DoD Awards $95.9M for 227 NG SECMS to AM General LLC, Amidst Limited Competition Concerns
Contract Overview
Contract Amount: $95,870,465 ($95.9M)
Contractor: AM General LLC
Awarding Agency: Department of Defense
Start Date: 2025-08-29
End Date: 2029-03-31
Contract Duration: 1,310 days
Daily Burn Rate: $73.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DELIVERY ORDER TO PURCHASE 227 NG SECMS.
Place of Performance
Location: SOUTH BEND, ST JOSEPH County, INDIANA, 46617
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $95.9 million to AM GENERAL LLC for work described as: DELIVERY ORDER TO PURCHASE 227 NG SECMS. Key points: 1. Significant contract value of $95.9 million for armored vehicle components. 2. AM General LLC is the sole awardee, raising questions about competition. 3. Potential risk associated with limited competition and single-source reliance. 4. Spending falls within the Defense sector, specifically military vehicle manufacturing.
Value Assessment
Rating: fair
The contract value of $95.9 million for 227 NG SECMS appears substantial. Benchmarking against similar military vehicle component contracts is difficult without more specific data on the 'NG SECMS' designation. However, the lack of competition suggests potential for overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded via a sole-source method, indicating that only one vendor, AM General LLC, was considered. This significantly limits price discovery and competitive pressure, potentially leading to higher costs for the government.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Taxpayers may be overpaying for critical military vehicle components due to lack of competition. Reliance on a single supplier could create vulnerabilities in the supply chain for the Department of the Army. The long contract duration (2025-2029) amplifies the potential financial impact of non-competitive pricing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Potential for inflated pricing
- Supply chain risk
Positive Signals
- Award to established defense contractor
- Long-term supply agreement
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of military armored vehicles and components. Spending in this area is critical for national security but often involves complex, specialized production that can limit competition.
Small Business Impact
The award was made to AM General LLC, a large defense contractor. There is no indication that small businesses were involved in this specific sole-source award, suggesting limited opportunities for SMB participation in this particular procurement.
Oversight & Accountability
The sole-source nature of this award warrants close oversight by the Department of Defense to ensure fair pricing and prevent potential waste, fraud, or abuse. Accountability for the justification of the sole-source decision is crucial.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Potential for inflated pricing due to lack of competitive pressure.
- Reliance on a single supplier creates supply chain vulnerability.
- Long contract duration amplifies financial risk.
- Lack of small business participation noted.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, in, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $95.9 million to AM GENERAL LLC. DELIVERY ORDER TO PURCHASE 227 NG SECMS.
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 $95.9 million.
What is the period of performance?
Start: 2025-08-29. End: 2029-03-31.
What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?
The justification for a sole-source award typically involves factors like unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The government should have conducted a price analysis, potentially using historical data or independent cost estimates, to validate the reasonableness of AM General LLC's pricing. Without this information, it's difficult to assess the value.
What are the potential risks to the Department of the Army if AM General LLC faces production issues or supply chain disruptions during the contract period?
A sole-source award creates significant supply chain risk. If AM General LLC experiences production delays, quality control issues, or faces its own supply chain problems, the Army's ability to procure these critical NG SECMS components could be severely impacted. This could lead to delays in military readiness and potentially necessitate emergency, higher-cost procurements from alternative, less-prepared sources.
How does the pricing of this sole-source contract compare to potentially competitive bids for similar military vehicle components, and what is the estimated taxpayer impact?
Direct comparison is challenging without competitive bid data. However, sole-source contracts inherently lack the downward price pressure of competition, suggesting this contract may be priced higher than if it were competed. The estimated taxpayer impact is the difference between the awarded price and what a competitive process might have yielded, potentially millions of dollars over the contract's life.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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: $95,870,465
Exercised Options: $95,870,465
Current Obligation: $95,870,465
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV22D0002
IDV Type: IDC
Timeline
Start Date: 2025-08-29
Current End Date: 2029-03-31
Potential End Date: 2029-03-31 12:03:00
Last Modified: 2025-09-19
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