DoD's $258M wholesale supply contract for FY19 awarded to General Dynamics Land Systems Inc

Contract Overview

Contract Amount: $258,416,403 ($258.4M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2019-02-28

End Date: 2021-01-16

Contract Duration: 688 days

Daily Burn Rate: $375.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS UNILATERAL AWARD OF TASK ORDER W56HZV-19-F-0280 IS TO FUND PERIOD 1 (FISCAL YEAR 2019 (FY19)) WHOLESALE SUPPLY IN ACCORDANCE WITH THE CONTRACT TERMS ESTABLISHED UNDER REQUIREMENTS CONTRACT W56HZV-19-D-0054.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $258.4 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: THE PURPOSE OF THIS UNILATERAL AWARD OF TASK ORDER W56HZV-19-F-0280 IS TO FUND PERIOD 1 (FISCAL YEAR 2019 (FY19)) WHOLESALE SUPPLY IN ACCORDANCE WITH THE CONTRACT TERMS ESTABLISHED UNDER REQUIREMENTS CONTRACT W56HZV-19-D-0054. Key points: 1. Contract awarded for wholesale supply of military equipment, indicating a need for sustained logistical support. 2. The contract is a delivery order under an existing requirements contract, suggesting a pre-established relationship and framework. 3. A firm fixed-price contract type aims to provide cost certainty for the government. 4. The duration of the contract period is substantial, spanning 688 days. 5. The award was not competed, raising questions about potential cost efficiencies and market engagement. 6. The primary contractor, General Dynamics Land Systems Inc., is a major player in the defense manufacturing sector.

Value Assessment

Rating: questionable

The contract value of $258.4 million for a 688-day period for wholesale supply is significant. Without specific details on the items supplied or their unit costs, a direct value-for-money assessment is challenging. However, the lack of competition for this substantial award warrants scrutiny. Benchmarking against similar wholesale supply contracts for military equipment would be necessary to determine if the pricing is competitive and represents good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order under an existing requirements contract. The data indicates it was 'NOT COMPETED.' This means that the Department of the Army did not solicit bids from multiple vendors for this specific task order. While sole-source awards can be justified under certain circumstances, such as when a specific contractor possesses unique capabilities or when it's a follow-on to a previously competed effort, the lack of open competition limits the government's ability to explore the full range of market offerings and potentially secure more favorable pricing.

Taxpayer Impact: The lack of competition for this large contract means taxpayers may not have benefited from the cost savings that could arise from a competitive bidding process. This could potentially lead to higher overall spending for the required supplies.

Public Impact

The primary beneficiary of this contract is the Department of the Army, ensuring the availability of necessary military equipment. The contract supports the wholesale supply chain for military vehicles and related components. The geographic impact is primarily within the United States, supporting military logistics operations. The contract sustains jobs within the defense manufacturing sector, particularly at General Dynamics Land Systems Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract value raises concerns about potential overpayment and missed opportunities for cost savings.
The sole-source nature of the award requires careful justification to ensure it aligns with procurement regulations and best practices.
Without detailed performance metrics, it's difficult to assess the efficiency and effectiveness of the wholesale supply operations under this contract.

Positive Signals

The use of a firm fixed-price contract provides cost predictability for the government.
Awarding a delivery order under an existing requirements contract suggests a streamlined process and potentially a pre-vetted supplier.
The contractor, General Dynamics Land Systems Inc., is an established entity with significant experience in defense manufacturing.

Sector Analysis

The contract falls within the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' sector, a specialized area of the broader defense industrial base. This sector is characterized by high barriers to entry, significant R&D investment, and long-standing relationships between government agencies and prime contractors. Spending in this area is driven by national security requirements and modernization efforts. Comparable spending benchmarks would typically involve other large-scale supply contracts for major defense platforms.

Small Business Impact

The data indicates that small business participation (sb) was false and there was no small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses, and opportunities for small business subcontracting may be limited or not explicitly mandated within this specific award. Further investigation into the prime contractor's subcontracting plan would be needed to understand the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which places the cost risk on the contractor. Transparency regarding the justification for the sole-source award and the specific goods and services procured would be key areas for assessment. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Logistics and Supply Chain Management
Military Vehicle Procurement Programs
Requirements Contracts
Defense Industrial Base Support

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Limited transparency on specific items procured

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $258.4 million to GENERAL DYNAMICS LAND SYSTEMS INC.. THE PURPOSE OF THIS UNILATERAL AWARD OF TASK ORDER W56HZV-19-F-0280 IS TO FUND PERIOD 1 (FISCAL YEAR 2019 (FY19)) WHOLESALE SUPPLY IN ACCORDANCE WITH THE CONTRACT TERMS ESTABLISHED UNDER REQUIREMENTS CONTRACT W56HZV-19-D-0054.

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 $258.4 million.

What is the period of performance?

Start: 2019-02-28. End: 2021-01-16.

What specific military equipment or components were supplied under this wholesale supply contract?

The provided data indicates the contract is for 'WHOLESALE SUPPLY IN ACCORDANCE WITH THE CONTRACT TERMS ESTABLISHED UNDER REQUIREMENTS CONTRACT W56HZV-19-D-0054.' While the National Industrial Classification (NAICS) code 336992 points to 'Military Armored Vehicle, Tank, and Tank Component Manufacturing,' the specific items procured under this particular delivery order are not detailed. This information is crucial for understanding the nature of the supply chain supported and for conducting a more granular value analysis. Without this specificity, it's challenging to benchmark the cost against comparable items or assess the strategic importance of the supplied goods.

What is the historical spending pattern for wholesale supply of military equipment by the Department of the Army?

The provided data focuses on a single delivery order for FY19. To understand historical spending patterns for wholesale supply of military equipment by the Department of the Army, a broader analysis of past contracts under the parent requirements contract (W56HZV-19-D-0054) and similar requirements contracts would be necessary. This would involve examining annual spending trends, the number and value of awards, and the primary contractors involved over several fiscal years. Such an analysis would help identify any significant increases or decreases in spending, potential shifts in procurement strategies, and the overall market dynamics within this segment of defense logistics.

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

The data explicitly states the contract was 'NOT COMPETED' and is a 'sole-source' award. The justification for a sole-source award typically stems from specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source capable of providing the required supplies or services, or when urgency precludes full and open competition. Given this is a delivery order under an existing requirements contract, the justification might be that the original requirements contract was competed, and this delivery order is simply exercising an option or fulfilling a need within the scope of that pre-established contract. However, without the specific justification document, it remains unclear if this was the most cost-effective approach for this particular task order.

How does the performance of General Dynamics Land Systems Inc. on previous contracts compare to industry benchmarks?

Assessing the performance of General Dynamics Land Systems Inc. requires access to historical contract performance data, such as past performance ratings, CPARS (Contractor Performance Assessment Reporting System) reports, and any documented instances of contract disputes or awards. The provided data does not include this information. A comprehensive review would involve analyzing their track record on similar defense supply contracts, looking at on-time delivery rates, quality of goods, and adherence to contract terms. Benchmarking against other major defense contractors in the armored vehicle and component manufacturing sector would provide context on their relative performance and reliability.

What are the potential risks associated with a sole-source award for military equipment supply?

The primary risks associated with a sole-source award for military equipment supply include a lack of price competition, which can lead to higher costs for the government and taxpayers. There's also a potential for reduced innovation and service quality, as the contractor may face less pressure to improve. Furthermore, sole-source awards can create dependency on a single supplier, which can be a strategic vulnerability if that supplier experiences production issues or financial difficulties. Ensuring robust oversight and clear performance standards becomes even more critical in sole-source situations to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $258,416,403

Exercised Options: $258,416,403

Current Obligation: $258,416,403

Actual Outlays: $23,824

Subaward Activity

Number of Subawards: 133

Total Subaward Amount: $65,275,218

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV19D0054

IDV Type: IDC

Timeline