DoD awards $27.9M for heavy-duty tank trailers to DRS Sustainment Systems, Inc. for Israel

Contract Overview

Contract Amount: $27,921,875 ($27.9M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2023-12-27

End Date: 2029-02-28

Contract Duration: 1,890 days

Daily Burn Rate: $14.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMS CASE: IS-ZJY HEAVY DUTY TANK TRAILERS FOR THE COUNTRY OF ISRAEL

Place of Performance

Location: BRIDGETON, SAINT LOUIS County, MISSOURI, 63044

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $27.9 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: FMS CASE: IS-ZJY HEAVY DUTY TANK TRAILERS FOR THE COUNTRY OF ISRAEL Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 1890 days suggests a long-term need for these specialized trailers. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. The procurement is for a foreign military sale, indicating international cooperation. 5. The North American Industry Classification System (NAICS) code 336212 points to truck trailer manufacturing. 6. The award value of nearly $28 million warrants scrutiny for value for money.

Value Assessment

Rating: fair

Benchmarking the value for specialized heavy-duty tank trailers is challenging without specific performance metrics or detailed cost breakdowns. The contract value of $27.9 million for 1890 days (approximately 5 years) suggests an annual expenditure of around $5.6 million. This figure needs to be compared against similar international sales and domestic procurements for comparable equipment to assess if the pricing is competitive. The lack of competition inherently raises concerns about optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The absence of a competitive bidding process means that the government did not benefit from the price discovery that typically occurs when multiple companies vie for a contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition, as the contractor faced no pressure to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Israeli Defense Forces, who will receive critical equipment for their armored vehicle logistics. The services delivered include the manufacturing and delivery of heavy-duty tank trailers. The geographic impact is primarily the delivery destination in Israel, with manufacturing likely occurring within the U.S. Workforce implications include jobs in the manufacturing sector, specifically in trailer production, for DRS Sustainment Systems, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if not closely monitored due to limited competition.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Long-term contract (over 5 years) provides stability for the supplier and ensures sustained delivery.
Procurement supports a key U.S. ally through Foreign Military Sales.

Sector Analysis

The truck trailer manufacturing industry (NAICS 336212) is a significant segment of the broader transportation equipment manufacturing sector. This contract falls within the defense industrial base, specifically supporting military logistics. The market for specialized military trailers can be niche, often involving a limited number of manufacturers capable of meeting stringent defense specifications. Comparable spending benchmarks would likely be found within other Foreign Military Sales or direct U.S. military procurements of similar heavy-duty or specialized trailer systems.

Small Business Impact

The contract indicates that small business participation was not a primary consideration, as the award was made to DRS Sustainment Systems, Inc., a large business, and was not set aside for small businesses. There is no explicit mention of subcontracting goals for small businesses within the provided data. This suggests that the direct impact on the small business ecosystem may be minimal unless DRS Sustainment Systems, Inc. voluntarily engages small businesses for components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified trailers at the agreed-upon price. Transparency regarding the sole-source justification and ongoing performance monitoring would be key areas for assessment. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Foreign Military Sales Program
Department of Defense Logistics Support Contracts
Heavy Equipment Transport Trailers
Military Vehicle Manufacturing

Risk Flags

Sole Source Justification
Potential for Price Inflation
Limited Performance Data Available

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to DRS SUSTAINMENT SYSTEMS, INC. FMS CASE: IS-ZJY HEAVY DUTY TANK TRAILERS FOR THE COUNTRY OF ISRAEL

Who is the contractor on this award?

The obligated recipient is DRS SUSTAINMENT 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 $27.9 million.

What is the period of performance?

Start: 2023-12-27. End: 2029-02-28.

What is the track record of DRS Sustainment Systems, Inc. in delivering similar heavy-duty military trailers?

DRS Sustainment Systems, Inc., a subsidiary of Leonardo DRS, has a history of providing various defense systems and support services. While specific details on their track record for heavy-duty tank trailers for foreign military sales are not provided in this data snippet, the company is known for its involvement in military logistics and vehicle components. A deeper dive into their contract history with the Department of Defense and other allied nations would be necessary to fully assess their performance and reliability in delivering this specific type of equipment. Past performance evaluations and any reported issues on previous contracts would be crucial indicators.

How does the per-unit cost of these trailers compare to similar procurements?

The provided data does not allow for a direct per-unit cost calculation or comparison. The total award is $27,921,874.98 for an unspecified number of heavy-duty tank trailers. To benchmark the per-unit cost, we would need to know the quantity of trailers procured. Furthermore, comparing this cost would require access to data on similar FMS cases or domestic DoD procurements of comparable specialized trailers, considering factors like payload capacity, specialized features (e.g., armor, specific tank compatibility), and delivery timelines. Without the quantity, any per-unit cost analysis is speculative.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract revolve around cost and performance. Without competition, there is an increased risk of the government paying a higher price than might be achieved in a competitive environment. Price reasonableness is harder to ascertain. Performance risks include potential delays in delivery, quality issues, or the contractor not meeting the specific technical requirements, as there are fewer external pressures to excel. The lack of a competitive landscape could also reduce the incentive for the contractor to innovate or provide exceptional service beyond the contract's minimum requirements.

What is the strategic importance of these tank trailers for the recipient nation?

Heavy-duty tank trailers are critical components of military logistics, enabling the transport of main battle tanks and other heavy armored vehicles. For the country of Israel, which operates a significant fleet of armored vehicles, these trailers are essential for maintaining operational readiness, deploying forces effectively, and conducting logistical support during training exercises and active operations. The ability to rapidly and safely move heavy armor across various terrains is crucial for national defense and power projection. This procurement directly enhances Israel's military mobility and sustainment capabilities.

What is the historical spending trend for similar equipment by the Department of Defense or through FMS?

Historical spending on heavy-duty military trailers, particularly through Foreign Military Sales (FMS) and direct Department of Defense (DoD) procurements, can vary significantly year over year based on strategic needs, modernization programs, and allied nation requests. While this specific data point is a single award, broader trends might show increased spending on logistics and sustainment equipment as global security challenges evolve. Analyzing past FMS cases for Israel and other key allies, as well as DoD's own procurement data for similar trailer systems (e.g., M870, M1000 trailers), would reveal patterns in contract values, quantities, and types of equipment procured over time.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV22R0162

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 4201 INNOVATION WAY, BRIDGETON, MO, 63044

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: $27,921,875

Exercised Options: $27,921,875

Current Obligation: $27,921,875

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $5,129,462

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline