Army Spends $270M on 131 HMMWVs from AM General LLC, Facing Limited Competition
Contract Overview
Contract Amount: $269,965,371 ($270.0M)
Contractor: AM General LLC
Awarding Agency: Department of Defense
Start Date: 2021-07-21
End Date: 2026-05-01
Contract Duration: 1,745 days
Daily Burn Rate: $154.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCURE 131 HMMWV
Place of Performance
Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $270.0 million to AM GENERAL LLC for work described as: PROCURE 131 HMMWV Key points: 1. Significant investment in tactical vehicles highlights ongoing military modernization efforts. 2. Sole reliance on AM General LLC for this procurement raises questions about market competition. 3. The firm-fixed-price contract structure aims to control costs, but limited competition may inflate prices. 4. This spending falls within the broader defense sector's substantial allocation for vehicle procurement.
Value Assessment
Rating: fair
The contract value of $270 million for 131 HMMWVs suggests a per-unit cost of approximately $2.06 million. Benchmarking this against similar specialized military vehicle procurements is difficult without more detailed specifications, but it appears to be within a plausible range for highly customized armored vehicles.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed, indicating a limited competition approach. This likely stems from specific requirements or existing relationships with AM General LLC. The lack of open competition may have limited price discovery and potentially led to a higher price than could have been achieved through a fully competitive process.
Taxpayer Impact: Taxpayer funds are being used for this procurement. While essential for defense, the lack of competition means taxpayers may not be receiving the best possible price for these vehicles.
Public Impact
Ensures operational readiness for Army units requiring robust tactical vehicles. Supports domestic manufacturing jobs within the defense industrial base. Contributes to the overall modernization and capability of the U.S. Army's fleet. Potential for increased costs due to limited competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may result in higher costs.
- Lack of transparency in pricing due to sole-source nature.
- Potential for vendor lock-in with AM General LLC.
Positive Signals
- Procurement supports critical military operational needs.
- Firm-fixed-price contract provides cost certainty.
- Delivery orders indicate a structured approach to fulfilling requirements.
Sector Analysis
This procurement falls under the Defense sector, specifically military vehicle manufacturing. Defense spending on equipment like HMMWVs is a significant portion of the federal budget, with benchmarks varying widely based on vehicle type, quantity, and technological sophistication.
Small Business Impact
There is no indication in the provided data that small businesses were involved in this specific procurement. The contract appears to be directly with a large prime contractor, AM General LLC.
Oversight & Accountability
The Department of the Army is responsible for overseeing this contract. Standard oversight mechanisms for defense procurements would apply, including contract performance monitoring and financial accountability, though the limited competition aspect warrants closer scrutiny.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for inflated pricing due to limited competition.
- Lack of transparency in the procurement process.
- Risk of vendor lock-in and reduced future negotiating power.
- Dependency on a single supplier for critical military assets.
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 $270.0 million to AM GENERAL LLC. PROCURE 131 HMMWV
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 $270.0 million.
What is the period of performance?
Start: 2021-07-21. End: 2026-05-01.
What specific factors justified the limited competition for this HMMWV procurement, and were alternative solutions considered?
The justification for limited competition typically involves factors such as unique technical requirements, urgent needs, or the unavailability of other sources. Without further documentation, it's unclear if alternative HMMWV variants or different vehicle types were assessed. A thorough review would examine the technical data package and any sole-source justifications submitted by the Army to ensure necessity and explore if any aspects could have been opened to broader competition.
How does the per-unit cost of these HMMWVs compare to similar armored vehicle procurements, considering the limited competition?
Benchmarking the per-unit cost of these HMMWVs is challenging without specific technical details and a broader market comparison. However, limited competition often leads to prices above what might be achieved in a fully open market. A detailed cost analysis comparing this contract's pricing to other specialized military vehicle contracts, adjusted for features and quantities, would be necessary to determine if the price is reasonable given the competitive landscape.
What is the long-term strategic impact of relying on a single source for critical HMMWV components or platforms?
Long-term reliance on a single source like AM General LLC for HMMWVs can create strategic risks, including potential supply chain vulnerabilities, reduced innovation due to lack of competitive pressure, and increased long-term costs. It may also limit the government's flexibility in adopting newer technologies or alternative platforms. Diversifying the supplier base or fostering competition for future procurements could mitigate these risks and ensure better value.
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
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: $602,795,246
Exercised Options: $602,478,345
Current Obligation: $269,965,371
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: 2021-07-21
Current End Date: 2026-05-01
Potential End Date: 2026-05-01 12:05:00
Last Modified: 2026-01-15
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