Department of the Army awards $37.2M for HMMWV vehicles to AM General LLC, citing FMS cases

Contract Overview

Contract Amount: $37,205,484 ($37.2M)

Contractor: AM General LLC

Awarding Agency: Department of Defense

Start Date: 2019-09-16

End Date: 2022-03-31

Contract Duration: 927 days

Daily Burn Rate: $40.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M1151A1B1 HMMWV (179 EA) AND M1152 HMMWV (15 EA) FOR IRAQ, REFERENCE FMS CASES 7N-B-ABX AND 7N-B-ABZ

Place of Performance

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

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $37.2 million to AM GENERAL LLC for work described as: M1151A1B1 HMMWV (179 EA) AND M1152 HMMWV (15 EA) FOR IRAQ, REFERENCE FMS CASES 7N-B-ABX AND 7N-B-ABZ Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The award was not competed, raising questions about potential price efficiencies. 3. Delivery order issued under existing Foreign Military Sales (FMS) cases, suggesting a pre-established relationship. 4. The contract duration of 927 days spans over two fiscal years. 5. The primary contractor, AM General LLC, is a known entity in military vehicle manufacturing. 6. The vehicles are destined for Iraq, indicating an international military support role.

Value Assessment

Rating: fair

The contract value of $37.2 million for 194 HMMWV vehicles (179 M1151A1B1 and 15 M1152) appears to be within a reasonable range for specialized military equipment, especially considering potential modifications and support. However, without direct comparable contract data for similar configurations and quantities under competitive bidding, a precise value-for-money assessment is challenging. The firm-fixed-price structure helps mitigate cost overrun risks for the government.

Cost Per Unit: Approximately $191,780 per vehicle (total contract value / total vehicles). This figure should be benchmarked against similar HMMWV variants and international sales to assess competitiveness.

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicated as 'NOT COMPETED'. It was likely awarded under specific circumstances, possibly related to existing Foreign Military Sales (FMS) cases (7N-B-ABX and 7N-B-ABZ) which may have pre-determined procurement channels or specific requirements that limited competition. The lack of competition means there was no opportunity to solicit bids from multiple vendors, potentially impacting price discovery.

Taxpayer Impact: The absence of competition means taxpayers may not have benefited from the potentially lower prices that could have resulted from a bidding process among multiple suppliers.

Public Impact

The primary beneficiaries are the Iraqi security forces, who will receive the HMMWV vehicles for their operational needs. The services delivered include the provision of 179 M1151A1B1 and 15 M1152 HMMWV vehicles. The geographic impact is focused on Iraq, supporting military operations in that region. The contract supports the defense industrial base, specifically the manufacturing sector for armored vehicles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competed contract.
Reliance on a single source for critical vehicle supply could pose a risk if the contractor faces production issues.
The specific configuration and intended use for foreign military sales might involve unique requirements not easily met by other vendors.

Positive Signals

Awarded to a known and experienced manufacturer of HMMWV vehicles, AM General LLC.
Firm-fixed-price contract type provides cost certainty for the government.
Procurement is linked to established FMS cases, suggesting alignment with broader foreign policy and security assistance objectives.

Sector Analysis

This contract falls within the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' sector, a specialized segment of the broader defense industrial base. The market for such vehicles is often characterized by government procurement, with a limited number of prime contractors capable of meeting stringent military specifications. Spending in this sector is driven by national defense needs, modernization programs, and international military sales. Comparable spending benchmarks would typically involve other large-scale procurements of tactical vehicles for domestic or allied forces.

Small Business Impact

The data indicates that this contract was not competed and there is no indication of small business set-asides (ss: false, sb: false). Therefore, this specific award does not appear to directly benefit small businesses through set-aside provisions. However, AM General LLC, as the prime contractor, may engage small businesses as subcontractors for components or services, though this information is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and potentially the Defense Contract Management Agency (DCMA). As a Foreign Military Sales case, additional oversight may be provided by the Defense Security Cooperation Agency (DSCA). Transparency is facilitated through contract databases, but detailed performance metrics and specific oversight activities are not publicly available in this summary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales Program
Tactical Wheeled Vehicles
Armored Vehicle Manufacturing
Department of Defense Procurement
Military Vehicle Sustainment

Risk Flags

Sole-source award
Lack of competition
Potential for unbenchmarked pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.2 million to AM GENERAL LLC. M1151A1B1 HMMWV (179 EA) AND M1152 HMMWV (15 EA) FOR IRAQ, REFERENCE FMS CASES 7N-B-ABX AND 7N-B-ABZ

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 $37.2 million.

What is the period of performance?

Start: 2019-09-16. End: 2022-03-31.

What is the track record of AM General LLC in fulfilling similar HMMWV contracts for the Department of Defense or other FMS cases?

AM General LLC has a long and established history as the original manufacturer of the High Mobility Multipurpose Wheeled Vehicle (HMMWV) for the U.S. military. They have consistently been awarded contracts for the production, modification, and sustainment of various HMMWV variants. Their track record includes numerous domestic and international deliveries, often under sole-source or limited competition scenarios due to the specialized nature of the vehicle and their proprietary knowledge. While specific performance metrics for individual contracts are not always public, their continued role as a primary supplier suggests a generally reliable performance history in meeting production schedules and quality standards for HMMWV platforms.

How does the per-unit cost of these HMMWVs compare to other recent procurements of similar vehicles by the U.S. military or allied nations?

The calculated per-unit cost of approximately $191,780 for these HMMWVs requires careful comparison. Recent procurements of similar tactical vehicles can vary significantly based on configuration, quantity, and the level of competition. For instance, some reports indicate that newer, more advanced light tactical vehicles can cost upwards of $200,000-$300,000 or more. Conversely, simpler variants or larger quantity orders under competitive bids might yield lower per-unit costs. Without knowing the exact specifications of the M1151A1B1 and M1152 variants in this order, and the specific FMS case terms, a definitive benchmark is difficult. However, this price point is within the expected range for specialized, armored military vehicles, though a lack of competition prevents confirming if it represents the best possible value.

What are the primary risks associated with awarding this contract on a sole-source basis, and how are they mitigated?

The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competitive pressure. Taxpayers may not receive the best possible value. Another risk is complacency from the contractor, potentially leading to less focus on efficiency or innovation. Mitigation strategies often include robust negotiation by the contracting agency, leveraging historical pricing data, and imposing strict contract terms, such as firm-fixed-price agreements to cap government liability. For FMS cases, the pricing may also be influenced by agreements between governments or specific requirements dictated by the recipient nation. The government also relies on the contractor's established reputation and past performance.

What is the expected impact of these HMMWVs on the operational capabilities of the Iraqi security forces?

The delivery of M1151A1B1 and M1152 HMMWV variants is expected to significantly enhance the operational capabilities of the Iraqi security forces. The M1151A1B1 is an up-armored variant designed to provide enhanced protection against threats, crucial for personnel transport in high-risk environments. The M1152 is a general troop/cargo transport variant, offering versatility. These vehicles provide mobility, protection, and logistical support, enabling Iraqi forces to conduct a wider range of missions more safely and effectively. Their deployment contributes to the overall security and stability efforts within Iraq by equipping forces with reliable and protected transportation.

How does this contract's value and scope compare to the Army's overall spending on HMMWVs and similar tactical vehicles over the past five years?

This $37.2 million contract for 194 HMMWVs represents a moderate-sized procurement within the broader context of the U.S. Army's spending on tactical vehicles. The Army consistently procures thousands of vehicles annually, including HMMWVs, Joint Light Tactical Vehicles (JLTVs), and other specialized platforms, often totaling billions of dollars over five years. This specific award, being for FMS, is part of a larger international security assistance effort rather than solely domestic force modernization. While significant for the recipient, its value is a fraction of the Army's total vehicle acquisition budget, which also includes substantial investments in the newer JLTV program designed to eventually replace many HMMWV roles.

Are there any specific performance requirements or key performance indicators (KPIs) associated with this contract that are publicly available?

Specific performance requirements and Key Performance Indicators (KPIs) for individual delivery orders, especially those under FMS cases, are typically not made public. Contractual documents would detail specifications for vehicle performance, delivery schedules, and quality standards. However, general expectations for such contracts include timely delivery of vehicles meeting all technical specifications, adherence to safety and operational standards, and proper documentation. The firm-fixed-price nature implies that meeting these defined requirements is paramount for the contractor to receive full payment. Any deviations or failures to meet critical specifications would likely trigger contractual remedies.

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

Parent Company: KPS Capital Partners, LP

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: $37,205,484

Exercised Options: $37,205,484

Current Obligation: $37,205,484

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $2,555,549

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV17D0071

IDV Type: IDC

Timeline