DoD Awards $75.5M for Abrams Transmission Upgrades, Sole-Sourced to Allison Transmission Inc

Contract Overview

Contract Amount: $75,503,538 ($75.5M)

Contractor: Allison Transmission Inc

Awarding Agency: Department of Defense

Start Date: 2020-03-27

End Date: 2024-04-30

Contract Duration: 1,495 days

Daily Burn Rate: $50.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ABRAMS TRANSMISSION UPGRADES

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $75.5 million to ALLISON TRANSMISSION INC for work described as: ABRAMS TRANSMISSION UPGRADES Key points: 1. Significant investment in critical armored vehicle technology. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long-term contract duration (1495 days) suggests sustained need. 4. Focus on mechanical power transmission equipment manufacturing.

Value Assessment

Rating: questionable

The award amount of $75.5M for transmission upgrades is substantial. Without competitive bidding, it's difficult to assess if this represents fair market value compared to similar contracts or industry benchmarks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Allison Transmission Inc. This lack of competition limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition for this significant defense contract means taxpayers may not be receiving the best possible price.

Public Impact

Ensures continued operational readiness of Abrams tanks. Supports a key defense contractor and its manufacturing capabilities. Potential for extended lead times or higher costs due to sole-sourcing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Lack of transparency in pricing.
Long contract duration without re-competition.

Positive Signals

Addresses critical equipment upgrade needs.
Supports established supplier relationship.

Sector Analysis

This contract falls within the Defense sector, specifically related to mechanical power transmission equipment. Spending benchmarks for such specialized military hardware are often high, but competitive pricing is crucial.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award, as it was a sole-source procurement from a large manufacturer.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the Department of Defense obtained the best value and that the justification for not competing the contract is sound.

Related Government Programs

Mechanical Power Transmission Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source procurement.
Potential for inflated pricing.
Limited transparency.
Long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.5 million to ALLISON TRANSMISSION INC. ABRAMS TRANSMISSION UPGRADES

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION 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 $75.5 million.

What is the period of performance?

Start: 2020-03-27. End: 2024-04-30.

What is the justification for the sole-source award, and has the government explored alternative competitive strategies?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one vendor can meet. The government should have documented these reasons thoroughly. Exploring alternative competitive strategies, even for specialized components, is crucial to ensure fair pricing and encourage innovation.

How does the per-unit cost of these transmission upgrades compare to industry benchmarks or previous procurements?

Without competitive bids, establishing a precise per-unit cost benchmark is challenging. A thorough analysis would involve comparing the contract's pricing structure against historical data for similar upgrades, factoring in inflation and technological advancements. If data is unavailable, a cost realism analysis by the agency is essential.

What is the long-term impact on Abrams tank readiness and operational effectiveness given this sole-source award?

While the award ensures upgrades, the sole-source nature could pose a long-term risk if the sole provider faces production issues or significantly increases prices. Ensuring robust contract management and exploring future competitive opportunities for subsequent upgrades will be key to maintaining sustained readiness and cost-effectiveness.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Mechanical Power Transmission Equipment Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Allison Transmission Holdings, Inc.

Address: ONE ALLISON WAY, INDIANAPOLIS, IN, 46222

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: $75,503,538

Exercised Options: $75,503,538

Current Obligation: $75,503,538

Actual Outlays: $27,198,328

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV20D0043

IDV Type: IDC

Timeline