DoD awards $400.7M for armored vehicle production, with a significant portion for spare parts

Contract Overview

Contract Amount: $400,720,831 ($400.7M)

Contractor: General Dynamics Land Systems - Force Protection Inc.

Awarding Agency: Department of Defense

Start Date: 2009-04-08

End Date: 2011-09-09

Contract Duration: 884 days

Daily Burn Rate: $453.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CAT I INDEPENDENT SUSPENSION

Place of Performance

Location: LADSON, CHARLESTON County, SOUTH CAROLINA, 29456

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $400.7 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC. for work described as: CAT I INDEPENDENT SUSPENSION Key points: 1. Contract value indicates substantial investment in military vehicle sustainment and readiness. 2. The award was made under full and open competition, suggesting a competitive market. 3. A high number of delivery orders (10) suggests ongoing demand and potential for phased delivery. 4. The contract duration of 884 days points to a medium-term commitment for production and delivery. 5. The prime contractor has a significant presence in the defense manufacturing sector. 6. The contract's focus on armored vehicles highlights a critical area of defense spending.

Value Assessment

Rating: good

The total contract value of $400.7 million for armored vehicles and components appears reasonable given the nature of defense procurement. Benchmarking against similar large-scale vehicle production contracts would provide further context, but the scale suggests a significant commitment. The firm-fixed-price structure generally offers cost certainty for the government, though the final cost is tied to delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were allowed to bid. The presence of 10 delivery orders suggests a potentially active bidding environment over the life of the contract, or a single large award with multiple delivery phases. The level of competition is a positive sign for price discovery and potentially achieving better value.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, which is beneficial for taxpayers by ensuring the government is not overpaying for essential defense equipment and services.

Public Impact

The primary beneficiaries are the U.S. Army, receiving critical armored vehicle components and potentially new vehicles. Services delivered include the manufacturing and supply of armored vehicles and associated parts, crucial for military operations. The contract's impact is primarily national, supporting U.S. military readiness and defense capabilities. Workforce implications include jobs in manufacturing, engineering, and logistics at the prime contractor and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if production complexities are underestimated.
Supply chain disruptions could impact delivery timelines and costs.
Long-term sustainment costs for these vehicles may be substantial beyond this contract.
Dependence on a single prime contractor for a critical defense capability.
Geopolitical events could alter demand or operational requirements for these vehicles.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Firm-fixed-price contract type provides cost certainty for the government.
Contractor is a well-established entity in defense manufacturing.
Multiple delivery orders indicate ongoing need and potential for sustained production.
Focus on armored vehicles addresses a key military requirement.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the manufacturing of armored vehicles. The market for such specialized defense equipment is characterized by high barriers to entry, significant R&D investment, and a limited number of prime contractors capable of meeting stringent military specifications. Spending in this sector is driven by national security priorities and the need to modernize military fleets.

Small Business Impact

While the prime contractor is a large entity, the contract does not explicitly indicate a small business set-aside. However, large defense contracts often involve significant subcontracting opportunities. The prime contractor's adherence to subcontracting goals with small businesses will be crucial for the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight is likely managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contract compliance, quality, and timely delivery. The firm-fixed-price nature of the contract provides a degree of financial oversight. Transparency is generally maintained through contract award databases, though specific production details may be sensitive.

Related Government Programs

Armored Multi-Purpose Vehicle (AMPV) Program
Stryker Family of Vehicles
Joint Light Tactical Vehicle (JLTV)
Bradley Fighting Vehicle System
Mine-Resistant Ambush Protected (MRAP) Vehicles

Risk Flags

Potential for supply chain disruptions
Complexity of integrated systems
Long-term sustainment cost uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $400.7 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC.. CAT I INDEPENDENT SUSPENSION

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $400.7 million.

What is the period of performance?

Start: 2009-04-08. End: 2011-09-09.

What is the historical spending trend for armored vehicle manufacturing and sustainment by the Department of Defense?

Historical spending on armored vehicle manufacturing and sustainment by the DoD has been substantial and cyclical, often tied to major modernization efforts or wartime demands. For instance, significant investments were made during the conflicts in Iraq and Afghanistan for Mine-Resistant Ambush Protected (MRAP) vehicles. More recently, programs like the Armored Multi-Purpose Vehicle (AMPV) and the Joint Light Tactical Vehicle (JLTV) represent ongoing modernization initiatives. Annual spending can fluctuate based on program maturity, congressional appropriations, and evolving threat assessments. Analyzing trends requires looking at specific vehicle programs and broader categories like 'Ground Combat Vehicles' or 'Tactical Vehicles' over multi-year periods to understand sustained investment levels and shifts in priorities.

How does the per-unit cost of the vehicles or components under this contract compare to similar programs?

Determining the precise per-unit cost for this specific contract is challenging without knowing the exact mix of vehicles and components delivered and their associated pricing breakdowns. However, armored vehicles are inherently complex and expensive due to advanced armor, mobility systems, and weapon integration. Programs like the Bradley Fighting Vehicle or the Stryker family have seen per-unit costs ranging from several million dollars upwards, depending on the variant and configuration. The AMPV program, for example, has reported unit costs in the millions. Benchmarking would require access to detailed cost data for comparable platforms, which is often sensitive. The $400.7 million total value, spread over potentially multiple vehicles and numerous parts, suggests unit costs likely fall within the expected high range for this class of equipment.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators (KPIs) for a contract like this typically revolve around delivery schedule adherence, quality control, and cost management. For delivery orders, meeting the specified quantities by the required dates is paramount. Quality KPIs would include defect rates, compliance with technical specifications, and successful testing results. Cost management KPIs would focus on adherence to the firm-fixed-price, minimizing deviations, and efficient use of resources. Performance might also be measured by the contractor's responsiveness to issues, effectiveness of their quality assurance system, and overall program management. The government's Contracting Officer's Representative (COR) and DCMA personnel would monitor these KPIs throughout the contract's duration.

What is the track record of General Dynamics Land Systems - Force Protection Inc. in delivering similar armored vehicle contracts?

General Dynamics Land Systems (GDLS) and its acquired entities, like Force Protection Inc., have a long and extensive track record in producing and sustaining armored vehicles for the U.S. military and international allies. GDLS is a prime contractor for programs such as the Abrams Main Battle Tank, Stryker family of vehicles, and has been involved in various upgrades and component manufacturing for other platforms. Force Protection was known for its specialized mine-resistant vehicles like the Cougar. Their collective experience includes navigating complex production schedules, meeting stringent military requirements, and managing large-scale defense contracts. While specific performance metrics for every contract are not public, their continued role as a major defense supplier indicates a generally reliable performance history in this specialized sector.

Are there any significant risks associated with the technology or manufacturing process for these armored vehicles?

Risks associated with armored vehicle technology and manufacturing can be multifaceted. Technological risks might include the integration of new survivability features, advanced armor materials, or complex electronic systems, which could present unforeseen challenges during development or production. Manufacturing risks often involve supply chain vulnerabilities for specialized components (e.g., advanced composites, engines, electronics), potential production bottlenecks, and the need for highly skilled labor. Ensuring consistent quality across thousands of parts and complex assemblies is also a challenge. Furthermore, evolving threats can necessitate design changes mid-production, introducing schedule and cost risks. The firm-fixed-price nature of this contract implies the contractor assumes much of this risk, but significant issues could still lead to delays or necessitate contract modifications.

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, 29456

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $400,720,831

Exercised Options: $400,720,831

Current Obligation: $400,720,831

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5031

IDV Type: IDC

Timeline