DoD Awards $174M for 150 HMMWV Chassis and Enclosures to AM General LLC
Contract Overview
Contract Amount: $173,797,287 ($173.8M)
Contractor: AM General LLC
Awarding Agency: Department of Defense
Start Date: 2024-08-31
End Date: 2029-04-27
Contract Duration: 1,700 days
Daily Burn Rate: $102.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 150 EA M1152A1B2 HMMWV CHASSIS (PART 1) 150 EA SECM ENCLOSURES (PART 2) 7 LO SECM ENCLOSURE MFG AND INTEGRATION LABOR
Place of Performance
Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $173.8 million to AM GENERAL LLC for work described as: 150 EA M1152A1B2 HMMWV CHASSIS (PART 1) 150 EA SECM ENCLOSURES (PART 2) 7 LO SECM ENCLOSURE MFG AND INTEGRATION LABOR Key points: 1. High value contract for critical military vehicle components. 2. Sole-source award to AM General LLC, a known incumbent. 3. Long performance period (2024-2029) may impact price competitiveness. 4. Spending concentrated in the Military Vehicle Manufacturing sector.
Value Assessment
Rating: fair
The contract value of $173.8M for 150 chassis and enclosures suggests a per-unit cost of approximately $1.16M. This is a significant investment, and without competitive benchmarking, it's difficult to assess its value.
Cost Per Unit: $1,158,648.58
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to AM General LLC. The lack of competition limits price discovery and may result in a higher cost to the government.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Ensures continued production of essential HMMWV chassis for military operations. Supports a key defense contractor and its manufacturing capabilities. Potential for extended reliance on a single supplier for these components. Impacts the readiness and modernization of Army ground vehicles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Long contract duration could lead to price escalation.
- Lack of small business participation noted.
Positive Signals
- Secures critical military vehicle components.
- Supports established supplier with relevant expertise.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This contract falls within the Military Armored Vehicle, Tank, and Tank Component Manufacturing sector. Spending in this area is driven by defense modernization and sustainment needs, with significant capital investment often required for specialized production.
Small Business Impact
The data indicates no specific set-aside for small businesses in this sole-source award. This suggests that the primary contractor, AM General LLC, is handling the entire scope of work, potentially limiting opportunities for smaller firms in this specific contract.
Oversight & Accountability
The Department of the Army is the contracting agency. Oversight will focus on contract performance, delivery schedules, and adherence to the firm fixed price terms. The sole-source nature warrants scrutiny to ensure fair pricing.
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
- Lack of competition
- Long contract duration
- No small business participation noted
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 $173.8 million to AM GENERAL LLC. 150 EA M1152A1B2 HMMWV CHASSIS (PART 1) 150 EA SECM ENCLOSURES (PART 2) 7 LO SECM ENCLOSURE MFG AND INTEGRATION LABOR
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 $173.8 million.
What is the period of performance?
Start: 2024-08-31. End: 2029-04-27.
What is the historical cost performance of AM General LLC on similar sole-source HMMWV chassis contracts?
Analyzing historical data for AM General LLC's sole-source contracts for HMMWV chassis is crucial. This would involve reviewing past contract awards, pricing structures, and any cost overruns or savings. Understanding their track record can provide insights into whether the current $1.16M per-unit cost is consistent with previous performance or represents an escalation, helping to assess the overall value proposition for the government.
What are the specific risks associated with relying solely on AM General LLC for these critical components over a five-year period?
The primary risks include potential supply chain disruptions if AM General faces production issues, lack of innovation due to limited competitive pressure, and the possibility of price increases beyond market rates over the contract's duration. Furthermore, dependence on a single source can weaken the government's negotiating position for future requirements and limit the development of alternative suppliers.
How does the $1.16M per-unit cost compare to industry benchmarks for similar armored vehicle chassis, considering the sole-source nature?
Without competitive bids, a direct comparison to industry benchmarks is challenging. However, research into publicly available data for comparable military vehicle chassis, factoring in customization and integration, is necessary. If this cost significantly exceeds benchmarks for non-sole-source procurements or historical data for similar items, it raises concerns about the government securing the most effective price.
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: $232,258,375
Exercised Options: $173,797,287
Current Obligation: $173,797,287
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV22D0002
IDV Type: IDC
Timeline
Start Date: 2024-08-31
Current End Date: 2029-04-27
Potential End Date: 2029-04-27 12:04:00
Last Modified: 2025-07-23
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