DoD awards $62.8M for Stryker vehicles, a sole-source contract for armored vehicle manufacturing

Contract Overview

Contract Amount: $62,873,393 ($62.9M)

Contractor: General Dynamics Land Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2024-06-07

End Date: 2026-12-31

Contract Duration: 937 days

Daily Burn Rate: $67.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: ORDERING PERIOD 4 CALL UP FOR 150 STRYKER DVH A1 ECP VEHICLES.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48310

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $62.9 million to GENERAL DYNAMICS LAND SYSTEMS INC. for work described as: ORDERING PERIOD 4 CALL UP FOR 150 STRYKER DVH A1 ECP VEHICLES. Key points: 1. Contract awarded for 150 Stryker DVH A1 ECP vehicles. 2. Sole-source award to General Dynamics Land Systems Inc. 3. Delivery order under an existing contract. 4. Fixed Price Incentive contract type. 5. Vehicles to be manufactured in Michigan. 6. Delivery expected by end of 2026.

Value Assessment

Rating: fair

The contract value of $62.8 million for 150 Stryker vehicles equates to approximately $419,155 per vehicle. Benchmarking this against similar military vehicle procurements is challenging without specific configuration details. However, the Fixed Price Incentive (FPI) contract type suggests that costs are shared between the government and contractor, which can lead to higher initial prices but incentivizes cost control. Further analysis would require comparing the specific capabilities and upgrades of the DVH A1 ECP variant to other Stryker models or similar armored personnel carriers.

Cost Per Unit: Approximately $419,155 per vehicle (150 vehicles for $62.8M).

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, General Dynamics Land Systems Inc., was solicited. This approach is typically used when a unique capability is required, or when the existing contract vehicle is the only viable option for procurement. The lack of competition means the government did not benefit from a bidding process that could have driven down prices through market forces. The justification for a sole-source award would need to be thoroughly documented to ensure it was appropriate.

Taxpayer Impact: Sole-source awards limit price discovery and can potentially result in higher costs for taxpayers compared to a competitively bid contract. Without competition, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The U.S. Army benefits from the acquisition of enhanced Stryker vehicles. 150 Stryker DVH A1 ECP vehicles will be delivered. Manufacturing is expected to occur in Michigan, supporting the local economy. The acquisition enhances the Army's armored vehicle capabilities for military operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Fixed Price Incentive contract type may lead to higher costs if targets are not met.
Lack of transparency in the justification for sole-source procurement.

Positive Signals

Acquisition of critical military hardware to enhance operational readiness.
Contract awarded to an established manufacturer with proven capabilities in armored vehicles.
Delivery order under an existing contract may streamline procurement and delivery timelines.

Sector Analysis

The defense industrial base for armored vehicle manufacturing is highly specialized, with a few key players dominating the market. General Dynamics Land Systems is a significant entity in this sector, producing various versions of the Stryker platform. This contract fits within the broader category of military vehicle procurement, which is a substantial segment of defense spending. Comparable spending benchmarks would involve looking at other large-scale procurements of armored personnel carriers or similar tactical vehicles by the U.S. military or allied nations.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. General Dynamics Land Systems Inc. is a large prime contractor. While the prime contract is not set aside for small businesses, there may be subcontracting opportunities for small businesses within the supply chain for vehicle components. The extent of small business participation would depend on the prime contractor's subcontracting plan and adherence to small business goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Fixed Price Incentive contract type includes provisions for monitoring cost performance against established targets. Inspector General (IG) investigations could be initiated if any fraud, waste, or abuse is suspected. Transparency is facilitated through contract databases like FPDS, though the justification for sole-source awards can sometimes be less detailed publicly.

Related Government Programs

Stryker Family of Vehicles
Armored Vehicle Procurement
Tactical Wheeled Vehicles
Department of the Army Contracts
General Dynamics Land Systems Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs due to no competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.9 million to GENERAL DYNAMICS LAND SYSTEMS INC.. ORDERING PERIOD 4 CALL UP FOR 150 STRYKER DVH A1 ECP 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 $62.9 million.

What is the period of performance?

Start: 2024-06-07. End: 2026-12-31.

What is the specific justification for awarding this contract on a sole-source basis to General Dynamics Land Systems Inc.?

The provided data indicates the contract was 'NOT COMPETED' and is a 'sole-source' award. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, or the need to maintain compatibility with existing systems. For the Stryker DVH A1 ECP vehicles, the justification likely stems from General Dynamics Land Systems being the original equipment manufacturer and sole developer of the Stryker platform and its variants. The 'ECP' (Engineering Change Proposal) designation suggests upgrades or modifications to an existing Stryker configuration, which would further necessitate the original manufacturer's involvement. A formal Justification and Approval (J&A) document would detail the specific reasons and market research conducted to support this sole-source determination, ensuring it aligns with federal acquisition regulations.

How does the Fixed Price Incentive (FPI) contract type influence cost management and potential overruns for this $62.8 million order?

A Fixed Price Incentive (FPI) contract establishes a target cost, a target profit, and a price ceiling. The final price is determined by the final negotiated cost and the sharing of variances between the government and the contractor. If the final cost is below the target cost, both parties share in the savings. If the final cost exceeds the target cost, both parties share in the overrun, up to the price ceiling. This structure incentivizes the contractor to control costs to achieve a higher profit margin, while the price ceiling protects the government from unlimited cost increases. For this $62.8 million order, the FPI type means that while there's a defined target for cost and profit, actual expenditures could lead to a final price that is higher or lower than the initial target, but not exceeding the agreed-upon ceiling. Effective oversight by the Army is crucial to monitor cost performance and ensure adherence to the incentive structure.

What are the key upgrades or capabilities associated with the Stryker DVH A1 ECP variant compared to previous Stryker models?

The designation 'DVH A1 ECP' for the Stryker vehicles indicates specific enhancements and Engineering Change Proposals (ECPs) applied to the platform. While detailed technical specifications are not provided in the summary data, ECPs typically involve upgrades to improve survivability, lethality, mobility, or mission systems. For the Stryker family, common upgrades have included improved armor packages, enhanced power generation and cooling systems to support new electronics, upgraded suspension and driveline components for increased payload and mobility, and integration of new communication or sensor systems. The 'DVH' designation might refer to a specific variant, possibly related to a Double V Hull (DVH) for enhanced mine blast protection, which has been a significant upgrade in previous Stryker iterations. The 'A1' likely signifies a further iteration or block upgrade. These ECPs aim to keep the Stryker platform relevant against evolving threats and technological advancements on the battlefield.

What is the historical spending trend for Stryker vehicles or similar armored vehicles by the Department of the Army?

The Department of the Army has consistently invested significant funds in the Stryker family of vehicles since its introduction. Over the past decade, spending on Stryker procurements, upgrades, and sustainment has amounted to billions of dollars. This includes funding for various variants such as the Infantry Carrier Vehicle (ICV), Mobile Gun System (MGS), Mortar Carrier (MC), and reconnaissance vehicles. The Army's reliance on the Stryker platform for medium-weight brigade combat teams means that annual spending fluctuates based on program milestones, production rates, and specific upgrade initiatives like the ECPs. Historical data from sources like the Government Accountability Office (GAO) and the Department of Defense's own budget requests show sustained procurement and modernization efforts for the Stryker fleet, reflecting its strategic importance.

What are the potential risks associated with sole-source procurement of military hardware like the Stryker vehicles?

Sole-source procurement of military hardware carries several inherent risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, as the government does not benefit from market pressures driving cost efficiency. This can result in less value for taxpayer money. Secondly, it can foster complacency in the sole provider, potentially reducing incentives for innovation or aggressive cost control. There's also a risk of vendor lock-in, where the government becomes heavily reliant on a single supplier, making it difficult and costly to switch providers or introduce alternative solutions in the future. Furthermore, without the scrutiny of a competitive process, there's a heightened need for robust government oversight to ensure fair pricing, quality, and timely delivery. The justification for sole-sourcing must be exceptionally strong to mitigate these risks.

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: $62,873,393

Exercised Options: $62,873,393

Current Obligation: $62,873,393

Subaward Activity

Number of Subawards: 169

Total Subaward Amount: $39,753,906

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV20D0005

IDV Type: IDC

Timeline