DoD awards $20.7M for Booker System Technical Support, a sole-source contract to General Dynamics

Contract Overview

Contract Amount: $20,722,755 ($20.7M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2024-04-15

End Date: 2026-09-04

Contract Duration: 872 days

Daily Burn Rate: $23.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: M10 BOOKER SYSTEM TECHNICAL SUPPORT (STS) FOLLOW ON

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: M10 BOOKER SYSTEM TECHNICAL SUPPORT (STS) FOLLOW ON Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The contract's cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 3. Performance period of over two years suggests a need for sustained technical support for the Booker system. 4. The award is concentrated within the Defense sector, specifically supporting armored vehicle manufacturing. 5. Lack of competition limits opportunities for innovative solutions and potentially better pricing from alternative vendors.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the absence of competitive bids. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex technical services, can lead to costs exceeding initial estimates if not carefully managed. Without comparable contracts or market data, it's difficult to definitively assess if the $20.7 million represents a fair price for the technical support services provided. The lack of competition suggests potential for higher-than-market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Land Systems Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. The lack of competition means there was no opportunity for price discovery through market forces, potentially leading to less favorable pricing for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing bids, the government has less leverage to negotiate the best possible price, potentially resulting in higher overall expenditure for this critical system support.

Public Impact

The primary beneficiaries are the Department of the Army, ensuring continued operational readiness of the Booker system. Services delivered include essential technical support, maintenance, and sustainment for the Booker armored vehicle system. The geographic impact is likely concentrated where the Booker system is deployed or maintained, primarily within the US. Workforce implications include the retention of specialized technical expertise within General Dynamics, crucial for maintaining complex military hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and innovation.
Cost-plus-fixed-fee structure may lead to cost overruns.
Lack of transparency in pricing due to no competition.
Potential for vendor lock-in with specialized system support.

Positive Signals

Ensures continuity of essential technical support for a critical defense system.
Leverages existing contractor expertise with the specific Booker system.
Provides stability for the defense supply chain related to armored vehicles.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on military vehicle manufacturing and support. The market for specialized technical support for advanced armored vehicles is often concentrated among a few prime contractors who developed or manufactured the systems. Spending in this niche is driven by defense budgets and modernization programs. Comparable spending benchmarks are difficult to establish publicly due to the proprietary nature of defense contracts and the unique specifications of systems like the Booker.

Small Business Impact

There is no indication of small business set-asides for this contract. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless General Dynamics subcontracts portions of the work. The absence of subcontracting requirements or set-asides means opportunities for small businesses to participate in this specific contract are limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined in the contract terms, including performance metrics and reporting requirements. Transparency may be limited due to the sole-source nature and the classified aspects of defense systems. The Inspector General's office may conduct audits or investigations if specific concerns arise regarding performance or cost.

Related Government Programs

Armored Vehicle Modernization Programs
Defense Logistics Agency Support Contracts
Military Vehicle Maintenance and Repair Services
Department of Defense Technical Support Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive bidding
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to GENERAL DYNAMICS LAND SYSTEMS INC.. M10 BOOKER SYSTEM TECHNICAL SUPPORT (STS) FOLLOW ON

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 $20.7 million.

What is the period of performance?

Start: 2024-04-15. End: 2026-09-04.

What is the track record of General Dynamics Land Systems Inc. in providing technical support for complex military systems?

General Dynamics Land Systems Inc. (GDLS) has a long-standing and extensive track record in developing, manufacturing, and supporting military vehicles, including armored personnel carriers and tanks. They are a primary contractor for numerous U.S. Army vehicle programs. Their experience with complex systems is well-established, often involving multi-year sustainment and technical support contracts. However, like many large defense contractors, they have faced scrutiny regarding contract costs and performance on specific programs. Assessing their performance on the Booker system specifically would require a detailed review of past performance metrics and any associated contract modifications or disputes related to this particular system.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for technical support, and what are its implications for value?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used for research and development or complex services where the scope of work is not precisely defined at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure can provide flexibility but carries risks. For the government, the primary risk is that costs can escalate beyond initial projections, as the contractor is incentivized to incur costs to complete the work, while their profit (the fee) remains fixed. This contrasts with fixed-price contracts, where the contractor bears more risk for cost overruns but has a stronger incentive to control expenses. For value, CPFF can be beneficial if it allows for necessary adaptation and innovation in technical support, but it requires robust government oversight to ensure costs remain reasonable and that the fixed fee is appropriate for the effort.

What are the potential risks associated with a sole-source award for critical defense system support?

Sole-source awards for critical defense system support present several significant risks. Firstly, the lack of competition typically leads to higher prices, as the government loses the benefit of market-driven price discovery and negotiation leverage. Secondly, it can stifle innovation, as there is no incentive for alternative vendors to propose more efficient or advanced solutions. Thirdly, it can create vendor lock-in, making it difficult and costly to switch providers in the future, even if performance or pricing becomes unsatisfactory. Finally, sole-source awards can raise concerns about transparency and fairness in the procurement process, potentially leading to perceptions of favoritism or inefficiency, and may attract greater scrutiny from oversight bodies.

What is the historical spending pattern for technical support related to the Booker system or similar armored vehicles?

Historical spending data for technical support specifically for the Booker system is not readily available in the public domain, especially given this is a follow-on contract. However, spending on technical support for major defense platforms, particularly armored vehicles, is typically substantial and spans the lifecycle of the equipment. This includes sustainment, upgrades, and readiness support. Contracts for similar large-scale vehicle programs often involve multi-year commitments in the tens to hundreds of millions of dollars for sustainment and technical services. The $20.7 million for this follow-on contract suggests a significant, ongoing need for specialized support, consistent with the lifecycle costs of advanced military hardware.

How does the geographic location of the contractor (Michigan) potentially impact the efficiency and cost of support for the Booker system?

The geographic location of the contractor, General Dynamics Land Systems Inc., headquartered in Michigan, can have implications for the efficiency and cost of providing technical support for the Booker system. Michigan has a strong industrial base, particularly in automotive and defense manufacturing, which can provide access to a skilled workforce and relevant supply chains. However, the actual delivery of technical support may involve personnel deploying to various Army installations or maintenance depots, which could be located globally. If the primary support activities are centralized in Michigan, travel and logistics costs for personnel and parts to reach operational units could be a factor. Conversely, proximity to manufacturing facilities might streamline certain aspects of technical problem-solving and parts provision. The overall impact depends on the specific nature of the support required and its deployment model.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

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: $20,722,755

Exercised Options: $20,722,755

Current Obligation: $20,722,755

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $13,094,542

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W912CH24D0001

IDV Type: IDC

Timeline