Army awards $107.5M for track show assemblies, a significant portion of spending in this niche manufacturing sector

Contract Overview

Contract Amount: $107,473,018 ($107.5M)

Contractor: LOC Performance Products LLC

Awarding Agency: Department of Defense

Start Date: 2024-08-13

End Date: 2026-05-05

Contract Duration: 630 days

Daily Burn Rate: $170.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UNDEFINITIZED CONTRACT ACTION (UCA) OBLIGATED FIRST DELIVERY ORDER OFF W912CH-24-D-0025 FOR THE TRACK SHOW ASSEMBLY QTY: 183,542

Place of Performance

Location: PLYMOUTH, WAYNE County, MICHIGAN, 48170

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $107.5 million to LOC PERFORMANCE PRODUCTS LLC for work described as: UNDEFINITIZED CONTRACT ACTION (UCA) OBLIGATED FIRST DELIVERY ORDER OFF W912CH-24-D-0025 FOR THE TRACK SHOW ASSEMBLY QTY: 183,542 Key points: 1. The contract's value represents a substantial investment in specialized military vehicle components. 2. Limited competition suggests potential for higher pricing, warranting close scrutiny of cost-effectiveness. 3. The undefinitized contract action (UCA) status introduces performance and cost risks until fully defined. 4. This award falls within the broader category of military vehicle manufacturing, a critical defense sub-sector. 5. The fixed-price nature of the delivery order provides some cost certainty for the government. 6. The contractor's performance on this and similar contracts will be a key indicator of value.

Value Assessment

Rating: fair

The obligated amount of $107.5 million for 183,542 track show assemblies appears significant. Benchmarking this against similar specialized military component procurements is challenging due to the niche nature of the product. However, the undefinitized contract action (UCA) status, coupled with limited competition, raises concerns about potential cost overruns and the government securing the best possible value. Further analysis of the contractor's historical pricing and performance on similar contracts would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, LOC PERFORMANCE PRODUCTS LLC, was considered capable of meeting the requirement. The absence of a competitive bidding process means that the government did not benefit from price discovery through market competition. This approach is typically used when there are unique capabilities or proprietary technologies involved, or in situations where urgency precludes a full competition.

Taxpayer Impact: The lack of competition means taxpayers may not have received the most cost-effective pricing available in the market. Without competing bids, there is a risk that the awarded price is higher than it would have been under a competitive scenario.

Public Impact

The primary beneficiaries are the U.S. Army, which receives critical components for its military vehicles. The contract delivers essential track show assemblies, vital for the operational readiness of armored vehicles. The geographic impact is primarily in Michigan, where LOC PERFORMANCE PRODUCTS LLC is located, potentially supporting local jobs and the regional economy. Workforce implications include employment opportunities at the contractor's facility for manufacturing and assembly roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Undefinitized Contract Action (UCA) status introduces uncertainty regarding final cost and scope.
Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
The specific nature of track show assemblies may indicate a limited number of qualified suppliers, raising long-term competition concerns.
Reliance on a single supplier for critical components can create supply chain vulnerabilities.

Positive Signals

The contract is a Firm Fixed Price (FFP) delivery order, providing a degree of cost control once finalized.
The award is to a specific company (LOC PERFORMANCE PRODUCTS LLC) with stated expertise in this area.
The duration of the contract (630 days) allows for a structured delivery schedule.

Sector Analysis

The manufacturing of military vehicle components, including track show assemblies, falls under the broader defense industrial base. This niche sector is characterized by specialized engineering, high-quality manufacturing standards, and often, limited competition due to the unique requirements and security considerations. Spending in this area is directly tied to military readiness and modernization efforts. Comparable spending benchmarks are difficult to establish without more granular data on specific component types and quantities across the defense sector.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to LOC PERFORMANCE PRODUCTS LLC, a presumably larger entity given the contract value, suggests that small businesses are not directly benefiting from this specific prime contract. Further investigation into the contractor's subcontracting plans would be needed to assess any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Army contracting and program management offices. As an undefinitized contract action (UCA), there will be heightened scrutiny during the definitization process to ensure the final terms and pricing are fair and reasonable. Transparency regarding the definitization timeline and the final negotiated price will be key indicators of effective oversight. Inspector General involvement would typically occur if specific allegations of fraud, waste, or abuse arise.

Related Government Programs

Military Armored Vehicle Manufacturing
Defense Industrial Base Contracts
Army Vehicle Component Procurement
Specialized Manufacturing Contracts

Risk Flags

Undefinitized Contract Action (UCA)
Sole-Source Award
Potential for Cost Overruns
Lack of Competitive Benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $107.5 million to LOC PERFORMANCE PRODUCTS LLC. UNDEFINITIZED CONTRACT ACTION (UCA) OBLIGATED FIRST DELIVERY ORDER OFF W912CH-24-D-0025 FOR THE TRACK SHOW ASSEMBLY QTY: 183,542

Who is the contractor on this award?

The obligated recipient is LOC PERFORMANCE PRODUCTS 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 $107.5 million.

What is the period of performance?

Start: 2024-08-13. End: 2026-05-05.

What is the track record of LOC PERFORMANCE PRODUCTS LLC with the Department of Defense, particularly on similar contracts?

Information on LOC PERFORMANCE PRODUCTS LLC's specific track record with the Department of Defense is not detailed in the provided data. However, their selection for this significant $107.5 million contract suggests they possess the necessary capabilities and have likely had prior dealings with the government. To assess their track record thoroughly, one would need to examine their past performance evaluations (e.g., CPARS reports), any previous contract awards for similar components, and their history of meeting delivery schedules and quality standards. A review of their financial stability and any past disputes or contract terminations would also be crucial for a comprehensive understanding of their reliability as a government contractor.

How does the per-unit cost of these track show assemblies compare to industry benchmarks or historical government purchases?

The provided data does not include a per-unit cost breakdown, making direct comparison to industry benchmarks or historical government purchases impossible. The total obligated amount is $107,500,000 for 183,542 units, which equates to approximately $585.65 per unit. Without access to specific market research, competitive bids from other potential suppliers, or data on previous procurements of identical or comparable track show assemblies, it is difficult to determine if this price is competitive or represents good value for money. The sole-source nature of the award further complicates benchmarking, as the government did not leverage competition to establish a market-driven price.

What are the primary risks associated with the Undefinitized Contract Action (UCA) status of this award?

The primary risk associated with an Undefinitized Contract Action (UCA) is the uncertainty surrounding the final contract terms, scope, and price. Initially, the government authorizes work based on preliminary negotiations, with the expectation of reaching a definitive agreement later. This can lead to cost growth if the final negotiated price exceeds initial estimates, or scope creep if the requirements are not clearly defined. There's also a risk that the contractor may not agree to terms favorable to the government during definitization, potentially leading to disputes or delays. For taxpayers, the main risk is paying more than necessary for the goods or services received due to the lack of a fully defined and negotiated agreement at the outset.

What is the expected impact of this contract on the operational readiness of the U.S. Army's vehicle fleet?

This contract is expected to have a positive impact on the operational readiness of the U.S. Army's vehicle fleet by ensuring the availability of critical track show assemblies. These components are essential for the proper functioning of tracked military vehicles, such as tanks and armored personnel carriers. By securing a supply of these parts, the Army can maintain its existing fleet, conduct necessary repairs, and potentially support new vehicle production or upgrades. The timely delivery of these assemblies, as stipulated by the contract's schedule, is crucial for preventing operational downtime and ensuring that Army units have reliable equipment for training and deployment.

How does this contract's value compare to overall U.S. Army spending on vehicle components or related manufacturing categories?

The $107.5 million obligated for these track show assemblies represents a significant, albeit specific, investment within the broader U.S. Army budget for vehicle components. While this amount is substantial for a single component type, it must be viewed in the context of the Army's total annual spending, which runs into the tens or hundreds of billions of dollars across all categories. Spending on vehicle components, including engines, transmissions, tracks, and armor, constitutes a considerable portion of the Army's procurement and maintenance budget. This particular award highlights the specialized nature and cost associated with maintaining and modernizing the Army's diverse fleet of tracked vehicles, underscoring the importance of such niche manufacturing capabilities.

Industry Classification

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

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13505 N HAGGERTY RD, PLYMOUTH, MI, 48170

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: $107,473,018

Exercised Options: $107,473,018

Current Obligation: $107,473,018

Actual Outlays: $6,745,536

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W912CH24D0025

IDV Type: IDC

Timeline