Department of Defense awards $372M contract for military vehicle components, with a significant portion allocated to a single vendor

Contract Overview

Contract Amount: $372,089,496 ($372.1M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2010-01-14

End Date: 2012-12-31

Contract Duration: 1,082 days

Daily Burn Rate: $343.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MODIFIED PLL - PLUS VEHICLE

Place of Performance

Location: WARRENVILLE, DUPAGE County, ILLINOIS, 60555

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $372.1 million to ND DEFENSE LLC for work described as: MODIFIED PLL - PLUS VEHICLE Key points: 1. Contract value of $372 million indicates substantial investment in military vehicle sustainment and upgrades. 2. The contract's duration and firm-fixed-price structure suggest a focus on predictable costs for long-term needs. 3. Analysis of vendor performance and pricing against benchmarks is crucial given the contract's scale. 4. The 'IL' (Illinois) state code may point to specific manufacturing or logistical hubs relevant to this contract. 5. Understanding the competitive landscape for this type of specialized military vehicle component is key to assessing value. 6. The absence of small business set-asides warrants examination of subcontracting opportunities. 7. The contract's modification status suggests ongoing adjustments to meet evolving defense requirements.

Value Assessment

Rating: fair

The total award amount of $372 million over its period of performance is substantial. Benchmarking this against similar contracts for military vehicle components is difficult without more specific details on the exact components and services procured. The firm-fixed-price structure aims for cost certainty, but the value-for-money assessment would depend heavily on the negotiated unit prices and the contractor's efficiency. The modification history (implied by 'MODIFIED PLL') could indicate scope changes that impact the overall value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the specific number of bids received is not provided in the data. A full and open competition is generally expected to yield competitive pricing, but the ultimate price discovery depends on the number and quality of the bids submitted and the government's negotiation strategy.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open competition, which can lead to more efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. military branches requiring armored vehicle and tank components for operational readiness. Services delivered likely include the manufacturing, repair, and sustainment of critical vehicle parts. The geographic impact is likely concentrated around defense manufacturing facilities and military bases, with a specific mention of Illinois. Workforce implications may include skilled labor in manufacturing, engineering, and logistics within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the components procured makes it hard to assess if the pricing is competitive.
The contract's modification history could indicate scope creep or unforeseen cost increases.
No information on small business participation is provided, raising questions about broader economic impact.
The specific nature of 'military armored vehicle, tank, and tank component manufacturing' is broad and may encompass high-risk, specialized production.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract type provides cost predictability for the government.
The contract's duration implies a stable, long-term need being met.
The Department of the Navy's award indicates a critical need within a major defense branch.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of heavy military vehicles and their components. This is a highly specialized and capital-intensive segment of the manufacturing industry, characterized by stringent quality requirements and long production cycles. The market size is directly tied to defense spending priorities and geopolitical factors. Comparable spending benchmarks would typically be found within the broader categories of defense procurement for ground vehicles and associated systems.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was open to all responsible sources, including large defense contractors. Consequently, there may be limited direct subcontracting opportunities for small businesses unless the prime contractor voluntarily includes them in their supply chain. The impact on the small business ecosystem would depend on the prime contractor's subcontracting plans and the availability of small businesses capable of meeting the specialized requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Department of Defense's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance metrics, delivery schedules, and quality assurance clauses. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Ground Vehicle Systems
Armored Vehicle Manufacturing
Defense Logistics Support
Military Component Procurement
Naval Systems Command Contracts

Risk Flags

Contract Modification History
Lack of Specific Component Detail
No Small Business Set-Aside Indicated
Potential for Long-Term Cost Fluctuations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $372.1 million to ND DEFENSE LLC. MODIFIED PLL - PLUS VEHICLE

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 Navy).

What is the total obligated amount?

The obligated amount is $372.1 million.

What is the period of performance?

Start: 2010-01-14. End: 2012-12-31.

What specific types of military armored vehicle and tank components are covered under this contract?

The provided data classifies the contract under NAICS code 336992, which pertains to 'Military Armored Vehicle, Tank, and Tank Component Manufacturing.' This broad category suggests the contract could encompass a wide range of parts, including but not limited to, engine components, transmission parts, armor plating, suspension systems, weapon mounts, and other critical sub-assemblies for various types of armored fighting vehicles and tanks used by the Department of Defense. Without access to the detailed contract line item numbers (CLINs) or the contract's statement of work, the precise nature of the components remains unspecified. However, the substantial award value implies significant quantities or high-value, complex components are involved.

How does the $372 million award compare to historical spending on similar military vehicle components by the Department of Defense?

Comparing the $372 million award requires analyzing historical spending data for similar NAICS codes (336992) and contract types within the Department of Defense, specifically the Department of the Navy. A preliminary review of federal procurement data indicates that contracts for military vehicle manufacturing and components can range from tens of millions to hundreds of millions of dollars, depending on the specific vehicle platform, the scope of work (e.g., new production vs. sustainment), and the duration of the contract. This $372 million award appears to be a significant, multi-year commitment, suggesting it covers a substantial portion of the demand for these components over its performance period. Further analysis would involve identifying comparable contracts awarded over the past 5-10 years to establish a trend and assess if this award represents an increase or decrease in spending intensity for these specific types of components.

What are the key performance indicators (KPIs) and quality assurance measures associated with this contract?

While the specific KPIs and quality assurance measures are not detailed in the provided summary data, firm-fixed-price contracts, especially for defense manufacturing, typically include stringent performance requirements. These often involve on-time delivery schedules, adherence to technical specifications and drawings, defect rates (e.g., parts per million defective), and compliance with military standards (e.g., MIL-SPEC). Quality assurance would likely involve government inspections at the contractor's facility, testing of components, and acceptance procedures upon delivery. Failure to meet these KPIs or quality standards could result in penalties, contract termination, or withholding of payments, underscoring the importance of robust oversight mechanisms.

What is the track record of ND DEFENSE LLC in fulfilling similar defense manufacturing contracts?

Information regarding ND DEFENSE LLC's specific track record is not provided in the summary data. To assess their performance, one would need to examine their contract history within the Federal Procurement Data System (FPDS) or similar databases. Key aspects to investigate would include the number and value of previous contracts awarded, their performance ratings (if available), any history of contract modifications, disputes, or terminations, and their experience with manufacturing military armored vehicles and tank components. A contractor's past performance is a critical factor in source selection and is often used to evaluate their capability to successfully execute current contracts.

What are the potential risks associated with the 'MODIFIED PLL' designation and the contract's duration?

The 'MODIFIED PLL' designation suggests this contract is a modification of a previous or existing contract, likely a "Procurement List" or similar established vehicle. Modifications can introduce risks such as scope creep, potential cost overruns if not managed carefully, and delays if the modification process is complex. The contract's duration, spanning from January 14, 2010, to December 31, 2012 (approximately three years), implies a long-term commitment. Risks associated with this duration include potential obsolescence of technology, changes in military requirements, fluctuations in material costs, and the contractor's sustained ability to meet performance standards over an extended period. Effective program management and contract oversight are crucial to mitigate these risks.

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: Navistar International Corporation (UEI: 161984646)

Address: 4201 WINFIELD RD, WARRENVILLE, IL, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $372,089,496

Exercised Options: $372,089,496

Current Obligation: $372,089,496

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5032

IDV Type: IDC

Timeline