DoD Awards $16.7B JLTV Contract to AM General LLC for Truck Trailer Manufacturing
Contract Overview
Contract Amount: $16,715,846 ($16.7M)
Contractor: AM General LLC
Awarding Agency: Department of Defense
Start Date: 2025-02-01
End Date: 2026-01-31
Contract Duration: 364 days
Daily Burn Rate: $45.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LONG TERM CONTRACT FOR TEN YEARS JLTV PROGRAM
Place of Performance
Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $16.7 million to AM GENERAL LLC for work described as: LONG TERM CONTRACT FOR TEN YEARS JLTV PROGRAM Key points: 1. The contract is a long-term commitment for ten years, indicating significant program investment. 2. AM General LLC is the sole contractor, raising questions about potential lack of competition. 3. The contract value is substantial at $16.7 billion, requiring careful oversight. 4. The sector is Defense, specifically truck trailer manufacturing, a critical component for military logistics.
Value Assessment
Rating: fair
The contract is a long-term, firm-fixed-price award. Without specific pricing benchmarks for similar JLTV components or delivery orders, assessing value is difficult. The duration suggests potential for price escalation over time.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract is awarded under a sole-source basis, indicating limited competition. This method may not yield the most competitive pricing for the government.
Taxpayer Impact: The substantial value of this sole-source contract represents a significant taxpayer investment, with potential for reduced cost savings due to limited competition.
Public Impact
Ensures continued supply of Joint Light Tactical Vehicles (JLTVs) for military operations. Supports AM General LLC's manufacturing capabilities and workforce. Potential impact on military readiness and deployment capabilities. Long-term commitment may influence future defense budget allocations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing.
- Long-term contract duration increases risk of cost overruns.
- Lack of transparency in pricing due to sole-source nature.
Positive Signals
- Ensures critical vehicle supply for the military.
- Supports a key defense contractor.
- Firm-fixed-price contract provides some cost certainty.
Sector Analysis
This contract falls within the Defense sector, specifically related to tactical vehicle manufacturing. Spending benchmarks for similar long-term, sole-source vehicle contracts are difficult to establish without more granular data, but the $16.7 billion value is significant.
Small Business Impact
The data does not indicate any subcontracting opportunities for small businesses. The award is to a large prime contractor, AM General LLC, suggesting minimal direct impact on small businesses unless they are part of the prime's supply chain.
Oversight & Accountability
Given the long-term, sole-source nature of this contract, robust oversight is crucial. The Department of the Army must ensure performance metrics are met and explore opportunities for future competition or cost reduction.
Related Government Programs
- Truck Trailer Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition and potentially increases costs.
- Long-term contract duration (10 years) carries inherent risks of price escalation and changing requirements.
- Dependence on a single contractor for a critical defense system.
- Potential for contractor performance issues over an extended period.
- Lack of transparency regarding the specific components and their individual costs.
Tags
truck-trailer-manufacturing, department-of-defense, in, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.7 million to AM GENERAL LLC. LONG TERM CONTRACT FOR TEN YEARS JLTV PROGRAM
Who is the contractor on this award?
The obligated recipient is AM GENERAL 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 $16.7 million.
What is the period of performance?
Start: 2025-02-01. End: 2026-01-31.
What is the justification for the sole-source award, and have alternatives been thoroughly explored?
The justification for a sole-source award typically involves unique capabilities or lack of viable alternatives. For this JLTV contract, the Department of Defense would need to demonstrate why AM General LLC is the only source capable of fulfilling the requirement. Thorough market research and analysis of alternative sources should have been conducted to ensure the government is obtaining the best value, even in a sole-source scenario.
How will the government ensure cost-effectiveness and prevent potential price creep over the ten-year contract duration?
To ensure cost-effectiveness, the government should implement strong contract management, including regular performance reviews and audits. For a firm-fixed-price contract, price creep is less likely than with cost-plus contracts, but monitoring economic price adjustments and ensuring efficient production by the contractor are still vital. Periodic re-evaluations or market checks could also inform future negotiations.
What are the key performance indicators (KPIs) for this contract, and how will they be monitored to ensure program success?
Key performance indicators would likely include delivery schedules, vehicle quality and reliability, technical performance specifications, and potentially production efficiency metrics. The Department of the Army will need a robust system for tracking these KPIs, conducting regular inspections, and holding AM General LLC accountable for meeting or exceeding them. Deviations from KPIs should trigger corrective actions and potential penalties.
Industry Classification
NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer Manufacturing
Product/Service Code: SERVICE AND TRADE EQPT
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: 105 N NILES AVE, SOUTH BEND, IN, 46617
Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $16,715,846
Exercised Options: $16,715,846
Current Obligation: $16,715,846
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W56HZV23D0008
IDV Type: IDC
Timeline
Start Date: 2025-02-01
Current End Date: 2026-01-31
Potential End Date: 2026-01-31 12:01:00
Last Modified: 2026-02-05
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