DoD's $62.7M armored vehicle contract awarded to General Dynamics, raising questions about competition and value

Contract Overview

Contract Amount: $62,717,758 ($62.7M)

Contractor: General Dynamics Land Systems - Force Protection Inc.

Awarding Agency: Department of Defense

Start Date: 2006-12-05

End Date: 2008-11-11

Contract Duration: 707 days

Daily Burn Rate: $88.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JERRV 6X6

Place of Performance

Location: LADSON, CHARLESTON County, SOUTH CAROLINA, 29456

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $62.7 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC. for work described as: JERRV 6X6 Key points: 1. Contract awarded via sole-source justification, limiting competitive pressure on pricing. 2. High value for a single delivery order suggests significant scope or specialized equipment. 3. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 4. Limited competition may lead to suboptimal price discovery and taxpayer value. 5. Contract duration of 707 days indicates a substantial period for delivery and performance. 6. Awarded by the Department of the Navy, indicating a specific military need. 7. The 'SC' contract type suggests a specific classification or urgency.

Value Assessment

Rating: questionable

The contract's value of $62.7 million for a single delivery order is substantial. Without comparable sole-source awards for similar armored vehicles, it's difficult to benchmark the price. The fixed-price nature, while beneficial for budget certainty, can sometimes lead to higher initial costs compared to cost-reimbursable contracts if not meticulously negotiated. The lack of competition is a primary driver for questioning the value for money, as it removes the incentive for the contractor to offer the most competitive price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Land Systems - Force Protection Inc., was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards are sometimes justified for unique capabilities or urgent needs, they inherently limit the number of potential suppliers and can reduce the downward pressure on prices that typically arises from a competitive environment.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple companies to bid and drive down costs through competition.

Public Impact

The primary beneficiaries are the U.S. military personnel who will operate the armored vehicles. The contract delivers specialized military hardware, likely for tactical or protective roles. The geographic impact is primarily within the Department of Defense's operational sphere, with potential deployment globally. Workforce implications include skilled manufacturing and engineering roles within General Dynamics and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal value.
Sole-source justification requires rigorous review to ensure it was truly necessary.
Fixed-price contract with a high value could mask inefficiencies if not closely monitored.
Limited transparency due to sole-source nature makes independent value assessment challenging.

Positive Signals

Award to a known defense contractor suggests established manufacturing capabilities.
Fixed-price contract provides cost certainty for the procuring agency.
The 'SC' contract type might indicate a strategic or specialized procurement.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on armored vehicles. The market for military vehicles is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve other large-scale vehicle procurements by various military branches, often awarded through competitive bids or, in specific cases, sole-source justifications for unique platforms.

Small Business Impact

There is no indication of small business set-asides or subcontracting requirements in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless General Dynamics voluntarily includes them in its supply chain. Further investigation into subcontracting plans would be needed to assess any potential benefits or drawbacks for the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Inspector General (IG) reports related to defense procurements could offer insights into accountability. Transparency is limited due to the sole-source nature, making public oversight more challenging. The fixed-price contract type implies that cost overruns are the contractor's responsibility, but performance and quality oversight remain crucial.

Related Government Programs

Department of Defense Vehicle Procurement
Armored Vehicle Manufacturing
Military Hardware Acquisition
Naval Systems Command Contracts

Risk Flags

Sole-source award lacks competitive pricing.
High value for a single delivery order warrants scrutiny.
Potential for suboptimal value due to limited competition.
Contract type and justification require further review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.7 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC.. JERRV 6X6

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $62.7 million.

What is the period of performance?

Start: 2006-12-05. End: 2008-11-11.

What is the specific type of armored vehicle being procured and its intended operational role?

The provided data indicates the contract is for 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' under NAICS code 336992. While the exact model is not specified, the context of a sole-source award by the Department of the Navy suggests a specialized or unique platform. These vehicles are typically designed for troop transport, combat support, or reconnaissance in high-threat environments, offering protection against ballistic threats and IEDs. The substantial value of $62.7 million for a single delivery order implies a significant quantity or highly advanced technological features, possibly related to survivability, mobility, or integrated weapon systems.

What was the justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or when a compelling urgency precludes the use of competitive procedures. For defense contracts, this often involves proprietary technology, unique manufacturing capabilities, or critical national security needs that cannot be met by other vendors. The specific justification for this $62.7 million award to General Dynamics Land Systems - Force Protection Inc. would be documented in the contract file, likely citing reasons such as unique design, existing platform integration, or a critical operational requirement that necessitated immediate procurement from the sole known provider. Without access to that official justification, the precise rationale remains speculative.

How does the $62.7 million contract value compare to similar armored vehicle procurements by the DoD?

Benchmarking the $62.7 million value requires comparing it to similar armored vehicle procurements, ideally for comparable platforms and quantities. However, as this was a sole-source award for a single delivery order, direct comparisons are challenging. Historically, large armored vehicle programs, especially those involving new designs or significant upgrades, can range from tens of millions to billions of dollars. For instance, the procurement of Abrams tanks or Stryker vehicles involves substantial funding over multiple years and competitive contracts. A single delivery order of this magnitude suggests either a large batch of vehicles, highly specialized configurations, or components with significant unit costs. Without more specific details on the vehicle type and quantity, a precise comparison is difficult, but the value is substantial for a single award action.

What are the potential risks associated with a sole-source fixed-price contract of this magnitude?

A sole-source fixed-price contract of $62.7 million presents several risks. Firstly, the lack of competition means the government may not have achieved the lowest possible price, potentially leading to reduced value for taxpayer money. Secondly, while fixed-price shifts cost overrun risk to the contractor, it can incentivize the contractor to cut corners on quality or performance if not rigorously overseen, especially if the initial price was set too high due to the absence of competitive pressure. Thirdly, the sole-source justification itself carries risk if it was not adequately supported, potentially indicating a failure in market research or strategic sourcing. Finally, the long-term implications could include reinforcing a single supplier's market dominance, making future competition more difficult.

What is the track record of General Dynamics Land Systems - Force Protection Inc. in delivering similar military vehicles?

General Dynamics Land Systems (GDLS) and its subsidiary Force Protection Inc. have a significant track record in developing and manufacturing armored vehicles for the U.S. military and allied nations. Force Protection is known for its mine-resistant ambush-protected (MRAP) vehicles, such as the Cougar and Buffalo. GDLS is a major producer of the Abrams main battle tank and the Stryker family of vehicles. Their extensive experience suggests a high level of technical capability and manufacturing capacity. However, like any large defense contractor, they have faced scrutiny over program costs, delivery schedules, and performance on various contracts throughout their history. The specific performance on this particular sole-source contract would be detailed in internal DoD performance reviews.

How does this contract fit into the broader context of Department of the Navy's armored vehicle spending?

This contract represents a specific procurement action within the Department of the Navy's overall spending on ground combat and support vehicles. While the Navy's primary focus is naval power, it does operate ground forces, particularly the Marine Corps, which requires a range of armored vehicles for expeditionary operations. Spending on such platforms is driven by evolving threats, modernization efforts, and strategic requirements. This $62.7 million award, being a sole-source acquisition, suggests a specialized need that may not be met by standard, competitively procured vehicle fleets. It fits into a pattern of targeted acquisitions to fulfill unique operational capabilities, complementing larger, more broadly competed vehicle programs.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 9801 HWY 78 STE 3, LADSON, SC, 29456

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: $62,717,758

Exercised Options: $62,717,758

Current Obligation: $62,717,758

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5006

IDV Type: IDC

Timeline