DoD Awards $292M for Abrams Family Vehicles to General Dynamics, Lacking Competition

Contract Overview

Contract Amount: $292,155,765 ($292.2M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-06

End Date: 2027-08-31

Contract Duration: 1,273 days

Daily Burn Rate: $229.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: SEPV3 ABRAM FAMILY OF VEHICLES

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $292.2 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: SEPV3 ABRAM FAMILY OF VEHICLES Key points: 1. Significant contract value of $292.16 million awarded. 2. Sole incumbent contractor, General Dynamics Land Systems Inc., dominates. 3. Lack of competition raises concerns about price discovery and value. 4. Spending is concentrated within the Defense sector, specifically armored vehicles.

Value Assessment

Rating: questionable

The contract value of $292.16 million for Abrams family vehicles is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar contracts or assess if the government is receiving optimal value.

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 Inc. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these military vehicles.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The Department of Defense relies on a single contractor for critical armored vehicle components. Potential for reduced innovation and slower technological advancement without competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Sole Source Award
High Contract Value

Positive Signals

Essential Military Equipment
Established Contractor

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of armored vehicles. Spending benchmarks for such specialized military hardware are often opaque due to security and proprietary concerns, but significant investments are typical.

Small Business Impact

The data indicates that small businesses were not directly involved in this specific contract award. Further analysis would be needed to determine if small businesses are subcontractors or if opportunities are being missed.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and performance. The Department of Defense's contracting oversight mechanisms will be key to monitoring this award.

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 price competition.
Potential for inflated costs due to lack of bidding.
Dependency on a single contractor for critical defense assets.
Limited transparency in pricing mechanisms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $292.2 million to GENERAL DYNAMICS LAND SYSTEMS INC.. SEPV3 ABRAM FAMILY OF VEHICLES

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 $292.2 million.

What is the period of performance?

Start: 2024-03-06. End: 2027-08-31.

What is the justification for awarding this contract sole-source, and what measures are in place to ensure fair pricing?

The justification for a sole-source award typically involves factors like unique capabilities, existing infrastructure, or urgent national security needs. To ensure fair pricing, the government often conducts independent cost analyses, negotiates profit margins, and may impose price ceilings or incentives. Robust oversight is essential to validate these measures.

What are the long-term risks associated with relying on a single supplier for critical military hardware like the Abrams family of vehicles?

Long-term reliance on a single supplier creates significant risks, including potential price gouging, supply chain vulnerabilities, and a lack of innovation. It can also lead to vendor lock-in, making it difficult and costly to switch providers if issues arise. Furthermore, it can stifle competition and discourage new entrants with potentially superior technologies.

How does the lack of competition impact the overall effectiveness and modernization of the Abrams vehicle program?

A lack of competition can hinder the overall effectiveness and modernization of the Abrams program by reducing the incentive for the sole contractor to innovate or improve efficiency. Without competitive pressure, there may be less drive to adopt new technologies, optimize production, or offer cost-saving solutions, potentially slowing down upgrades and increasing lifecycle costs.

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: $292,155,765

Exercised Options: $292,155,765

Current Obligation: $292,155,765

Subaward Activity

Number of Subawards: 226

Total Subaward Amount: $65,070,624

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV21D0001

IDV Type: IDC

Timeline