DoD's $900M MRAP Contract with ND Defense LLC: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $900,329,488 ($900.3M)
Contractor: ND Defense LLC
Awarding Agency: Department of Defense
Start Date: 2007-07-20
End Date: 2016-12-30
Contract Duration: 3,451 days
Daily Burn Rate: $260.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ACCELERATED CATEGORY I MRAP
Place of Performance
Location: LISLE, DUPAGE County, ILLINOIS, 60532
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $900.3 million to ND DEFENSE LLC for work described as: ACCELERATED CATEGORY I MRAP Key points: 1. Significant investment of $900M in armored vehicles. 2. Full and open competition was utilized, suggesting potential for competitive pricing. 3. No small business participation noted, raising questions about broader economic impact. 4. Long contract duration (3451 days) may indicate sustained need or potential for cost creep.
Value Assessment
Rating: fair
The total award of $900M over 3451 days for MRAP vehicles suggests a substantial per-unit cost. Benchmarking against similar military vehicle contracts is necessary to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically drives competitive pricing. However, the long duration and specific nature of MRAP vehicles might limit the number of truly competitive bids.
Taxpayer Impact: Taxpayer funds are significantly allocated to this contract. While competition aims for efficiency, the large sum warrants scrutiny to ensure optimal use of resources.
Public Impact
Ensures critical armored vehicle capabilities for military operations. Supports a specific defense contractor, ND Defense LLC. Long-term commitment of resources for defense procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of small business participation.
- Long contract duration.
- High total award amount.
Positive Signals
- Full and open competition.
- Essential military equipment.
Sector Analysis
This contract falls within the Defense sector, specifically military armored vehicle manufacturing. Spending benchmarks in this area are highly variable based on vehicle type, technology, and quantity.
Small Business Impact
The data indicates no small business participation in this contract. This suggests that the prime contractor, ND Defense LLC, is likely a large entity, and opportunities for small businesses in the supply chain may be limited.
Oversight & Accountability
Oversight is provided by the Defense Contract Management Agency. The long duration of the contract necessitates ongoing monitoring to ensure performance, cost control, and adherence to terms.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High total contract value.
- Long contract duration.
- Lack of small business involvement.
- Potential for limited competition despite 'full and open' status due to specialization.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, il, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $900.3 million to ND DEFENSE LLC. ACCELERATED CATEGORY I MRAP
Who is the contractor on this award?
The obligated recipient is ND DEFENSE LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $900.3 million.
What is the period of performance?
Start: 2007-07-20. End: 2016-12-30.
What was the average per-unit cost of the MRAP vehicles under this contract, and how does it compare to industry benchmarks for similar vehicles during the contract period?
The total award of $900,032,948.20 over 3451 days for 10 units (implied by 'no': 10) results in an average of approximately $90 million per unit. This figure is exceptionally high and requires detailed comparison with contemporary MRAP acquisition costs, considering specific configurations, technological advancements, and the historical context of MRAP procurement during the 2007-2016 period.
Given the full and open competition, what factors might have limited the number of bidders or influenced the final pricing for these specialized armored vehicles?
Specialized requirements for MRAP vehicles, such as advanced armor, mine resistance, and specific operational capabilities, likely narrowed the field of eligible bidders. High research and development costs, stringent manufacturing standards, and the significant capital investment required to produce such vehicles could also deter potential competitors, potentially leading to less aggressive pricing despite the 'full and open' designation.
What is the strategic importance of these MRAP vehicles, and how effectively has this contract supported the Department of Defense's mission objectives over its duration?
MRAP vehicles were developed to provide enhanced protection against Improvised Explosive Devices (IEDs) and ambushes, significantly reducing casualties in conflict zones. This contract's effectiveness hinges on the vehicles' performance in theater, their contribution to force protection, and their overall reliability. Assessing effectiveness requires examining operational deployment data, maintenance records, and feedback from end-users.
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
Offers Received: 10
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Navistar International Corporation (UEI: 161984646)
Address: 4201 WINFIELD RD, WARRENVILLE, IL, 60555
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $900,825,274
Exercised Options: $900,825,274
Current Obligation: $900,329,488
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: M6785407D5032
IDV Type: IDC
Timeline
Start Date: 2007-07-20
Current End Date: 2016-12-30
Potential End Date: 2016-12-30 00:00:00
Last Modified: 2017-02-13
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