DoD awards $187.5M for 648 HMMWV ambulances, with limited competition and a focus on military vehicle manufacturing

Contract Overview

Contract Amount: $187,496,909 ($187.5M)

Contractor: AM General LLC

Awarding Agency: Department of Defense

Start Date: 2019-04-09

End Date: 2026-02-28

Contract Duration: 2,517 days

Daily Burn Rate: $74.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR 648 M997A3 HMMWV AMBULANCES

Place of Performance

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

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $187.5 million to AM GENERAL LLC for work described as: DELIVERY ORDER FOR 648 M997A3 HMMWV AMBULANCES Key points: 1. Value for money assessed through comparison with similar military vehicle procurements. 2. Competition dynamics indicate a sole-source award, potentially impacting price. 3. Risk indicators include reliance on a single contractor for critical medical transport. 4. Performance context is within the Department of the Army's vehicle modernization efforts. 5. Sector positioning is within the specialized military armored vehicle manufacturing industry.

Value Assessment

Rating: fair

The contract value of $187.5 million for 648 HMMWV ambulances appears to be within a reasonable range for specialized military vehicles, considering the complexity and customization required. However, without direct benchmarking against identical or highly similar ambulance variants procured under competitive conditions, a definitive value-for-money assessment is challenging. The firm-fixed-price structure provides cost certainty for the government, but the lack of competition may have led to a higher price than could have been achieved otherwise.

Cost Per Unit: Approximately $290,700 per ambulance. This per-unit cost is difficult to benchmark without specific details on the ambulance configuration and included equipment, but it is within the expected range for heavily armored and specialized medical vehicles.

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not competed among multiple potential suppliers. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting urgent requirements. The limited competition raises concerns about potential price inflation and reduced incentive for the contractor to offer the most cost-effective solution.

Taxpayer Impact: The lack of competition means taxpayers may not have received the benefit of a lower price that could have resulted from a competitive bidding process. This could translate to a higher overall expenditure for these essential medical vehicles.

Public Impact

Benefits military personnel by providing essential medical evacuation capabilities on the battlefield. Delivers 648 M997A3 HMMWV ambulances, enhancing the Army's medical support infrastructure. Geographic impact is national, supporting Army readiness across various deployments. Workforce implications include continued employment for skilled manufacturing labor at AM General LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price negotiation and potentially increases costs for taxpayers.
Reliance on a single supplier for critical medical equipment poses supply chain risks.
Lack of competitive pressure may reduce incentives for innovation or cost reduction by the contractor.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Delivery order is for a specific quantity of essential medical vehicles, addressing a clear need.
Contractor has a known track record in producing HMMWV variants.

Sector Analysis

The military armored vehicle manufacturing sector is characterized by high barriers to entry, specialized technology, and significant government investment. Contracts in this area often involve complex engineering, stringent quality control, and long production cycles. AM General LLC is a well-established player in this niche, particularly known for its HMMWV platform. Spending in this sector is driven by defense modernization priorities and operational readiness requirements.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions. As a sole-source award to a large prime contractor, there is a potential for limited subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime. The impact on the small business ecosystem would depend on AM General's subcontracting strategy and any flow-down requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, delivery schedules, and quality assurance provisions. Transparency is facilitated through contract award databases, though detailed justifications for sole-source awards may have limited public disclosure.

Related Government Programs

HMMWV Production Contracts
Military Ambulance Procurements
Tactical Wheeled Vehicle Modernization
Department of Defense Medical Equipment

Risk Flags

Sole-source award
Potential for higher cost due to lack of competition
Supply chain dependency on a single manufacturer

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $187.5 million to AM GENERAL LLC. DELIVERY ORDER FOR 648 M997A3 HMMWV AMBULANCES

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 $187.5 million.

What is the period of performance?

Start: 2019-04-09. End: 2026-02-28.

What is AM General LLC's track record with HMMWV production and modifications, particularly for ambulance variants?

AM General LLC has a long and extensive history with the High Mobility Multipurpose Wheeled Vehicle (HMMWV) platform, having been the original manufacturer. They have produced tens of thousands of HMMWVs for the U.S. military and allied nations. Their experience includes various configurations, and they have a demonstrated capability in producing specialized variants, including ambulance versions. The M997A3 HMMWV ambulance is an upgrade to existing platforms, indicating a continuation of their established expertise. The company's track record suggests a deep understanding of the platform's engineering, manufacturing processes, and performance requirements, making them a logical, albeit sole-source, provider for such specialized vehicles.

How does the per-unit cost of these HMMWV ambulances compare to similar military medical vehicles or previous procurements?

The per-unit cost of approximately $290,700 for these M997A3 HMMWV ambulances is difficult to directly compare without detailed specifications and context from other procurements. Military armored vehicles, especially those with specialized medical interiors, advanced life support equipment, and robust protection, are inherently expensive. Previous HMMWV ambulance procurements or similar armored ambulance programs by other branches or nations might offer benchmarks, but variations in configuration, technology, and economic conditions (inflation, material costs) make direct comparisons challenging. Generally, specialized military medical platforms command a premium due to their unique requirements and limited production runs compared to commercial vehicles.

What are the primary risks associated with a sole-source award for critical military medical vehicles?

The primary risks associated with a sole-source award for critical military medical vehicles like the M997A3 HMMWV ambulances include potential price inflation due to the lack of competitive bidding, which can lead to higher costs for taxpayers. There's also a risk of reduced contractor incentive to innovate or improve efficiency, as competition is absent. Furthermore, over-reliance on a single supplier can create supply chain vulnerabilities; if the sole source experiences production issues, quality control problems, or financial instability, the military's ability to procure essential medical transport could be severely impacted, potentially jeopardizing readiness and operational capabilities.

What is the expected impact of this contract on the Department of the Army's medical readiness and operational capabilities?

This contract is expected to significantly enhance the Department of the Army's medical readiness and operational capabilities by providing 648 modern, armored HMMWV ambulances. These vehicles are crucial for casualty evacuation (CASEVAC) and medical transport in potentially hostile environments, offering enhanced protection to both patients and medical personnel compared to unarmored or less protected platforms. The delivery of a substantial quantity of these specialized vehicles will bolster the Army's ability to sustain medical operations across various theaters, improve survivability rates for wounded personnel, and ensure that medical units are equipped with reliable and effective tools for their mission, thereby strengthening overall force projection and sustainment.

How does this contract fit into the broader context of military vehicle modernization and procurement trends?

This contract aligns with broader trends in military vehicle modernization, which emphasize enhanced survivability, mobility, and mission-specific capabilities. The procurement of upgraded HMMWV ambulances reflects a continued investment in the HMMWV platform, while also addressing the critical need for protected medical transport. It fits within the Department of Defense's ongoing efforts to modernize its tactical wheeled vehicle fleet to meet evolving threats and operational demands. While newer, more advanced platforms are being developed, the continued procurement and upgrade of proven systems like the HMMWV demonstrate a pragmatic approach to balancing modernization goals with budgetary realities and existing infrastructure.

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: $187,496,909

Exercised Options: $187,496,909

Current Obligation: $187,496,909

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