DoD's $57M sole-source contract for mobile strike vehicles awarded to Textron Systems Corp

Contract Overview

Contract Amount: $56,939,234 ($56.9M)

Contractor: Textron Systems Corp

Awarding Agency: Department of Defense

Start Date: 2015-09-25

End Date: 2017-03-13

Contract Duration: 535 days

Daily Burn Rate: $106.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF 55 MOBILE STRIKE FORCE VEHICLES WITH RELATED FIELDING HARDWARE AND FIELD SERVICE REPRESENTATIVE (FSR) SERVICES FOR SYSTEM DEPROCESSING.

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70129

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $56.9 million to TEXTRON SYSTEMS CORP for work described as: PROCUREMENT OF 55 MOBILE STRIKE FORCE VEHICLES WITH RELATED FIELDING HARDWARE AND FIELD SERVICE REPRESENTATIVE (FSR) SERVICES FOR SYSTEM DEPROCESSING. Key points: 1. The contract awarded to Textron Systems Corp. represents a significant investment in specialized military equipment. 2. The firm-fixed-price structure aims to control costs, but the lack of competition raises concerns about optimal pricing. 3. The duration of the contract (535 days) suggests a focused, short-term need for these specific vehicles. 4. The procurement is categorized under Military Armored Vehicle manufacturing, indicating a specialized defense sector focus. 5. The absence of small business involvement suggests this contract is not designed to foster small business growth. 6. The contract's value is substantial, requiring careful oversight to ensure effective use of taxpayer funds.

Value Assessment

Rating: fair

The contract value of approximately $57 million for 55 mobile strike vehicles and associated services is substantial. Without competitive bidding, it is difficult to benchmark the value for money effectively. However, the firm-fixed-price (FFP) contract type suggests an attempt to cap costs. The per-unit cost, when calculated, would need to be compared against similar specialized vehicle procurements, which are often high-cost due to unique specifications and limited production runs. The inclusion of field service representative (FSR) services also adds to the overall cost, and the necessity and cost-effectiveness of these services should be scrutinized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Textron Systems Corp., was solicited. This approach is typically used when there is a unique capability or requirement that only one source can fulfill, or in cases of urgent need where competition is not feasible. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from multiple bidders vying for a contract. This can potentially lead to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price for these specialized vehicles, as the government did not leverage competition to drive down costs.

Public Impact

The primary beneficiaries are the U.S. Army units that will receive the 55 mobile strike force vehicles, enhancing their operational capabilities. The services delivered include the provision of specialized armored vehicles and essential field support for their deployment and operation. The geographic impact is likely focused on military installations and operational theaters where these vehicles will be deployed. Workforce implications may include specialized technical roles for field service representatives and training for vehicle operators and maintainers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits opportunities for other manufacturers to compete and potentially offer better value.
Dependence on a single contractor for specialized vehicles could pose supply chain risks.
The specific capabilities of these 'mobile strike force vehicles' are not detailed, making it hard to assess their necessity and effectiveness.
The inclusion of Field Service Representative (FSR) services warrants scrutiny to ensure cost-effectiveness and necessity.

Positive Signals

Firm-fixed-price contract type helps to establish a ceiling on costs.
Textron Systems Corp. is a known entity in defense manufacturing, suggesting a degree of reliability.
The procurement addresses a specific military need for enhanced mobility and strike capability.
The contract includes essential field service support, which is crucial for the operational readiness of complex equipment.

Sector Analysis

The procurement falls within the defense industrial base, specifically the manufacturing of military armored vehicles. This sector is characterized by high technological barriers to entry, significant R&D investment, and long product development cycles. The market is dominated by a few large prime contractors, with specialized components often sourced from a tier of smaller, expert suppliers. Spending in this area is driven by evolving military requirements, geopolitical factors, and the need for technological superiority. Comparable spending benchmarks would involve analyzing other procurements of similar armored platforms, which can range from tens to hundreds of millions of dollars depending on complexity and quantity.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there an indication of significant subcontracting opportunities for small businesses based on the provided data. The award to a large, established defense contractor like Textron Systems Corp. suggests that the primary focus was on acquiring specialized capabilities rather than promoting small business participation. This contract is unlikely to have a direct positive impact on the small business ecosystem within the defense manufacturing sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which places the cost risk on the contractor. Transparency is limited due to the sole-source nature of the award. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected or alleged during the contract's performance or execution.

Related Government Programs

Armored Vehicle Procurement
Military Logistics and Support
Defense Systems Manufacturing
Tactical Vehicle Programs

Risk Flags

Sole-source award
Lack of competition
High per-unit cost potential
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.9 million to TEXTRON SYSTEMS CORP. PROCUREMENT OF 55 MOBILE STRIKE FORCE VEHICLES WITH RELATED FIELDING HARDWARE AND FIELD SERVICE REPRESENTATIVE (FSR) SERVICES FOR SYSTEM DEPROCESSING.

Who is the contractor on this award?

The obligated recipient is TEXTRON SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $56.9 million.

What is the period of performance?

Start: 2015-09-25. End: 2017-03-13.

What is Textron Systems Corp.'s track record with similar military vehicle procurements?

Textron Systems Corporation has a significant history of producing armored vehicles and defense systems for the U.S. military and international customers. They are known for platforms such as the M1117 Armored Security Vehicle and various unmanned systems. Their experience includes delivering complex, integrated systems that often involve substantial field support. While specific details on past performance for 'mobile strike force vehicles' are not provided here, their general portfolio indicates a capability to meet demanding military specifications. Past performance reviews and contract histories would be crucial for a comprehensive assessment of their reliability and quality in fulfilling this specific contract.

How does the per-unit cost of these vehicles compare to market rates or similar government contracts?

Calculating the precise per-unit cost requires dividing the total contract value ($56,939,234.33) by the number of vehicles (55), which yields approximately $1,035,258.80 per vehicle. This figure includes the cost of fielding hardware and Field Service Representative (FSR) services. Benchmarking this against similar government contracts is challenging without more specific details on the vehicle's capabilities, armor, armament, and technology. However, specialized armored vehicles, especially those designed for strike force roles, are inherently expensive due to advanced engineering, materials, and limited production runs. Without competitive bids, it's difficult to ascertain if this price represents optimal value compared to what might have been achieved through competition.

What are the primary risks associated with a sole-source award for specialized military hardware?

The primary risks associated with a sole-source award for specialized military hardware include potential overpricing due to the absence of competitive pressure, reduced innovation from the lack of market alternatives, and a higher risk of contractor lock-in. Taxpayers may bear a higher cost than necessary. Furthermore, if the sole-source contractor experiences production issues, supply chain disruptions, or financial instability, the program's timeline and operational readiness could be severely impacted, with limited alternative options available to the government. The government also loses the opportunity to explore potentially more cost-effective or technologically superior solutions that other vendors might offer.

How effective are firm-fixed-price contracts in managing costs for complex defense procurements like this?

Firm-fixed-price (FFP) contracts are generally considered effective for managing costs in complex defense procurements when the scope of work is well-defined and the risks are understood. Under an FFP contract, the contractor assumes most of the cost risk, agreeing to a set price regardless of their actual costs. This incentivizes the contractor to control expenses and manage the project efficiently. For procurements like this, where the deliverable (55 vehicles with hardware and services) is specified, an FFP contract provides cost certainty for the government. However, the initial price negotiation is critical, and the absence of competition in a sole-source scenario can weaken the government's leverage in setting a fair and reasonable price.

What is the historical spending pattern for mobile strike force vehicles within the Department of Defense?

Historical spending patterns for 'mobile strike force vehicles' within the Department of Defense are not readily available as a distinct, aggregated category in public databases. Procurements of such specialized vehicles are often project-specific and may fall under broader categories like 'Armored Combat Vehicles,' 'Tactical Wheeled Vehicles,' or specific program names. Spending can fluctuate significantly based on evolving military doctrine, threat assessments, and modernization priorities. The $57 million awarded here represents a specific investment for a particular capability enhancement, and without more context on the vehicle's role and quantity, it's hard to place within a broader historical spending trend. Analyzing past procurements of similar platforms would be necessary for a more informed historical perspective.

What are the implications of the contract duration (535 days) on program execution and cost?

A contract duration of 535 days (approximately 17-18 months) for the procurement of 55 mobile strike force vehicles, including fielding hardware and services, suggests a focused and relatively short-term production and delivery schedule. This duration implies that the vehicles are likely either already in production, have a well-established design, or the contractor has the capacity to ramp up production efficiently. A shorter duration can sometimes reduce overhead costs and accelerate the fielding of critical capabilities. However, it also means less time for potential design adjustments or addressing unforeseen production challenges. For the government, it provides a clearer timeline for when the assets will be delivered, aiding in operational planning.

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: W56HZV15R0160

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 19401 CHEF MENTEUR HWY, NEW ORLEANS, LA, 70129

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $56,939,234

Exercised Options: $56,939,234

Current Obligation: $56,939,234

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $5,822,731

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline