Department of Defense awards $702.9M for long wheel base rolling chassis, with a significant portion allocated to ND Defense LLC

Contract Overview

Contract Amount: $702,861,066 ($702.9M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2012-01-06

End Date: 2015-12-23

Contract Duration: 1,447 days

Daily Burn Rate: $485.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LONG WHEEL BASE ROLLING CHASSIS

Place of Performance

Location: LISLE, DUPAGE County, ILLINOIS, 60532

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $702.9 million to ND DEFENSE LLC for work described as: LONG WHEEL BASE ROLLING CHASSIS Key points: 1. Value for money appears fair given the contract duration and scope, though specific performance metrics are not detailed. 2. Competition dynamics indicate a full and open process, suggesting a potentially competitive pricing environment. 3. Risk indicators are moderate, with contract type being firm fixed price, which shifts risk to the contractor. 4. Performance context is limited to delivery orders against a larger contract, making granular assessment difficult. 5. Sector positioning is within military vehicle manufacturing, a critical but specialized area of defense spending.

Value Assessment

Rating: fair

The total award of $702.9 million over approximately four years for rolling chassis suggests a substantial investment. Benchmarking against similar contracts for armored vehicle components is challenging without more specific technical details. However, the firm fixed-price nature of the contract implies that the contractor bears the cost overruns, which can be a positive indicator for the government if managed effectively. The base award of $48.6 million indicates an initial commitment, with the remainder being delivery orders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach is generally expected to foster a competitive environment, potentially leading to better pricing and innovation. The specific number of bidders is not provided, but the 'full and open' designation suggests multiple interested parties participated.

Taxpayer Impact: A full and open competition process is favorable for taxpayers as it maximizes the potential for competitive pricing and ensures that the government is not limited to a single provider, thereby avoiding potential price gouging.

Public Impact

The primary beneficiaries are the Department of Defense, which receives essential components for military vehicles. Services delivered include the provision of long wheel base rolling chassis, a foundational element for various armored vehicles. The geographic impact is primarily centered around the contractor's operations in Illinois, with potential downstream effects on the national defense industrial base. Workforce implications include employment opportunities within the defense manufacturing sector, particularly at ND Defense LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the contractor's efficiency and effectiveness.
The long duration of the contract and the delivery order structure could lead to scope creep if not managed carefully.
Reliance on a single contractor for a significant portion of the award warrants close monitoring of their financial stability and production capacity.

Positive Signals

Firm fixed-price contract type shifts cost overrun risk to the contractor.
Full and open competition suggests a robust bidding process that could lead to competitive pricing.
The contract supports a critical component of the defense industrial base, ensuring supply chain continuity for military vehicles.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on armored vehicle components. The market for such specialized chassis is relatively niche, dominated by a few key players capable of meeting stringent military specifications. Spending in this area is driven by defense modernization programs and the need to replace aging vehicle fleets. Comparable spending benchmarks would typically involve other large-scale vehicle manufacturing contracts within the DoD.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting plans for this contract. As a large prime contract likely involving significant manufacturing capabilities, the primary awardee is expected to be a large business. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the supply chain.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Transparency is facilitated through contract award databases, but detailed operational oversight information is typically internal to the agency. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Armored Vehicle Manufacturing
Defense Contract Awards
Rolling Chassis Procurement
Department of Defense Supply Chain

Risk Flags

Potential for delivery delays
Quality control risks
Contractor financial stability concerns
Lack of detailed performance metrics
Scope creep potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $702.9 million to ND DEFENSE LLC. LONG WHEEL BASE ROLLING CHASSIS

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 $702.9 million.

What is the period of performance?

Start: 2012-01-06. End: 2015-12-23.

What is the track record of ND Defense LLC in fulfilling similar large-scale defense contracts?

Information regarding ND Defense LLC's specific track record on similar large-scale defense contracts is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance history, including on-time delivery rates, quality control metrics, and any history of contract disputes or modifications. Examining their financial stability and production capacity would also be crucial to gauge their ability to handle the scale of this award. Without this historical context, it is difficult to definitively assess their reliability for this specific contract.

How does the awarded price compare to market rates for similar long wheel base rolling chassis?

Direct comparison of the awarded price to current market rates for similar long wheel base rolling chassis is challenging without detailed specifications and volume data. The total award of $702.9 million is spread over multiple years and includes delivery orders, making a simple per-unit cost difficult to ascertain and benchmark. Factors such as specialized armor requirements, unique configurations, and the firm fixed-price nature of the contract can significantly influence pricing. A thorough market analysis would involve comparing the unit price (once derivable) against quotes from other manufacturers for comparable military-grade chassis, considering the specific technical requirements and the competitive landscape.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks for the Department of Defense in this contract include potential delays in delivery, quality control issues, and contractor financial instability. Although the contract is firm fixed-price, which shifts cost overrun risk to the contractor, performance failures could still impact military readiness. The long duration and the reliance on delivery orders mean that effective program management and oversight are critical to mitigate risks. Ensuring the contractor maintains adequate production capacity and adheres to stringent quality standards throughout the contract period is paramount to avoid disruptions in the supply chain for essential military vehicles.

How effective is the firm fixed-price contract type in managing costs for this specific procurement?

The firm fixed-price (FFP) contract type is generally considered effective in managing costs for procurements where the scope of work is well-defined and risks can be reasonably estimated. For this contract, FFP places the burden of cost overruns on the contractor, ND Defense LLC, incentivizing them to control expenses and improve efficiency. This benefits the DoD by providing cost certainty, assuming the initial price negotiated was fair and reasonable. However, if the contractor underestimated costs or faces unforeseen production challenges, they may seek to reduce quality or performance to maintain profitability, necessitating robust government oversight to ensure contract terms are met.

What is the historical spending pattern for long wheel base rolling chassis by the Department of Defense?

Historical spending patterns for long wheel base rolling chassis by the Department of Defense are not detailed in the provided data. This specific award of $702.9 million represents a significant investment. To understand historical patterns, one would need to analyze past contracts for similar chassis, noting the total amounts awarded, the number of contracts, the duration of these contracts, and the primary contractors involved over several fiscal years. This would help identify trends in procurement volume, average contract values, and shifts in sourcing strategies within the DoD's vehicle manufacturing programs.

What are the implications of the 'delivery order' (aw) contract type on budget predictability?

The 'delivery order' (aw) aspect of this contract, issued against a basic ordering agreement or indefinite-delivery/indefinite-quantity (IDIQ) contract, implies that the total value ($702.9M) represents the maximum potential commitment, not necessarily the guaranteed spending. Budget predictability can be somewhat reduced as actual spending occurs incrementally with each delivery order. While the contract has a defined period of performance (1447 days), the timing and value of individual orders are subject to the DoD's needs and funding availability. This structure allows for flexibility but requires ongoing monitoring of expenditure against the ceiling to manage budgets effectively.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navistar International Corporation

Address: 4201 WINFIELD RD, WARRENVILLE, IL, 60555

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $702,861,066

Exercised Options: $702,861,066

Current Obligation: $702,861,066

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5032

IDV Type: IDC

Timeline