DoD's $45.4M Abrams, Bradley, Wolverine vehicle repair contract awarded to General Dynamics Land Systems Inc

Contract Overview

Contract Amount: $45,418,122 ($45.4M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2024-07-31

Contract Duration: 1,399 days

Daily Burn Rate: $32.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THREE YEAR TEAM ARMOR PROGRAM (TAP)CONTRACT TO INCLUDE ONE BASE YEAR WITH TWO OPTION PERIODS FOR 12-MONTHS EACH FOR THE RECEIPT, INSPECTION, TESTING, DIAGNOSIS, REPAIR, STORAGE, ISSUE PARTS IN SUPPORT OF ABRAMS, BRADLEY AND WOLVERINE VEHICLES.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $45.4 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: THREE YEAR TEAM ARMOR PROGRAM (TAP)CONTRACT TO INCLUDE ONE BASE YEAR WITH TWO OPTION PERIODS FOR 12-MONTHS EACH FOR THE RECEIPT, INSPECTION, TESTING, DIAGNOSIS, REPAIR, STORAGE, ISSUE PARTS IN SUPPORT OF ABRAMS, BRADLEY AND WOLVERINE VEHICLES. Key points: 1. Contract focuses on essential maintenance and repair for critical armored vehicle platforms. 2. General Dynamics Land Systems Inc. is a primary contractor for Abrams and Bradley vehicles, suggesting a strong incumbent advantage. 3. The contract's cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 4. Performance is tied to the operational readiness of key Army ground combat systems. 5. This contract falls within the broader defense logistics and maintenance sector. 6. The contract duration of nearly four years indicates a significant, long-term support requirement.

Value Assessment

Rating: fair

The contract's total value of approximately $45.4 million over three years for the repair and support of Abrams, Bradley, and Wolverine vehicles appears reasonable given the complexity and specialized nature of these armored platforms. However, a cost-plus-fixed-fee (CPFF) contract type can present risks if not managed diligently, as it allows for the reimbursement of costs plus a fixed fee, potentially leading to higher-than-expected expenditures if cost controls are weak. Benchmarking against similar sustainment contracts for armored vehicles would provide a clearer picture of value for money, but the specialized nature of these systems limits direct comparisons.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bidders suggests a degree of competition, though the specific details of the bidding process and the capabilities of the non-awarded bidder are not provided. A competitive process is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down costs and improving the quality of services offered.

Public Impact

The primary beneficiaries are the U.S. Army units operating Abrams, Bradley, and Wolverine vehicles, ensuring their operational readiness. Services include receipt, inspection, testing, diagnosis, repair, and storage of parts for these armored vehicles. The geographic impact is primarily centered around the locations where these vehicles are stationed and maintained, likely within the continental United States. Workforce implications include the need for skilled technicians and logistics personnel experienced in heavy vehicle maintenance and defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may lead to cost escalation if not tightly managed.
Reliance on a single contractor for critical repair services could pose supply chain risks.
Potential for scope creep if repair requirements are not clearly defined and controlled.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Contractor is a known entity with established expertise in these specific vehicle platforms.
Long-term contract provides stability for sustainment operations.

Sector Analysis

This contract operates within the defense logistics and maintenance sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high technical barriers to entry, specialized expertise, and significant government spending. The market for armored vehicle sustainment is relatively concentrated, often dominated by original equipment manufacturers or their authorized partners due to the proprietary nature of the technology and the need for specialized knowledge. Comparable spending benchmarks are difficult to establish precisely without detailed service scope, but overall defense logistics spending runs into billions annually.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). While General Dynamics Land Systems Inc. is a large business, there may be opportunities for small businesses to participate as subcontractors, particularly in specialized component repair or logistics support. The extent of small business subcontracting will depend on the prime contractor's strategy and the availability of qualified small business vendors in the supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance metrics, delivery schedules, and quality standards. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Abrams Main Battle Tank Sustainment
Bradley Fighting Vehicle Systems Support
Army Logistics Modernization Programs
Ground Vehicle Maintenance and Repair Services
Defense Industrial Base Sustainment

Risk Flags

Cost-plus-fixed-fee contract type carries inherent risk of cost overruns.
Potential for vendor lock-in due to specialized nature of vehicle support.
Dependence on a single prime contractor for critical sustainment services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.4 million to GENERAL DYNAMICS LAND SYSTEMS INC.. THREE YEAR TEAM ARMOR PROGRAM (TAP)CONTRACT TO INCLUDE ONE BASE YEAR WITH TWO OPTION PERIODS FOR 12-MONTHS EACH FOR THE RECEIPT, INSPECTION, TESTING, DIAGNOSIS, REPAIR, STORAGE, ISSUE PARTS IN SUPPORT OF ABRAMS, BRADLEY AND WOLVERINE VEHICLES.

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 $45.4 million.

What is the period of performance?

Start: 2020-10-01. End: 2024-07-31.

What is the track record of General Dynamics Land Systems Inc. in fulfilling similar defense maintenance contracts?

General Dynamics Land Systems Inc. (GDLS) has a long and extensive track record as a primary contractor for the Abrams Main Battle Tank and the Bradley Fighting Vehicle, both of which are covered under this contract. GDLS is the original equipment manufacturer (OEM) for these platforms and has been responsible for their production, upgrades, and sustainment for decades. Their experience includes managing complex logistics, providing spare parts, and performing extensive repair and overhaul services. While specific performance metrics for past contracts are not detailed here, GDLS's continued role as a key supplier and maintainer for these critical systems suggests a generally positive performance history in meeting the demanding requirements of the U.S. Army. However, like any large defense contractor, they may have faced scrutiny or challenges on specific programs, which would require deeper investigation into individual contract performance reviews and government accountability reports.

How does the pricing structure (Cost Plus Fixed Fee) compare to other vehicle maintenance contracts, and what are the associated risks?

The Cost Plus Fixed Fee (CPFF) pricing structure is common in defense contracts where the scope of work can be uncertain or involve significant research and development, or complex repair scenarios. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers greater flexibility for the government if requirements change, but it carries a higher risk of cost overruns for the government. The fixed fee, however, provides the contractor with a stable profit margin regardless of actual costs, which can reduce their incentive to control expenses. The primary risk for taxpayers is that costs could escalate beyond initial projections, leading to a higher total contract value than if a fixed-price approach had been feasible. Effective oversight, stringent cost accounting standards, and clear definition of allowable costs are crucial to mitigate these risks and ensure value for money.

What is the potential impact of this contract on the operational readiness of the Army's armored vehicle fleet?

This contract is directly linked to the operational readiness of the Army's Abrams, Bradley, and Wolverine vehicle fleets. By providing essential services such as inspection, diagnosis, repair, and parts support, the contract ensures that these critical platforms are maintained in a combat-ready state. A well-executed contract contributes to minimizing downtime for vehicles undergoing maintenance, ensuring timely availability of spare parts, and performing necessary repairs efficiently. Conversely, any performance issues, delays, or quality deficiencies in the contractor's execution could negatively impact the availability of these vehicles for training exercises, deployments, and actual combat operations. The sustained operational readiness of armored units is a cornerstone of the Army's ground combat capability, making the effective performance of this contract vital.

Are there any significant historical spending patterns related to the sustainment of these specific vehicle platforms?

Historical spending on the sustainment of platforms like the Abrams and Bradley has been substantial and consistent over many years, reflecting their long service lives and critical roles in the U.S. Army's arsenal. These vehicles require ongoing maintenance, upgrades, and parts replacement due to extensive use, harsh operating environments, and technological evolution. Annual spending on sustainment for major ground combat systems often runs into hundreds of millions or even billions of dollars across the entire fleet, encompassing everything from routine maintenance and component repair to major overhauls and modernization programs. Contracts for repair and logistics support, similar to the one awarded here, represent a significant portion of this overall sustainment expenditure. Trends often show increasing sustainment costs as vehicles age, unless offset by modernization efforts or more efficient maintenance strategies.

What are the potential risks associated with relying on a single primary contractor for the repair and support of these key armored vehicles?

Relying on a single primary contractor, even one with extensive experience like General Dynamics Land Systems Inc., introduces several potential risks. Firstly, there's a risk of vendor lock-in, where the government becomes heavily dependent on the incumbent contractor, potentially diminishing future competitive leverage and increasing long-term costs. Secondly, supply chain disruptions affecting the prime contractor could have a cascading effect on the availability of parts and services, impacting vehicle readiness. Thirdly, a lack of direct competition for ongoing support could reduce the incentive for the contractor to innovate or aggressively control costs. Finally, if the contractor experiences financial difficulties or significant performance issues, the government may face substantial challenges in transitioning support to an alternative provider, potentially leading to prolonged periods of reduced operational capability for the affected vehicle fleets.

Industry Classification

NAICS: Other Services (except Public Administration) › Automotive Repair and Maintenance › All Other Automotive Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W56HZV19R0043

Offers Received: 2

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: $45,418,122

Exercised Options: $45,418,122

Current Obligation: $45,418,122

Actual Outlays: $7,808,842

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $6,169,525

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline