DoD's $509.7M Buffalo MPCV contract awarded to General Dynamics, a sole-source procurement

Contract Overview

Contract Amount: $509,664,990 ($509.7M)

Contractor: General Dynamics Land Systems - Force Protection Inc.

Awarding Agency: Department of Defense

Start Date: 2007-11-02

End Date: 2015-04-30

Contract Duration: 2,736 days

Daily Burn Rate: $186.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BUFFALO MPCV

Place of Performance

Location: LADSON, CHARLESTON County, SOUTH CAROLINA, 29456

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $509.7 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC. for work described as: BUFFALO MPCV Key points: 1. The contract's value of $509.7 million represents a significant investment in armored vehicle technology. 2. Sole-source procurement raises questions about potential price inflation and lack of competitive pressure. 3. The contract duration of 2736 days (over 7 years) indicates a long-term commitment to this platform. 4. The firm-fixed-price structure aims to transfer cost risk to the contractor. 5. Awarded by the Department of the Army, this contract supports ground vehicle modernization efforts. 6. The absence of small business set-asides suggests the prime contractor is a large entity.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source procurements for similar specialized vehicles. The firm-fixed-price contract type suggests an attempt to control costs, but the lack of competition means there's no direct market comparison to assess pricing efficiency. The total award amount of $509.7 million over its lifespan needs to be evaluated against the specific capabilities and quantities delivered to determine true value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor was solicited. This approach is typically used when a unique capability is required, or when only one source is capable of meeting the requirement. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple vendors.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it's difficult to ascertain if the price reflects the best possible value.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will operate and rely on the Buffalo MPCV for protected mobility. The contract delivers specialized armored vehicles designed for mine and explosive ordnance disposal. The geographic impact is primarily within the operational theaters where the Army deploys these vehicles. Workforce implications include employment at General Dynamics Land Systems and its subcontractors involved in manufacturing and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Long contract duration could expose the government to risks if technology or requirements change.
Lack of transparency in the sole-source justification process can obscure potential inefficiencies.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Award to an established defense contractor like General Dynamics suggests a focus on proven capabilities.
The specific nature of the Buffalo MPCV implies a critical, specialized need being met.

Sector Analysis

The armored vehicle manufacturing sector is a critical component of the defense industrial base. This contract falls within the broader category of military vehicle production, which includes a range of armored personnel carriers, mine-resistant ambush-protected (MRAP) vehicles, and specialized support platforms. Spending in this sector is heavily influenced by geopolitical events and modernization priorities. Comparable spending benchmarks would involve other large-scale armored vehicle procurements by the Department of Defense.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as it was not competed and there is no indication of a small business set-aside. This suggests that the prime contractor, General Dynamics Land Systems, is a large business. Subcontracting opportunities for small businesses may exist within the supply chain, but these are not explicitly detailed in the provided data. The overall impact on the small business ecosystem for this specific contract is likely indirect.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract, which holds the contractor responsible for delivering the specified goods within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight if issues arise.

Related Government Programs

MRAP Vehicles
Mine Clearing Vehicles
Explosive Ordnance Disposal Equipment
Tactical Wheeled Vehicles
Ground Combat Systems

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $509.7 million to GENERAL DYNAMICS LAND SYSTEMS - FORCE PROTECTION INC.. BUFFALO MPCV

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 Army).

What is the total obligated amount?

The obligated amount is $509.7 million.

What is the period of performance?

Start: 2007-11-02. End: 2015-04-30.

What is the specific capability and intended use of the Buffalo MPCV?

The Buffalo MPCV (Mine Protected Combat Vehicle) is a heavily armored vehicle designed primarily for route clearance, explosive ordnance disposal (EOD), and counter-IED (Improvised Explosive Device) missions. It features a V-shaped hull to deflect blasts, advanced sensor suites for detecting threats, and a robotic arm for manipulating explosive devices from a safe distance. Its robust protection and specialized equipment make it crucial for protecting personnel in high-threat environments during convoy operations or specialized missions.

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For specialized platforms like the Buffalo MPCV, this could be due to unique design rights, proprietary technology, or a highly specific manufacturing capability that only one contractor possesses. The Department of Defense would have had to provide a justification and approval document (J&A) outlining the specific reasons why full and open competition was not feasible or not in the government's best interest for this procurement.

How does the firm-fixed-price contract type impact cost control for this sole-source award?

A firm-fixed-price (FFP) contract establishes a ceiling price that the contractor must not exceed, regardless of their actual costs. This contract type is generally preferred by the government as it transfers most of the cost risk to the contractor. For this sole-source award, the FFP structure aims to provide cost certainty to the government. However, without competitive benchmarking, it's challenging to definitively state if the fixed price itself represents optimal value, even though the contractor bears the risk of cost overruns.

What is the historical spending trend for similar armored vehicle procurements by the Department of the Army?

Historical spending on armored vehicles by the Department of the Army has fluctuated significantly, often driven by wartime needs and modernization programs. During the height of conflicts in Iraq and Afghanistan, spending on Mine-Resistant Ambush Protected (MRAP) vehicles surged dramatically. Post-conflict, spending often shifts towards upgrading existing fleets or developing next-generation platforms. The Buffalo MPCV falls into a specialized category, and its procurement volume and cost would be compared against other specialized vehicle programs rather than mass-produced platforms.

What are the potential risks associated with a long-duration, sole-source contract for military hardware?

Long-duration, sole-source contracts for military hardware carry several risks. Firstly, the lack of competition can lead to inflated prices over time, as the contractor faces no market pressure to reduce costs. Secondly, technology can rapidly evolve, potentially rendering the contracted hardware obsolete before the contract ends, leading to sunk costs. Thirdly, contractor performance issues or financial instability can have a prolonged impact due to the lack of alternative sources. Finally, the government's leverage diminishes over the contract's life, making it harder to negotiate favorable terms for modifications or future procurements.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV07R0343

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, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $510,122,312

Exercised Options: $509,664,990

Current Obligation: $509,664,990

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline