DoD awards $214M truck trailer contract to ND Defense LLC, a sole-source procurement
Contract Overview
Contract Amount: $214,019,656 ($214.0M)
Contractor: ND Defense LLC
Awarding Agency: Department of Defense
Start Date: 2008-05-06
End Date: 2009-02-27
Contract Duration: 297 days
Daily Burn Rate: $720.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: W56HZV08DG097
Place of Performance
Location: WARRENVILLE, DUPAGE County, ILLINOIS, 60555
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $214.0 million to ND DEFENSE LLC for work described as: W56HZV08DG097 Key points: 1. The contract value represents a significant investment in specialized trailer manufacturing. 2. Sole-source procurement raises questions about potential price inflation and limited market engagement. 3. The short performance period suggests a specific, time-sensitive need. 4. The firm-fixed-price contract shifts most risk to the contractor. 5. This award falls within the broader category of defense logistics and equipment support. 6. The absence of small business set-aside indicates a focus on large-scale manufacturing capabilities.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and the specific niche of truck trailer manufacturing for defense. Without competitive bids, it's difficult to ascertain if the $214 million represents a fair market price. The contract's duration of less than a year also makes long-term value assessment difficult. However, the firm-fixed-price structure is generally favorable for the government in controlling costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, ND Defense LLC, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and potentially lead to higher costs for the government.
Taxpayer Impact: The lack of competition means taxpayers may not have received the benefit of lower prices that could have resulted from a competitive bidding process.
Public Impact
The primary beneficiaries are the Department of Defense, which receives essential logistical equipment. The contract delivers specialized truck trailers crucial for military operations and supply chain management. The geographic impact is likely concentrated where the trailers are manufactured and deployed, potentially within the United States. The award supports jobs in the truck trailer manufacturing sector, particularly at ND Defense LLC.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Short contract duration may indicate a reactive procurement rather than strategic planning.
- Lack of transparency in the justification for sole-sourcing.
- Potential for contractor lock-in if no other suppliers exist or are qualified.
Positive Signals
- Firm-fixed-price contract transfers cost overrun risk to the contractor.
- Award to a single, presumably capable, supplier ensures delivery of specialized equipment.
- Contract value indicates a significant requirement met by the award.
Sector Analysis
The truck trailer manufacturing industry is a key component of the broader transportation and logistics sector. This contract falls under the specialized manufacturing of heavy-duty trailers, often requiring adherence to stringent military specifications. The market size for defense-specific trailers can be niche, with a limited number of manufacturers possessing the necessary certifications and production capacity. Comparable spending benchmarks are difficult to establish without more specific details on trailer specifications and quantities.
Small Business Impact
The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the scale and specialized nature of the trailer manufacturing required were beyond the typical capabilities or capacity of small businesses in this sector, or that the primary contractor was deemed the only viable source.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. Accountability is primarily driven by the firm-fixed-price terms, which obligate ND Defense LLC to deliver the specified trailers within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, with justifications for this procurement method usually documented internally.
Related Government Programs
- Defense Logistics Agency (DLA) procurements
- Tactical Vehicle procurements
- Military Mobility Equipment
- Heavy Equipment Transport
Risk Flags
- Sole-source procurement
- Lack of competitive bidding
- Limited transparency in award justification
Tags
defense, department-of-defense, department-of-the-army, truck-trailer-manufacturing, firm-fixed-price, sole-source, large-contract, logistics-equipment, illinois, not-competed
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $214.0 million to ND DEFENSE LLC. W56HZV08DG097
Who is the contractor on this award?
The obligated recipient is ND DEFENSE 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 $214.0 million.
What is the period of performance?
Start: 2008-05-06. End: 2009-02-27.
What specific military requirements or operational needs necessitated a sole-source award for these truck trailers?
The provided data does not specify the exact military requirements or operational needs that led to a sole-source award. Typically, sole-source justifications are based on factors such as unique technical capabilities, urgent and compelling needs where competition is not feasible, or when only one responsible source can provide the required supplies or services. Without further documentation from the Department of Defense, the precise rationale remains unclear. This lack of transparency is a common concern with sole-source procurements, as it limits the public's ability to understand the necessity and potential alternatives.
How does the awarded price of $214 million compare to market rates for similar specialized military truck trailers?
Directly comparing the $214 million award to market rates for similar specialized military truck trailers is challenging without detailed specifications of the trailers procured (e.g., payload capacity, dimensions, specialized features, environmental hardening). Furthermore, the sole-source nature of this contract means there was no competitive bidding process to establish a market-driven price. Generally, sole-source contracts can be at a higher price point than competitively awarded ones due to the absence of price pressure from multiple bidders. To assess value, one would need to benchmark against historical sole-source awards for comparable equipment or, if possible, against commercial equivalents with necessary modifications for military use, factoring in the premium for meeting stringent defense standards.
What is ND Defense LLC's track record with Department of Defense contracts, particularly in truck trailer manufacturing?
The provided data indicates that ND Defense LLC was awarded this specific contract (W56HZV08DG097) by the Department of the Army. However, the data does not offer a comprehensive history of ND Defense LLC's past performance, contract awards, or their track record specifically in truck trailer manufacturing for the DoD. A thorough assessment would require accessing historical contract databases to review past performance reviews, any prior awards for similar equipment, and any instances of contract modifications, disputes, or terminations. Without this broader context, it's difficult to evaluate their established reliability and expertise in this domain.
What are the potential risks associated with awarding a large contract like this on a sole-source basis?
The primary risks associated with sole-source awards, such as this $214 million contract, include a lack of price competition, potentially leading to inflated costs for the government and taxpayers. There's also a reduced incentive for the contractor to innovate or offer cost efficiencies, as they face no direct competition. Furthermore, sole-sourcing can stifle market development by preventing other capable companies from entering the market or demonstrating their capabilities. It can also create a dependency on a single supplier, posing a risk if that supplier faces financial difficulties, production issues, or decides to exit the market. Finally, the lack of transparency in the justification process can raise concerns about fairness and potential favoritism.
How does this contract fit into the broader context of Department of Defense spending on transportation and logistics equipment?
This $214 million contract for truck trailers represents a specific investment within the Department of Defense's substantial budget for transportation and logistics equipment. The DoD relies heavily on a robust supply chain, which includes a wide array of vehicles and support equipment. Contracts for trailers, while perhaps less prominent than those for major weapon systems, are critical for maintaining operational readiness and enabling the movement of personnel, supplies, and equipment across various theaters of operation. This award, being a sole-source procurement, suggests a specialized need that may not be met by standard, competitively sourced vehicles, highlighting the complexity and diversity of the DoD's equipment acquisition strategies.
Industry Classification
NAICS: Manufacturing › Motor Vehicle Body and Trailer Manufacturing › Truck Trailer 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: Navistar International Corporation (UEI: 161984646)
Address: 4201 WINFIELD RD, WARRENVILLE, IL, 90
Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $214,019,656
Exercised Options: $214,019,656
Current Obligation: $214,019,656
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W56HZV08DG097
IDV Type: IDC
Timeline
Start Date: 2008-05-06
Current End Date: 2009-02-27
Potential End Date: 2009-02-27 00:00:00
Last Modified: 2013-11-06
More Contracts from ND Defense LLC
- Category I Mrap — $1.4B (Department of Defense)
- Accelerated Category I Mrap — $900.3M (Department of Defense)
- Category I Mrap — $760.1M (Department of Defense)
- 1200 Category I Mrap — $736.7M (Department of Defense)
- Long Wheel Base Rolling Chassis — $702.9M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)