DoD Awards GDLS $1.08B for 5.94M Hours of Armored Vehicle Technical Support
Contract Overview
Contract Amount: $1,077,964,757 ($1.1B)
Contractor: General Dynamics Land Systems Inc.
Awarding Agency: Department of Defense
Start Date: 2022-02-28
End Date: 2027-08-26
Contract Duration: 2,005 days
Daily Burn Rate: $537.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PURPOSE OF THIS AWARD IS A NEW OPTION CONTRACT TO GENERAL DYNAMICS LAND SYSTEMS (GDLS) FOR 5,940,169 HOURS OF SYSTEM TECHNICAL SUPPORT (STS)/SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS).
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $1.08 billion to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: PURPOSE OF THIS AWARD IS A NEW OPTION CONTRACT TO GENERAL DYNAMICS LAND SYSTEMS (GDLS) FOR 5,940,169 HOURS OF SYSTEM TECHNICAL SUPPORT (STS)/SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS). Key points: 1. Significant award to General Dynamics Land Systems for essential armored vehicle support. 2. Sole-source award raises questions about price discovery and potential for overpayment. 3. Long-term contract (2022-2027) indicates critical, ongoing need for sustainment. 4. High value suggests substantial taxpayer investment in defense readiness.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. Without competitive bidding, it's difficult to benchmark pricing against market alternatives. The total value of $1.08 billion for 5.94 million hours requires careful scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Dynamics Land Systems. This lack of competition limits price discovery and may result in higher costs for the government.
Taxpayer Impact: The absence of competition for a contract of this magnitude means taxpayers may not be receiving the best possible value, potentially leading to inflated costs for essential defense support.
Public Impact
Ensures continued operational readiness of critical armored vehicle fleets. Supports jobs within the defense industrial base, particularly in Michigan. Long-term commitment to sustainment may indicate future modernization needs. Potential for cost overruns due to sole-source, cost-plus contract structure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- High contract value
Positive Signals
- Essential system support
- Long-term sustainment
- Supports critical defense assets
Sector Analysis
This contract falls under the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. Spending in defense sustainment is crucial for maintaining readiness, but sole-source awards in this area warrant close oversight to ensure cost-effectiveness.
Small Business Impact
The awardee, General Dynamics Land Systems Inc., is a large business. There is no indication that small businesses were involved in this specific contract action, nor is there a stated requirement for subcontracting with small businesses.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of the Army to ensure GDLS is performing efficiently and that costs are reasonable. Auditing of cost-plus contracts is critical for accountability.
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 limits competition and price discovery.
- Cost Plus Fixed Fee contract type can incentivize higher costs.
- Lack of transparency in pricing due to non-competitive nature.
- Potential for contractor to not achieve maximum efficiency.
- Long-term reliance on a single vendor.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.08 billion to GENERAL DYNAMICS LAND SYSTEMS INC.. PURPOSE OF THIS AWARD IS A NEW OPTION CONTRACT TO GENERAL DYNAMICS LAND SYSTEMS (GDLS) FOR 5,940,169 HOURS OF SYSTEM TECHNICAL SUPPORT (STS)/SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS).
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 $1.08 billion.
What is the period of performance?
Start: 2022-02-28. End: 2027-08-26.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the incumbent. To ensure fair pricing, the government should conduct thorough cost analyses, review historical pricing, and potentially engage independent cost estimators. Regular performance reviews and audits are also crucial for accountability.
How will the Cost Plus Fixed Fee structure be managed to prevent cost overruns and ensure value for taxpayer money?
Managing a Cost Plus Fixed Fee contract requires stringent oversight. The government must establish clear performance metrics, conduct regular audits of incurred costs, and closely monitor the fixed fee component. Incentive clauses tied to cost savings or performance improvements can also help mitigate overrun risks and ensure value.
What is the long-term strategy for armored vehicle sustainment, and will future requirements be competed?
The long-term strategy for armored vehicle sustainment should prioritize competition where feasible to drive innovation and cost savings. Future requirements should be evaluated for potential competition, perhaps through modular contracting approaches or by encouraging new market entrants. A clear roadmap for technology insertion and upgrades should also be defined.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV20R0216
Offers Received: 1
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: $1,098,969,174
Exercised Options: $1,077,964,757
Current Obligation: $1,077,964,757
Actual Outlays: $1,358,214
Subaward Activity
Number of Subawards: 39
Total Subaward Amount: $241,762,944
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-02-28
Current End Date: 2027-08-26
Potential End Date: 2027-08-26 12:08:00
Last Modified: 2025-12-19
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