DoD's $550M MRAP contract awarded to General Dynamics for armored vehicle manufacturing

Contract Overview

Contract Amount: $550,295,571 ($550.3M)

Contractor: General Dynamics Land Systems - Force Protection Inc.

Awarding Agency: Department of Defense

Start Date: 2007-04-23

End Date: 2012-01-24

Contract Duration: 1,737 days

Daily Burn Rate: $316.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CATEGORY II MRAP

Place of Performance

Location: LADSON, BERKELEY County, SOUTH CAROLINA, 29456

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $550.3 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC. for work described as: CATEGORY II MRAP Key points: 1. Value-for-money assessment indicates potential for cost savings through competitive bidding. 2. Competition dynamics show a full and open process, suggesting a healthy market. 3. Risk indicators are moderate, given the firm-fixed-price contract type and established contractor. 4. Performance context is tied to military vehicle production, a critical but complex sector. 5. Sector positioning places this contract within the defense industrial base for armored vehicles.

Value Assessment

Rating: good

The $550 million contract value for Category II MRAPs appears reasonable given the nature of military vehicle production. While specific per-unit cost benchmarks are not provided, the firm-fixed-price contract type suggests that the government has locked in costs, mitigating risk of overruns. Comparing this to other large-scale armored vehicle procurements would offer further insight into its value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 10 bids suggests a competitive environment, which typically drives better pricing and innovation. This level of competition is generally favorable for the government and taxpayers.

Taxpayer Impact: A robust competition ensures that taxpayer dollars are used efficiently by fostering a market where contractors must offer competitive pricing to win awards.

Public Impact

Benefits the Department of Defense by providing essential armored vehicles for personnel protection. Delivers Category II Mine-Resistant Ambush Protected (MRAP) vehicles, crucial for modern warfare. Geographic impact is primarily within South Carolina, where the contractor is located. Workforce implications include job creation and sustainment within the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial pricing does not account for unforeseen production challenges.
Dependence on a single contractor for a critical defense asset could pose supply chain risks.
Long-term sustainment and maintenance costs for these vehicles are not detailed in this award.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a healthy market and potential for competitive pricing.
Award to an established defense contractor with experience in vehicle manufacturing.

Sector Analysis

This contract falls within the defense industrial base, specifically the manufacturing of military armored vehicles. The market for such specialized equipment is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. The total value of $550 million reflects the substantial investment required for producing advanced armored platforms like the MRAP.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting plans for small businesses in the provided data. This suggests that the primary award went to a large defense contractor, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms. As a firm-fixed-price award, cost-related oversight may be less intensive than cost-plus contracts. Transparency is facilitated through contract award databases, and the Inspector General's office would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Mine-Resistant Ambush Protected (MRAP) Vehicles
Tactical Wheeled Vehicles
Defense Manufacturing Contracts
Armored Vehicle Procurement

Risk Flags

Potential for cost overruns
Schedule delays
Quality control issues
Supply chain disruptions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $550.3 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC.. CATEGORY II MRAP

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 $550.3 million.

What is the period of performance?

Start: 2007-04-23. End: 2012-01-24.

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

General Dynamics Land Systems (GDLS), through its Force Protection division, has a significant track record in the production of MRAP vehicles. They were a key player in the initial surge production of various MRAP variants to meet urgent wartime needs in Iraq and Afghanistan. Their experience encompasses design, manufacturing, and sustainment of these complex armored platforms. The company has delivered thousands of MRAPs across different categories and configurations. This specific contract, awarded in 2007, was part of the broader effort to equip forces with enhanced survivability against IEDs and ambushes. GDLS's history suggests a capability to handle large-scale production, though performance on specific contracts can vary based on program management, funding, and evolving requirements.

How does the $550 million award compare to other MRAP procurement contracts?

The $550 million award for Category II MRAPs is substantial, reflecting the high cost of producing specialized, survivable military vehicles. During the peak of MRAP production in the late 2000s and early 2010s, the U.S. government awarded numerous contracts totaling billions of dollars for various MRAP variants from multiple manufacturers, including GDLS, BAE Systems, and Navistar. This particular contract, awarded in 2007, was among the earlier large awards for the MRAP program. The per-unit cost of MRAPs varied significantly by variant and contract, but generally ranged from several hundred thousand to over a million dollars per vehicle, depending on configuration and survivability features. Therefore, $550 million for a significant quantity of Category II MRAPs aligns with the scale and cost profile of major defense procurements during that era.

What are the primary risks associated with this firm-fixed-price contract for armored vehicles?

While a firm-fixed-price (FFP) contract is generally advantageous for cost control, risks remain. For armored vehicle production, the primary risk is that the contractor may face unforeseen increases in material costs (e.g., specialized steel, advanced composites) or labor expenses that erode their profit margin. This could incentivize the contractor to cut corners on quality or performance to maintain profitability, although stringent quality assurance and testing by the government aim to mitigate this. Another risk is schedule slippage if production challenges arise, potentially impacting military readiness. The government also bears the risk if the initial technical specifications prove inadequate or require significant changes mid-production, which could necessitate costly contract modifications or a new procurement.

How effective has the MRAP program been in enhancing soldier survivability?

The MRAP program has been widely credited with significantly enhancing soldier survivability, particularly against Improvised Explosive Devices (IEDs) and ambushes. The unique V-shaped hull design deflects blast energy away from the crew compartment, drastically reducing casualties compared to conventional armored personnel carriers and Humvees in blast scenarios. While exact figures vary, studies and anecdotal evidence from military personnel in theaters like Iraq and Afghanistan strongly suggest that MRAPs saved thousands of lives. However, the program also faced criticisms regarding the high acquisition costs, logistical challenges due to their size and weight, and potential trade-offs in maneuverability and fuel efficiency compared to lighter vehicles. Despite these drawbacks, the MRAP's contribution to survivability in specific threat environments is undeniable.

What has been the historical spending trend for military armored vehicle manufacturing by the Department of Defense?

Historical spending on military armored vehicle manufacturing by the Department of Defense has fluctuated significantly based on geopolitical events and strategic priorities. During periods of active conflict, such as the wars in Iraq and Afghanistan, spending surged dramatically to meet urgent operational needs, exemplified by the rapid expansion of the MRAP program. Following these conflicts, spending typically decreased as the focus shifted towards modernization, sustainment of existing fleets, and development of next-generation platforms. The DoD's budget allocates funds for procurement, research and development, and sustainment of various armored vehicles, including tanks, infantry fighting vehicles, and protected mobility vehicles. Spending levels are influenced by threat assessments, technological advancements, and overall defense budget constraints, often involving multi-year procurement contracts for large platforms.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785407R5000

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 9801 HIGHWAY 78 # 3, LADSON, SC, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $550,295,571

Exercised Options: $550,295,571

Current Obligation: $550,295,571

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5031

IDV Type: IDC

Timeline