DoD awards $143.8M for armored vehicle resets and upgrades to ND Defense LLC

Contract Overview

Contract Amount: $143,823,371 ($143.8M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2014-08-27

End Date: 2017-10-15

Contract Duration: 1,145 days

Daily Burn Rate: $125.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: VEHICLE RESET WILL INCLUDE THE REPLACEMENT OF MANDATORY PARTS AND LABOR FOR MAINTENANCE REPAIRS TO BRING THE VEHICLES TO A CONDITION CODE-A STANDARD (LIKE NEW). THE UPGRADES CONSIST OF BRINGING THE VEHICLES TO A COMMON CONFIGURATION OF LOW RATE INITIAL PRODUCTION (LRIP 21) AS OUTLINED AS INCOMING CONFIGURATION OF M1235 MAXXPRO DASH, M1235 A1 MAXXPRO DASH WITH INDEPENDENT SUSPENSION SYSTEM (ISS), M1235 A2 MAXXPRO DASH AMBULANCE WILL BE CONVERTED TO A FINAL CONFIGURATION OF M1235A4 (OGPK) AND INCOMING CONFIGURATION M1266 LONG WHEEL BASE (LWB) WITH ISS AMBULANCE WILL BE CONVERTED TO A FINAL CONFIGURATION OF M1266A1 PLUS ADDITIONAL APPROVED ENGINEERING CHANGE PROPOSALS (ECPS).

Place of Performance

Location: LISLE, DUPAGE County, ILLINOIS, 60532

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $143.8 million to ND DEFENSE LLC for work described as: VEHICLE RESET WILL INCLUDE THE REPLACEMENT OF MANDATORY PARTS AND LABOR FOR MAINTENANCE REPAIRS TO BRING THE VEHICLES TO A CONDITION CODE-A STANDARD (LIKE NEW). THE UPGRADES CONSIST OF BRINGING THE VEHICLES TO A COMMON CONFIGURATION OF LOW RATE INITIAL PRODUCTION (LRIP 21) AS OUT… Key points: 1. Contract focuses on bringing existing armored vehicles to a 'like new' condition (Condition Code-A). 2. Upgrades involve standardizing vehicle configurations to Low Rate Initial Production (LRIP) 21 standards. 3. Specific vehicle models like M1235 MaxxPro Dash and M1266 Long Wheel Base are included in the reset. 4. Engineering Change Proposals (ECPs) are incorporated to enhance vehicle capabilities. 5. The contract type is Cost Plus Fixed Fee, which can carry higher cost risks. 6. This is a definitive contract awarded to a single vendor, ND Defense LLC.

Value Assessment

Rating: fair

The total award of $143.8 million for vehicle reset and upgrades appears substantial. Without specific details on the number of vehicles or the scope of work per vehicle, a direct value-for-money assessment is challenging. However, Cost Plus Fixed Fee contracts can sometimes lead to higher costs compared to fixed-price contracts if not managed tightly. Benchmarking against similar reset programs for armored vehicles would be necessary for a more precise evaluation of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded as a sole-source definitive contract to ND Defense LLC. The lack of competition means that the government did not explore alternative vendors or pricing structures, potentially limiting price discovery and the opportunity for more competitive terms.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the award was made without soliciting bids from multiple sources.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, ensuring the readiness and operational capability of its armored vehicle fleet. Services delivered include mandatory parts replacement, labor for maintenance repairs, and configuration upgrades to specific military standards. The geographic impact is primarily within the operational theaters where these vehicles are deployed, and potentially at maintenance facilities in Illinois. Workforce implications include skilled labor for vehicle maintenance, repair, and upgrade, likely supporting jobs within ND Defense LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not rigorously managed.
Lack of competition may reduce the incentive for the contractor to innovate or offer cost savings.
Scope of 'like new' condition and specific ECPs requires careful monitoring to ensure full delivery.

Positive Signals

Focus on bringing vehicles to a common, standardized configuration (LRIP 21) improves interoperability and logistics.
Upgrades to Condition Code-A standard ensures vehicles are in optimal operational readiness.
Inclusion of specific vehicle models and ECPs indicates a targeted approach to fleet modernization.
Definitive contract provides a clear framework for the duration and scope of the work.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the manufacturing and maintenance of military armored vehicles. The market for such specialized services is often concentrated among a few key contractors with the necessary expertise and security clearances. The total value of $143.8 million is significant for a single contract of this nature, reflecting the complexity and scale of refurbishing and upgrading heavy military equipment.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, ND Defense LLC, would be responsible for managing its own supply chain, which may or may not involve small businesses depending on their capabilities and the specific needs of the contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contract compliance, monitoring performance, and verifying costs. The Cost Plus Fixed Fee nature of the contract necessitates close financial oversight to prevent cost overruns and ensure that the fixed fee is earned appropriately. Transparency would be enhanced through regular reporting requirements and potential audits.

Related Government Programs

Military Vehicle Maintenance and Repair
Armored Vehicle Modernization Programs
Department of Defense Fleet Readiness Initiatives
Cost Plus Fixed Fee Contracts
Defense Contract Management Agency Oversight

Risk Flags

Sole-source award may limit cost savings.
Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Complexity of upgrades and ECP integration requires careful management.
Potential for supply chain disruptions affecting parts availability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $143.8 million to ND DEFENSE LLC. VEHICLE RESET WILL INCLUDE THE REPLACEMENT OF MANDATORY PARTS AND LABOR FOR MAINTENANCE REPAIRS TO BRING THE VEHICLES TO A CONDITION CODE-A STANDARD (LIKE NEW). THE UPGRADES CONSIST OF BRINGING THE VEHICLES TO A COMMON CONFIGURATION OF LOW RATE INITIAL PRODUCTION (LRIP 21) AS OUTLINED AS INCOMING CONFIGURATION OF M1235 MAXXPRO DASH, M1235 A1 MAXXPRO DASH WITH INDEPENDENT SUSPENSION SYSTEM (ISS), M1235 A2 MAXXPRO DASH AMBULANCE WILL BE CONVERTED TO A FINAL CONFIGURATION OF M1235A4 (OGPK) AND INCO

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 $143.8 million.

What is the period of performance?

Start: 2014-08-27. End: 2017-10-15.

What is the specific number of vehicles being reset and upgraded under this contract?

The provided data does not specify the exact number of vehicles included in this contract. The total award amount of $143.8 million is for the 'VEHICLE RESET' which includes the replacement of mandatory parts and labor for maintenance repairs to bring vehicles to a Condition Code-A standard, along with specific configuration upgrades. Without knowing the number of vehicles, it is difficult to ascertain the per-vehicle cost for these extensive upgrades and repairs. Further analysis would require access to the contract's detailed statement of work and line item breakdowns.

How does the Cost Plus Fixed Fee (CPFF) structure impact the potential for cost overruns compared to other contract types?

A Cost Plus Fixed Fee (CPFF) contract is designed to cover the actual allowable costs incurred by the contractor plus a fixed fee, representing profit. While the fixed fee provides some incentive for the contractor to control costs (as it doesn't increase with higher expenses), the government bears the risk of cost overruns. If the actual costs exceed the initial estimates, the government is obligated to pay those costs. This contrasts with fixed-price contracts, where the contractor assumes most of the cost risk. For complex projects like vehicle resets with potential unforeseen issues, CPFF can be appropriate, but it requires robust government oversight to manage costs effectively and prevent scope creep from inflating the final price beyond the intended value.

What is the historical spending pattern for similar vehicle reset and upgrade programs within the Department of Defense?

Historical spending data for similar Department of Defense vehicle reset and upgrade programs is crucial for benchmarking this $143.8 million contract. Without access to specific historical data, it's challenging to determine if this award represents a significant increase or decrease in spending for such services. Factors influencing historical spending include the number of vehicles, the complexity of upgrades (e.g., incorporating new technologies, armor enhancements), the specific vehicle platforms, and the prevailing economic conditions affecting labor and parts costs. A comprehensive review of past solicitations, awards, and program execution reports for comparable vehicle reset initiatives would provide valuable context for assessing the current contract's financial standing.

What specific risks are associated with upgrading vehicles to the LRIP 21 configuration?

Upgrading vehicles to a specific Low Rate Initial Production (LRIP) configuration, such as LRIP 21, can introduce several risks. These include potential compatibility issues with existing systems or fielded equipment, the need for specialized training for maintenance personnel on the new configuration, and the possibility of unforeseen technical challenges during the integration of updated components or software. Furthermore, if LRIP 21 represents a significant technological leap, there might be risks related to the maturity of the technology itself or the availability of spare parts. The incorporation of additional approved Engineering Change Proposals (ECPs) adds another layer of complexity, requiring careful validation and testing to ensure they integrate seamlessly and deliver the intended performance improvements without introducing new vulnerabilities or operational constraints.

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

Assessing the track record of ND Defense LLC is vital for understanding the potential performance and reliability of this $143.8 million contract. Information regarding their past performance on similar large-scale military vehicle refurbishment and upgrade projects, including adherence to schedules, budget management, quality of work, and overall customer satisfaction (particularly from the Department of Defense), would be highly informative. A review of past contract awards, performance evaluations (like Contractor Performance Assessment Reporting System - CPARS), and any history of contract disputes or corrective actions would provide a clearer picture of their capabilities and reliability in executing complex defense contracts of this magnitude.

Industry Classification

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

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navistar International Corporation

Address: 1675 E WHITCOMB AVE, MADISON HEIGHTS, MI, 48071

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $148,738,264

Exercised Options: $143,823,371

Current Obligation: $143,823,371

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,658,559

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline