Army Awards $91M for Abrams Transmissions, Sole-Sourced to Allison Transmission Inc

Contract Overview

Contract Amount: $91,007,191 ($91.0M)

Contractor: Allison Transmission Inc

Awarding Agency: Department of Defense

Start Date: 2024-11-22

End Date: 2027-09-15

Contract Duration: 1,027 days

Daily Burn Rate: $88.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR ABRAMS TRANSMISSIONS

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46222

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $91.0 million to ALLISON TRANSMISSION INC for work described as: DELIVERY ORDER FOR ABRAMS TRANSMISSIONS Key points: 1. Significant award for critical defense components. 2. Sole-source award raises questions about price discovery. 3. Potential for higher costs due to lack of competition. 4. Focus on mechanical power transmission equipment manufacturing.

Value Assessment

Rating: questionable

The award of $91,007,191.35 for Abrams transmissions is a substantial sum. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar high-performance transmission systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Allison Transmission Inc. This limits price discovery and may result in a higher cost to the government than if multiple vendors had bid.

Taxpayer Impact: The lack of competition could lead to taxpayers paying a premium for these essential military vehicle components.

Public Impact

Ensures continued operational readiness for Abrams tanks. Supports a key defense contractor's manufacturing capabilities. Highlights reliance on specific suppliers for critical military hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of price competition
Long contract duration

Positive Signals

Essential for Abrams tank readiness
Supports domestic manufacturing

Sector Analysis

This award falls within the Mechanical Power Transmission Equipment Manufacturing sector, a critical component of the defense industrial base. Spending in this area is directly tied to military readiness and modernization efforts.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as both 'ss' and 'sb' fields are false. This award likely supports large-scale manufacturing operations.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the price remains fair and reasonable throughout the contract period, despite the absence of competitive pressure.

Related Government Programs

Mechanical Power Transmission Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Potential for price gouging
Lack of competitive pressure
Long-term supply chain dependency
Limited transparency on price justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.0 million to ALLISON TRANSMISSION INC. DELIVERY ORDER FOR ABRAMS TRANSMISSIONS

Who is the contractor on this award?

The obligated recipient is ALLISON TRANSMISSION 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 $91.0 million.

What is the period of performance?

Start: 2024-11-22. End: 2027-09-15.

What is the justification for the sole-source award, and how was the price determined to be fair and reasonable without competition?

The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. The government would still be required to perform a price analysis, potentially using historical data, cost breakdowns from the contractor, or benchmarking against similar, albeit not identical, procurements to establish reasonableness.

What are the long-term risks associated with relying on a single supplier for such critical components?

Long-term reliance on a sole-source supplier can create significant risks, including potential price escalation, supply chain vulnerabilities if the supplier faces disruptions, and a lack of incentive for the supplier to innovate or improve efficiency. It also limits the government's ability to leverage market competition for better terms.

How does the awarded price compare to industry benchmarks for similar high-performance transmission systems, considering the specialized nature of military applications?

Without specific benchmark data for military-grade Abrams transmissions, a direct comparison is challenging. However, the 'br' field suggests a benchmark of $88,615, which is significantly lower than the implied per-unit cost if the total award is divided by the number of units (which is not provided). This discrepancy warrants further investigation into the benchmark's applicability or the contract's pricing structure.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Mechanical Power Transmission Equipment 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

Parent Company: Allison Transmission Holdings, Inc.

Address: 1 ALLISON WAY, INDIANAPOLIS, IN, 46222

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: $91,027,120

Exercised Options: $91,007,191

Current Obligation: $91,007,191

Actual Outlays: $24,674,475

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV23D0056

IDV Type: IDC

Timeline