Army awards $124M for 676 HMMWVs from AM General LLC, a sole-source contract
Contract Overview
Contract Amount: $124,067,992 ($124.1M)
Contractor: AM General LLC
Awarding Agency: Department of Defense
Start Date: 2020-05-20
End Date: 2023-10-10
Contract Duration: 1,238 days
Daily Burn Rate: $100.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 676 HMMWVS TO BE BOUGHT
Place of Performance
Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $124.1 million to AM GENERAL LLC for work described as: 676 HMMWVS TO BE BOUGHT Key points: 1. High value award for a significant quantity of military vehicles. 2. Sole-source award to AM General LLC raises questions about competition. 3. Risk associated with reliance on a single supplier for critical equipment. 4. Spending falls within the Defense sector, specifically armored vehicle manufacturing.
Value Assessment
Rating: fair
The total award of $124M for 676 HMMWVs results in a per-unit cost of approximately $183,261. This price needs to be benchmarked against similar military vehicle procurements to assess value.
Cost Per Unit: $183,261
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to AM General LLC. The lack of competition likely limited price discovery and potentially led to a higher cost for taxpayers.
Taxpayer Impact: The absence of competition may have resulted in higher costs for the Department of the Army, impacting taxpayer funds.
Public Impact
Direct impact on military readiness and operational capabilities. Potential for job creation and economic activity within the defense manufacturing sector. Taxpayer funds are allocated to the procurement of essential military equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Potential for overpayment due to lack of competitive bidding.
- Long-term reliance on a single supplier.
Positive Signals
- Procurement of essential military hardware.
- Award to established manufacturer with proven capabilities.
Sector Analysis
This procurement falls under the Defense sector, specifically the manufacturing of military armored vehicles. Spending benchmarks for similar HMMWV procurements would be necessary for a comprehensive value assessment.
Small Business Impact
The data indicates the prime contractor is AM General LLC, a large business. There is no information provided regarding subcontracting opportunities for small businesses on this contract.
Oversight & Accountability
The award was a delivery order under an existing contract, suggesting some level of prior oversight. However, the sole-source nature warrants scrutiny to ensure fair pricing and justification.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
- Limited transparency in price discovery
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, in, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $124.1 million to AM GENERAL LLC. 676 HMMWVS TO BE BOUGHT
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 $124.1 million.
What is the period of performance?
Start: 2020-05-20. End: 2023-10-10.
What is the justification for the sole-source award, and have alternative suppliers been considered?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies typically require detailed documentation outlining the necessity, such as unique capabilities or urgent needs. Without this justification, it's difficult to assess if taxpayers received the best possible value or if alternative, potentially more cost-effective, solutions were overlooked.
How does the per-unit cost of these HMMWVs compare to historically similar procurements or industry benchmarks?
Benchmarking the per-unit cost of $183,261 against historical data and industry standards is essential for evaluating value. If this price is significantly higher than comparable contracts or market rates, it suggests potential overspending. This comparison helps determine if the Department of the Army received a fair price for the vehicles.
What are the long-term implications of relying on a single supplier for this critical military asset?
Long-term reliance on a sole supplier like AM General LLC can create strategic risks, including potential supply chain vulnerabilities and reduced leverage in future negotiations. It may also stifle innovation and competition within the armored vehicle manufacturing sector, potentially impacting future technological advancements and cost efficiencies for the military.
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: $124,067,992
Exercised Options: $124,067,992
Current Obligation: $124,067,992
Subaward Activity
Number of Subawards: 113
Total Subaward Amount: $52,521,538
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV17D0071
IDV Type: IDC
Timeline
Start Date: 2020-05-20
Current End Date: 2023-10-10
Potential End Date: 2023-10-10 12:10:00
Last Modified: 2023-10-10
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