DoD awards $9M order for Abrams tank repair, raising questions about competition and value

Contract Overview

Contract Amount: $9,042,648 ($9.0M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2025-03-21

End Date: 2026-03-21

Contract Duration: 365 days

Daily Burn Rate: $24.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DSESTS REPAIR AND STS - ABRAMS WD 0001 - ORDERING YEAR 2

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $9.0 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: DSESTS REPAIR AND STS - ABRAMS WD 0001 - ORDERING YEAR 2 Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure on pricing. 2. The fixed-fee structure for this cost-plus contract requires careful monitoring to ensure cost control. 3. The contractor, DRS Network & Imaging Systems LLC, has a significant presence in defense contracting. 4. This order represents a portion of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The geographic location of performance is Florida, potentially impacting local economies and workforce. 6. The duration of the order is one year, suggesting a need for ongoing support for Abrams vehicles.

Value Assessment

Rating: fair

Benchmarking the value of this specific order is challenging without more detailed cost breakdowns and comparisons to similar repair services for Abrams tanks. The cost-plus-fixed-fee structure necessitates close oversight to prevent cost overruns. While the contractor is established, the lack of competition means there's less external validation of the pricing's fairness. The provided data does not include a clear per-unit cost for specific repair actions, making direct value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order under an existing IDIQ contract. The justification for sole-source awards typically involves specific technical capabilities or urgent needs. Without a competitive bidding process, it is difficult to ascertain the full range of potential pricing and service offerings that might have been available from other qualified vendors. This limits the opportunity for price discovery and potentially higher value for the government.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as competition is absent, potentially resulting in less favorable pricing than could be achieved through an open bidding process.

Public Impact

The primary beneficiaries are the U.S. Army's armored vehicle fleet, ensuring operational readiness. Services delivered include repairs and support for Abrams Main Battle Tanks. The geographic impact is concentrated in Florida, where the repairs will be performed. Workforce implications may include skilled technicians and support staff in the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Cost-plus-fixed-fee contracts require diligent oversight to manage expenses effectively.
Limited transparency on specific repair costs makes value assessment difficult.

Positive Signals

Contractor has established experience in defense systems.
Order supports critical military equipment readiness.
Performance is tied to a specific geographic location, potentially benefiting local industry.

Sector Analysis

The defense industrial base for armored vehicle manufacturing and maintenance is a critical sector for national security. This contract falls within the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' industry. Spending in this area is often characterized by long-term sustainment contracts and specialized repair services. Comparable spending benchmarks are difficult to establish without detailed service scope, but large-scale vehicle maintenance and upgrades can run into hundreds of millions or billions of dollars annually across the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting opportunities for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for subcontracting. Further investigation into the prime contractor's subcontracting plan would be necessary to assess its impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The cost-plus-fixed-fee structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency is limited by the sole-source nature and the proprietary cost data of the contractor. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Abrams Main Battle Tank Sustainment
Department of Defense Vehicle Maintenance
Defense Logistics Agency (DLA) Support Contracts
Army Combat Systems Maintenance

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus-fixed-fee requires robust oversight to manage costs.
Limited public data on specific repair costs hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.0 million to DRS NETWORK & IMAGING SYSTEMS LLC. DSESTS REPAIR AND STS - ABRAMS WD 0001 - ORDERING YEAR 2

Who is the contractor on this award?

The obligated recipient is DRS NETWORK & IMAGING SYSTEMS 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 $9.0 million.

What is the period of performance?

Start: 2025-03-21. End: 2026-03-21.

What is the track record of DRS Network & Imaging Systems LLC with similar sole-source contracts for Abrams tank repair?

DRS Network & Imaging Systems LLC, now part of Leonardo DRS, has a long history of providing components and support for military vehicles, including the Abrams tank. They are known for electro-optical and infrared systems, power systems, and other critical components. While specific data on their sole-source repair contracts for Abrams tanks is not publicly detailed in this context, their extensive experience as a prime contractor and supplier to the DoD suggests a capacity to perform such work. However, the absence of competition in sole-source awards means that historical performance alone does not guarantee optimal value or pricing compared to a competitive scenario. Further analysis would require examining past sole-source awards to this contractor for similar services and comparing their outcomes.

How does the $9.04 million order value compare to typical annual spending on Abrams tank repair and maintenance?

The $9.04 million order value represents a single year's funding for specific repairs and services for Abrams tanks. Annual spending on Abrams tank sustainment can vary significantly based on operational tempo, modernization programs, and depot-level maintenance cycles. Total Army spending on ground vehicle maintenance and repair often runs into the billions of dollars annually. This $9.04 million order is a component of that larger ecosystem. Without knowing the specific scope of work (e.g., number of vehicles, types of repairs), it's difficult to benchmark this single order against overall annual spending. However, it indicates a need for ongoing, specialized support for a critical component of the Army's armored fleet.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for military vehicle repair?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for military vehicle repair are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than could be achieved through open bidding. The government may not receive the best possible value. Secondly, the CPFF structure, while providing flexibility, shifts much of the cost risk to the government. The contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize cost overruns if not rigorously monitored. This necessitates strong government oversight to scrutinize costs, ensure efficiency, and prevent scope creep. Without effective oversight, costs can escalate beyond initial projections, impacting overall program budgets.

What is the expected impact of this contract on the operational readiness of the Abrams tank fleet?

This contract is expected to have a positive impact on the operational readiness of the Abrams tank fleet by ensuring that these critical armored vehicles receive necessary repairs and maintenance. The Abrams tank is a cornerstone of U.S. Army ground combat power, and its availability is directly linked to the fleet's readiness. By funding specific repair actions through this order, the Department of the Army aims to address wear and tear, component failures, or other issues that could otherwise degrade performance or lead to downtime. The successful execution of these repairs by DRS Network & Imaging Systems LLC should contribute to maintaining or improving the combat effectiveness and deployability of the Abrams fleet.

How has federal spending on Abrams tank repair and maintenance evolved over the past five years?

Analyzing the precise evolution of federal spending solely on Abrams tank repair and maintenance over the past five years requires access to detailed historical contract data, which is not fully available in this context. However, general trends in defense spending indicate a consistent need for sustainment of major weapon systems like the Abrams. Spending often fluctuates based on deployment cycles, modernization programs (e.g., Abrams upgrades), and depot maintenance schedules. Periods of high operational tempo or significant fleet upgrades typically see increased spending. Without specific historical figures for this contract vehicle or direct repair line items, it's challenging to provide a quantitative trend. However, the ongoing nature of military operations suggests sustained, significant investment in Abrams sustainment.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 100 N BABCOCK ST, MELBOURNE, FL, 32935

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $9,042,648

Exercised Options: $9,042,648

Current Obligation: $9,042,648

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV24D0010

IDV Type: IDC

Timeline