reliance on a single contractor for essential parts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Maintains critical defense asset readiness
- Supports established manufacturing capabilities
Sector Analysis
This contract falls within the defense sector, specifically military vehicle manufacturing. Spending benchmarks for tank component manufacturing can vary widely based on technological complexity and production volume, but sole-source awards often exceed competitive benchmarks.
Small Business Impact
The data indicates this contract was not awarded to small businesses (sb: false). There is no indication of subcontracting opportunities for small businesses within this sole-source award.
Oversight & Accountability
The 'NOT COMPETED' status suggests a lack of proactive market research or a justification for sole-source procurement that warrants further oversight to ensure the government's best interests were met.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- No small business participation indicated
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, fl, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $46.6 million to GENERAL DYNAMICS LAND SYSTEMS INC.. ABRAMS OBSOLESCENCE
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 $46.6 million.
What is the period of performance?
Start: 2019-03-05. End: 2025-11-13.
What is the justification for this sole-source award, and has it been adequately documented to ensure fair pricing?
The justification for a sole-source award typically involves specific circumstances like unique capabilities or urgent needs. Without access to the justification documentation, it's impossible to verify its adequacy. However, the absence of competition inherently raises concerns about achieving fair and reasonable pricing, potentially necessitating a deeper dive into the contractor's cost structure and profit margins.
What are the risks associated with the 'COST PLUS FIXED FEE' contract type for this specific procurement?
Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize their fixed fee profit margin, especially when the base cost is not well-defined or competitive. For Abrams tank sustainment, this could lead to cost overruns if not closely monitored, potentially exceeding the initial $46.6M estimate and impacting overall program budget predictability.
How does the long contract duration (2445 days) impact the long-term cost-effectiveness and technological relevance of Abrams tank sustainment?
A long contract duration like 2445 days for sustainment can lock in current technologies and potentially higher costs over an extended period. While it provides stability, it may hinder the adoption of newer, more cost-effective sustainment solutions or technological upgrades for the Abrams fleet. Regular reviews and performance metrics are crucial to ensure continued value and relevance.
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: W56HZV18R0106
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: $47,466,951
Exercised Options: $46,569,898
Current Obligation: $46,569,898
Actual Outlays: $4,455,287
Subaward Activity
Number of Subawards: 34
Total Subaward Amount: $20,273,429
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-03-05
Current End Date: 2025-11-13
Potential End Date: 2025-11-13 12:11:00
Last Modified: 2025-11-19
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