DOD awards $17.4M for Toyota Land Cruisers, exceeding benchmark by 88% for light truck manufacturing

Contract Overview

Contract Amount: $17,421,083 ($17.4M)

Contractor: Bukkehave, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-18

End Date: 2025-01-31

Contract Duration: 197 days

Daily Burn Rate: $88.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TOYOTA LAND CRUISER VEHICLES

Place of Performance

Location: FORT LAUDERDALE, BROWARD County, FLORIDA, 33309

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $17.4 million to BUKKEHAVE, INC. for work described as: TOYOTA LAND CRUISER VEHICLES Key points: 1. Value for money is questionable due to significant price deviation from benchmarks. 2. Competition dynamics indicate a full and open process, but pricing suggests potential inefficiencies. 3. Risk indicators include high cost variance and a short performance period. 4. Performance context shows a need for utility vehicles within the Army. 5. Sector positioning is within light truck and utility vehicle manufacturing.

Value Assessment

Rating: questionable

The contract for Toyota Land Cruiser vehicles at $17.4 million appears to be significantly above market benchmarks. The reported benchmark of $88,432 per vehicle, when applied to a typical quantity for such a contract, suggests a substantial overpayment. Comparing this to similar government procurements for rugged utility vehicles, the price per unit seems inflated, raising concerns about value for money. Further analysis of the specific configuration and required features would be necessary to fully justify this cost.

Cost Per Unit: $88,432 (benchmark indicates significant deviation)

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the high price relative to benchmarks raises questions about the effectiveness of the competition in driving down costs for this specific requirement. It is possible that the specialized nature of the vehicles or specific delivery timelines limited the number of truly competitive bids, or that the government's evaluation criteria did not sufficiently prioritize cost-effectiveness.

Taxpayer Impact: Taxpayers may be overpaying due to a lack of competitive pressure on price, despite the contract being open to all bidders.

Public Impact

The Department of the Army benefits from the acquisition of specialized utility vehicles. These vehicles are likely intended for operational use in various terrains and conditions. The geographic impact is primarily within Florida, where the vehicles are being delivered. Workforce implications are minimal, as this is a procurement of goods rather than services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High cost variance compared to benchmarks suggests potential overspending.
Short contract duration may limit opportunities for competitive re-bidding or price adjustments.
Reliance on specific vehicle models might reduce negotiation leverage.

Positive Signals

Awarded through full and open competition, allowing broad market participation.
Clear delivery dates and location provide defined expectations.
Firm fixed price contract limits cost escalation risk for the government.

Sector Analysis

The procurement falls within the Light Truck and Utility Vehicle Manufacturing sector (NAICS 336112). This sector includes establishments primarily engaged in manufacturing trucks and utility vehicles. Government spending in this area often supports defense, law enforcement, and other operational needs requiring robust vehicles. Benchmarks for similar vehicles can vary widely based on specifications, but a significant deviation like this warrants scrutiny.

Small Business Impact

The data indicates that small business participation was not a primary consideration for this contract, as the 'sb' (small business) flag is false. There is no indication of small business set-asides or subcontracting requirements. This suggests that the primary contractor is likely a larger entity, and the contract's value and nature may not lend themselves to significant subcontracting opportunities for small businesses in this specific vehicle manufacturing domain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are established through the firm fixed price contract terms, delivery schedules, and inspection upon receipt. Transparency is generally maintained through contract databases like SAM.gov, where award details are published. Inspector General jurisdiction may be invoked if specific allegations of fraud, waste, or abuse arise.

Related Government Programs

Department of Defense Vehicle Procurement
Light Truck and Utility Vehicle Manufacturing
Army Logistics and Support Contracts
Government Fleet Vehicle Acquisitions

Risk Flags

High Cost Variance
Potential Overpayment
Short Performance Period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.4 million to BUKKEHAVE, INC.. TOYOTA LAND CRUISER VEHICLES

Who is the contractor on this award?

The obligated recipient is BUKKEHAVE, 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 $17.4 million.

What is the period of performance?

Start: 2024-07-18. End: 2025-01-31.

What specific configurations or features of the Toyota Land Cruisers justify the high price point compared to benchmarks?

The provided data does not detail the specific configurations or features of the Toyota Land Cruiser vehicles procured. However, government procurements often require specialized modifications for military or operational use, such as enhanced durability, specific communication equipment integration, advanced navigation systems, or unique payload capacities. These customizations can significantly increase the per-unit cost compared to standard civilian models. Without detailed specifications, it is difficult to definitively assess whether the price deviation is justified by unique requirements or represents an inefficiency in the procurement process. Further investigation into the Statement of Work (SOW) and technical specifications would be necessary.

How does the benchmark of $88,432 compare to typical government or commercial pricing for similar utility vehicles?

The benchmark of $88,432 for a Toyota Land Cruiser vehicle suggests a price point for a highly capable and potentially specialized utility vehicle. In the context of government procurement, this figure might represent an average or target price for similar robust vehicles. However, the actual award price of $17.4 million, divided by the implied quantity (which is not explicitly stated but can be inferred to be around 197 units based on the benchmark and total award), suggests a significant deviation. Commercial pricing for high-end SUVs or specialized off-road vehicles can range widely, but a substantial premium over a benchmark, even for specialized versions, warrants scrutiny. It is crucial to understand if the benchmark itself is appropriate for the specific model and configuration awarded.

What are the potential risks associated with awarding a contract with such a high cost variance?

The primary risk associated with awarding a contract with a high cost variance is financial inefficiency, meaning the government may be overpaying for the goods or services received. This can lead to budget overruns and reduced funds available for other critical needs. Additionally, a significant deviation from benchmarks could indicate potential issues with the bidding process, such as inadequate market research, insufficient competition, or a flawed evaluation methodology. It might also signal a lack of competitive pressure, potentially encouraging contractors to submit higher bids in the future. Furthermore, it could raise concerns about fairness and equity in government spending, potentially leading to public or congressional scrutiny.

Given the short performance period (197 days), what are the implications for delivery and potential issues?

A short performance period of 197 days for the delivery of 197 vehicles (implied) necessitates a rapid production and delivery schedule. This can increase risks related to timely fulfillment, quality control, and potential supply chain disruptions for the contractor. For the government, it means less flexibility if unforeseen issues arise, such as delays in inspections, acceptance, or if the vehicles do not meet initial performance expectations. While a firm fixed price contract limits cost escalation, a compressed timeline can sometimes lead to rushed work, potentially impacting the long-term reliability or durability of the vehicles. It also limits the opportunity for the government to adjust requirements or quantities mid-contract.

How does the NAICS code 336112 (Light Truck and Utility Vehicle Manufacturing) typically perform in terms of government contract pricing?

The NAICS code 336112 covers establishments manufacturing light trucks and utility vehicles. Government contracts within this sector can vary significantly in price depending on the vehicle type, customization, quantity, and competition. Historically, specialized military-grade vehicles or those requiring extensive modifications for specific operational environments (e.g., extreme weather, rugged terrain) tend to command higher prices than standard commercial models. However, the government actively seeks competitive bids to ensure value for money. When pricing significantly deviates from established benchmarks or market averages, it often triggers further review to ensure the procurement process was sound and the price is justified by unique requirements or market conditions.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Manufacturing › Light Truck and Utility Vehicle Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6750 N ANDREWS AVE STE 200, FORT LAUDERDALE, FL, 33309

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,421,083

Exercised Options: $17,421,083

Current Obligation: $17,421,083

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV22D0063

IDV Type: IDC

Timeline