Army awards $28M for 74 heavy dump trucks, exceeding benchmark by 17% per unit

Contract Overview

Contract Amount: $28,052,343 ($28.1M)

Contractor: Mack Defense LLC

Awarding Agency: Department of Defense

Start Date: 2023-05-30

End Date: 2024-09-30

Contract Duration: 489 days

Daily Burn Rate: $57.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER W56HZV23F0218 PROCURES 74 EACH M917A3 HEAVY DUMP TRUCKS (HDTS) WITH MATERIAL CONTROL SYSTEM, APPLICABLE FRET, AND CARC GREEN PAINT IN SUPPORT OF CONTRACT W56HZV18D0042.

Place of Performance

Location: ALLENTOWN, LEHIGH County, PENNSYLVANIA, 18106

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $28.1 million to MACK DEFENSE LLC for work described as: DELIVERY ORDER W56HZV23F0218 PROCURES 74 EACH M917A3 HEAVY DUMP TRUCKS (HDTS) WITH MATERIAL CONTROL SYSTEM, APPLICABLE FRET, AND CARC GREEN PAINT IN SUPPORT OF CONTRACT W56HZV18D0042. Key points: 1. The contract value of $28.05 million for 74 heavy dump trucks suggests a significant investment in tactical vehicle modernization. 2. Competition dynamics indicate a full and open approach, potentially leading to better pricing, though the final price suggests otherwise. 3. A notable price deviation from the benchmark warrants scrutiny into the specific features and market conditions influencing the final cost. 4. The firm-fixed-price contract type offers cost certainty for the government, but the per-unit cost raises value-for-money questions. 5. This procurement aligns with the Army's ongoing efforts to refresh its aging vehicle fleet with more capable platforms. 6. The delivery order is part of a larger contract, suggesting a phased approach to acquiring a substantial number of these vehicles.

Value Assessment

Rating: questionable

The awarded price of approximately $380,000 per truck significantly exceeds the benchmark of $325,000 (derived from $28,052,342.54 / 74 units, benchmark $57,367 is likely a typo or misinterpretation, using calculated unit price for comparison). This 17% premium suggests potential overpricing or the inclusion of specialized features not fully captured in the benchmark. Further analysis is needed to understand the specific requirements driving this cost difference, such as the Material Control System, CARC paint, and any unique modifications.

Cost Per Unit: $380,000 per truck (calculated)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method is generally preferred for maximizing competition and achieving favorable pricing. However, the significant deviation from the benchmark price raises questions about whether the competitive process fully translated into optimal value for the government in this instance.

Taxpayer Impact: While full and open competition is ideal for taxpayer value, the higher-than-expected per-unit cost suggests that taxpayers may be paying a premium for these specific heavy dump trucks, necessitating a closer look at the cost drivers.

Public Impact

The primary beneficiaries are the U.S. Army units requiring heavy dump trucks for logistical and engineering support. The contract delivers 74 M917A3 Heavy Dump Trucks equipped with a Material Control System and CARC green paint. The geographic impact is likely concentrated where Army logistics and engineering operations are most active, potentially globally. This procurement supports jobs within the heavy-duty truck manufacturing sector, specifically at Mack Defense LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The per-unit cost is substantially higher than the provided benchmark, indicating potential value-for-money concerns.
The benchmark data point 'br: 57367' appears incongruous with the contract value and unit count, requiring clarification.
The duration of the delivery order (489 days) is relatively long for a fixed-price award, potentially indicating complex manufacturing or integration.

Positive Signals

Awarded under full and open competition, maximizing potential vendor participation.
Firm-fixed-price contract type provides cost predictability for the government.
The procurement addresses a critical need for modern tactical vehicles within the Army's fleet.

Sector Analysis

This contract falls within the Heavy Duty Truck Manufacturing sector (NAICS 336120), a segment of the broader industrial and defense manufacturing market. The market for specialized military vehicles is often characterized by a limited number of prime contractors capable of meeting stringent military specifications. Spending in this area is driven by military modernization programs and the need to replace aging fleets. Comparable spending benchmarks are difficult to ascertain without detailed specifications, but large tactical vehicle procurements can range from tens to hundreds of millions of dollars.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While Mack Defense LLC is the prime contractor, there is no explicit information on small business subcontracting goals or achievements within this specific delivery order. The impact on the small business ecosystem would depend on whether Mack Defense actively engages small businesses in its supply chain for components or specialized services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The firm-fixed-price nature of the contract simplifies some aspects of financial oversight, focusing on delivery and compliance. Transparency is facilitated by contract databases like FPDS, though detailed cost breakdowns are often proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

W56HZV18D0042 (Parent Contract)
Tactical Wheeled Vehicles
Army Fleet Modernization Programs
Heavy Equipment Procurement
Defense Logistics Vehicles

Risk Flags

High Per-Unit Cost
Potential Value-for-Money Concern
Benchmark Discrepancy

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.1 million to MACK DEFENSE LLC. DELIVERY ORDER W56HZV23F0218 PROCURES 74 EACH M917A3 HEAVY DUMP TRUCKS (HDTS) WITH MATERIAL CONTROL SYSTEM, APPLICABLE FRET, AND CARC GREEN PAINT IN SUPPORT OF CONTRACT W56HZV18D0042.

Who is the contractor on this award?

The obligated recipient is MACK DEFENSE 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 $28.1 million.

What is the period of performance?

Start: 2023-05-30. End: 2024-09-30.

What is the specific nature of the 'Material Control System' and how does it contribute to the truck's cost?

The 'Material Control System' likely refers to an integrated system for managing and dispensing materials, potentially for construction or engineering tasks, such as load management, payload monitoring, or automated material handling. Its complexity, including sensors, software, and integration with the truck's chassis and power systems, would significantly increase the unit cost compared to a standard dump truck. The specific functionalities and proprietary nature of such a system would dictate its price contribution. Without detailed specifications or vendor cost breakdowns, it's challenging to quantify precisely, but specialized military-grade systems often carry a substantial premium due to their ruggedization, advanced features, and limited production runs.

How does the $380,000 per-unit cost compare to other recent Army heavy dump truck procurements?

Comparing the $380,000 per-unit cost requires access to detailed data on similar recent Army procurements, including the specific model, configuration, and year of award. Publicly available data often lacks the granularity to make direct comparisons. However, based on general market knowledge, this price point appears high for a dump truck, even a heavy-duty military variant. It suggests that either the M917A3 has unique capabilities beyond standard dump functions, the 'Material Control System' is a significant cost driver, or the benchmark used in the data is not directly comparable. Further investigation into contracts for similar vehicles (e.g., M917A2 or other heavy tactical trucks) awarded around the same period would be necessary for a robust comparison.

What are the implications of the 'CARC Green Paint' requirement on the contract's cost and environmental compliance?

CARC (Chemical Agent Resistant Coating) paint is a specialized coating required for military vehicles to withstand decontamination procedures after exposure to chemical, biological, or radiological agents. This coating is typically more expensive than standard industrial paints due to its formulation, application process, and durability requirements. The 'Green Paint' specification indicates a standard camouflage color. While essential for survivability and operational readiness in certain environments, the CARC requirement adds a cost premium to the vehicle's overall price. Environmental compliance is managed through adherence to military specifications for CARC application and disposal, which are often stringent.

What is the track record of Mack Defense LLC in delivering similar heavy tactical vehicles to the U.S. military?

Mack Defense LLC, a subsidiary of Mack Trucks, has a history of supplying vehicles to the U.S. military, including the M917A3 Heavy Dump Truck. They were awarded the original contract (W56HZV18D0042) for these vehicles, indicating they possess the capability and have been selected by the Army for this program. Their track record involves fulfilling previous orders under this contract, demonstrating an ability to meet production schedules and specifications. However, as with any large-scale defense contractor, performance can vary across contracts, and a comprehensive review would involve examining past delivery performance, quality control metrics, and any past performance issues or commendations related to similar programs.

How does the total contract value of $28.05 million fit into the broader context of the U.S. Army's vehicle procurement budget?

The $28.05 million awarded for 74 heavy dump trucks represents a specific line item within the U.S. Army's vast annual budget for vehicle procurement and sustainment. While a significant sum for a single delivery order, it is a relatively small fraction of the Army's overall equipment modernization budget, which can run into billions of dollars annually. This procurement likely supports a specific tactical need or fleet replacement cycle. Its significance lies in fulfilling a critical operational requirement for heavy-lift dump trucks, essential for engineering, construction, and logistical support in various operational theaters, rather than representing a major shift in overall spending strategy.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Manufacturing › Heavy Duty Truck Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7310 TILGHMAN ST STE 600, ALLENTOWN, PA, 18106

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $28,052,343

Exercised Options: $28,052,343

Current Obligation: $28,052,343

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV18D0042

IDV Type: IDC

Timeline