Department of Defense awarded $299M+ for combat vehicles, primarily to General Dynamics Land Systems

Contract Overview

Contract Amount: $299,435,663 ($299.4M)

Contractor: General Dynamics Land Systems - Force Protection Inc.

Awarding Agency: Department of Defense

Start Date: 2006-08-10

End Date: 2012-01-20

Contract Duration: 1,989 days

Daily Burn Rate: $150.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMBAT VEHICLES

Place of Performance

Location: LADSON, CHARLESTON County, SOUTH CAROLINA, 29456

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $299.4 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC. for work described as: COMBAT VEHICLES Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. Significant contract value suggests a substantial need for combat vehicles within the DoD. 3. Long contract duration (1989 days) indicates a sustained requirement and potential for cost overruns. 4. The contract type (Firm Fixed Price) aims to control costs, but flexibility may be limited. 5. Focus on armored vehicle manufacturing highlights a key area of defense industrial base. 6. Geographic concentration in South Carolina for manufacturing may have local economic impacts.

Value Assessment

Rating: fair

The total award of over $299 million for combat vehicles is substantial. Without specific benchmarks for similar armored vehicle contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the sole-source nature of the award suggests limited opportunity for competitive pricing, potentially leading to higher costs than if multiple vendors had bid. The firm fixed-price contract type offers some cost certainty, but the overall value is difficult to ascertain without comparative data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Land Systems, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. The lack of competition means taxpayers did not benefit from potential cost savings that could arise from multiple companies vying for the contract.

Taxpayer Impact: Sole-source awards limit price discovery and can result in higher costs for taxpayers compared to competitively bid contracts. This means taxpayer funds may not be utilized as efficiently as possible.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical combat vehicles for its operations. The contract supports the production and delivery of military armored vehicles and their components. Manufacturing activities are concentrated in South Carolina, potentially impacting the local workforce and economy. This contract directly supports the defense industrial base, ensuring the availability of specialized manufacturing capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
Long contract duration increases exposure to potential cost escalations or scope creep.
Lack of transparency in the sole-source justification could obscure potential inefficiencies.
Dependence on a single contractor for critical defense assets poses supply chain risks.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to an established contractor with experience in combat vehicle manufacturing.
Contract supports a critical national defense capability.

Sector Analysis

This contract falls within the broader defense manufacturing sector, specifically focusing on armored vehicle production. The market for such specialized military hardware is dominated by a few large defense contractors. Spending in this area is driven by geopolitical needs and military modernization programs. Comparable spending benchmarks would typically involve other large-scale vehicle procurement contracts within the Department of Defense or allied nations.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, as indicated by 'sb': false. The award to a large prime contractor like General Dynamics Land Systems suggests that subcontracting opportunities for small businesses may exist, but these are not explicitly mandated or detailed in the provided data. The impact on the small business ecosystem would depend on the extent to which the prime contractor engages with and utilizes small business suppliers.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Specific accountability measures would be defined within the contract's terms and conditions, including performance metrics and delivery schedules. Transparency is limited due to the sole-source nature of the award; however, contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Military Armored Vehicle Manufacturing
Tank and Tank Component Manufacturing
Defense Procurement
Combat Systems Acquisition

Risk Flags

Sole-source award
Potential for cost overruns due to long duration
Lack of competitive benchmarking
Dependency on a single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $299.4 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC.. COMBAT VEHICLES

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $299.4 million.

What is the period of performance?

Start: 2006-08-10. End: 2012-01-20.

What is the historical spending trend for combat vehicles by the Department of Defense?

Historical spending on combat vehicles by the Department of Defense has fluctuated based on global security environments, military modernization efforts, and specific operational needs. While this specific contract represents a significant single award of over $299 million, broader trends show substantial, multi-year investments in armored platforms. For instance, during periods of active conflict or heightened geopolitical tension, spending often increases to replenish stocks or field new technologies. Conversely, during periods of drawdown or shifting strategic priorities, spending may decrease. Analyzing annual defense budgets and specific procurement line items for armored vehicles would reveal these trends. Without access to a comprehensive historical database for this specific contract or category, it's difficult to provide precise figures, but it's understood that such procurements are often in the hundreds of millions to billions of dollars over several years.

How does the price per unit for these combat vehicles compare to similar systems procured by other agencies or allied nations?

A precise per-unit cost comparison is not possible with the provided data, as the total award amount and the number of units are given, but not the specific model or configuration of the combat vehicles. However, the nature of defense procurement, especially for specialized armored vehicles, often involves high unit costs due to advanced technology, armor, and survivability features. Comparing this contract's implied unit cost (if calculable) to similar systems procured by other nations or even other branches of the U.S. military would require detailed specifications and market intelligence. Generally, sole-source contracts, like this one, tend to have less favorable unit pricing than competitively bid contracts due to the absence of market pressure. Benchmarking would ideally involve looking at contracts for vehicles with comparable capabilities, such as main battle tanks, infantry fighting vehicles, or armored personnel carriers.

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

Key performance indicators for a contract of this nature typically revolve around delivery schedules, quality standards, and adherence to technical specifications. For combat vehicles, critical KPIs would include meeting stringent survivability and protection requirements, ensuring operational readiness upon delivery, and achieving specified mobility and firepower capabilities. The contractor's ability to meet the firm fixed-price terms without significant change orders or cost overruns would also be a key indicator of success. Furthermore, post-delivery performance, such as reliability and maintainability in operational environments, would be monitored. The Department of the Navy, as the procuring agency, would have established metrics within the contract to track these aspects, likely involving regular technical reviews and acceptance testing.

What is the track record of General Dynamics Land Systems in delivering similar combat vehicles on time and within budget?

General Dynamics Land Systems (GDLS) has a long and established track record in the design, manufacturing, and delivery of combat vehicles for the U.S. military and international customers. They are a primary producer of the Abrams main battle tank and have been involved in numerous upgrades and variants, as well as other armored platforms. Historically, GDLS has generally met its delivery obligations, though like many large defense contractors involved in complex, multi-year programs, they have occasionally faced challenges related to production timelines, cost adjustments, and technical integration issues. The firm fixed-price nature of this specific contract suggests a strong emphasis on budget adherence. GDLS's extensive experience provides a degree of confidence in their ability to execute this contract, but ongoing monitoring of performance against schedule and budget remains crucial.

What are the potential risks associated with relying on a sole-source provider for critical combat vehicle components?

Relying on a sole-source provider like General Dynamics Land Systems for critical combat vehicles presents several potential risks. Firstly, there is a lack of competitive pressure, which can lead to higher prices and potentially less incentive for the contractor to innovate or improve efficiency. Secondly, it creates a dependency; if the sole-source contractor experiences production issues, financial instability, or faces geopolitical sanctions, the supply chain for these vital defense assets could be severely disrupted. This dependency also limits the government's flexibility to switch providers or leverage alternative technologies. Furthermore, without competitive benchmarking, it can be more challenging to ensure the government is receiving the best possible value for its investment. This situation necessitates robust government oversight and strong contract management to mitigate these inherent risks.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MAINT/REPAIR SHOP EQPT

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: General Dynamics Corp (UEI: 001381284)

Address: 9801 HWY 78 STE 3, LADSON, SC, 29456

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $306,819,137

Exercised Options: $306,819,137

Current Obligation: $299,435,663

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline