DoD Awards $713M for 300 Stryker Vehicles to General Dynamics Land Systems

Contract Overview

Contract Amount: $713,398,490 ($713.4M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2023-06-21

End Date: 2025-12-31

Contract Duration: 924 days

Daily Burn Rate: $772.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: 300 STRYKER DVH NEW AND EXCHANGE VEHICLES IN SUPPORT OF STRYKER BRIGADE COMBAT TEAM (SBCT) 5TH BRIGADE PRODUCTION CONTRACT

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $713.4 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: 300 STRYKER DVH NEW AND EXCHANGE VEHICLES IN SUPPORT OF STRYKER BRIGADE COMBAT TEAM (SBCT) 5TH BRIGADE PRODUCTION CONTRACT Key points: 1. Significant investment in armored vehicle modernization for Stryker Brigade Combat Teams. 2. Sole-source award to General Dynamics raises questions about price discovery and competition. 3. Long-term contract (2025) suggests sustained demand for these specialized vehicles. 4. Focus on production contract for new and exchange vehicles indicates fleet sustainment needs.

Value Assessment

Rating: questionable

The contract value of $713.4 million for 300 vehicles, averaging approximately $2.38 million per vehicle, requires careful benchmarking against similar armored vehicle procurements. Without competitive bidding, it's difficult to ascertain if this represents optimal value.

Cost Per Unit: $2,377,992

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This limits the government's ability to explore alternative solutions or leverage competitive pricing, potentially leading to higher costs.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these specialized military vehicles, as market forces are not driving down the price.

Public Impact

Enhances the combat readiness and operational capabilities of the U.S. Army's Stryker Brigade Combat Teams. Supports the domestic defense industrial base and associated manufacturing jobs. Ensures the availability of critical armored vehicles for national defense missions. Potential for follow-on contracts or modifications could extend the overall program value.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
High per-unit cost requires thorough justification.
Long contract duration may not reflect evolving technological needs.
Lack of small business participation noted.

Positive Signals

Addresses critical modernization needs for SBCTs.
Secures production capacity for essential military hardware.
Supports a key defense contractor's capabilities.

Sector Analysis

The defense sector, particularly armored vehicle manufacturing, is characterized by high R&D costs, long production cycles, and significant government reliance. Spending benchmarks for similar platforms are crucial for evaluating value, though often proprietary.

Small Business Impact

The data indicates no specific set-aside for small businesses in this sole-source contract. Efforts should be made to ensure subcontracting opportunities are available to small businesses within the defense industrial base.

Oversight & Accountability

Oversight will be critical to ensure General Dynamics meets delivery schedules and quality standards. The Department of Defense's contracting authority should scrutinize cost justifications given the sole-source nature of the award.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited transparency in pricing
Dependency on a single supplier
Long-term commitment without clear exit strategy
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $713.4 million to GENERAL DYNAMICS LAND SYSTEMS INC.. 300 STRYKER DVH NEW AND EXCHANGE VEHICLES IN SUPPORT OF STRYKER BRIGADE COMBAT TEAM (SBCT) 5TH BRIGADE PRODUCTION CONTRACT

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 $713.4 million.

What is the period of performance?

Start: 2023-06-21. End: 2025-12-31.

What is the justification for the sole-source award, and how does the government ensure fair and reasonable pricing without competition?

Sole-source awards are typically justified when only one responsible source can fulfill the requirement, often due to unique capabilities or urgent needs. The government ensures fair and reasonable pricing through detailed cost analysis, review of historical pricing, and negotiation with the sole provider. However, the absence of competitive bids inherently reduces the pressure to achieve the lowest possible price.

How does the per-unit cost of these Stryker vehicles compare to similar armored vehicle procurements by the U.S. or allied nations?

Benchmarking the $2.38 million per-unit cost requires access to detailed cost data for comparable armored vehicles, which is often sensitive. Factors like specific configurations, technology integration, and production volume significantly influence unit prices. A comprehensive review against publicly available data or intelligence estimates for similar platforms is necessary to assess if this price is competitive.

What are the long-term implications of this contract on the Army's fleet modernization strategy and budget?

This contract represents a significant commitment to the Stryker platform, potentially influencing future modernization decisions and budget allocations. It ensures the continued fielding of SBCTs with updated vehicles, but also ties a substantial portion of the budget to a specific platform. The long-term effectiveness depends on the platform's continued relevance and the ability to integrate future upgrades within this framework.

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: FIXED PRICE INCENTIVE (L)

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: $713,398,490

Exercised Options: $713,398,490

Current Obligation: $713,398,490

Subaward Activity

Number of Subawards: 118

Total Subaward Amount: $18,361,939

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV20D0005

IDV Type: IDC

Timeline