DoD Awards $46M UCA to ND Defense for MRAP Vehicle Upgrades, Potentially Reaching $440M

Contract Overview

Contract Amount: $374,635,550 ($374.6M)

Contractor: ND Defense LLC

Awarding Agency: Department of Defense

Start Date: 2017-02-28

End Date: 2019-07-31

Contract Duration: 883 days

Daily Burn Rate: $424.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CREATING BASE PREDOMINATE CAR. THIS ACTION IS AN UNDEFINITIZED CONTRACTUAL ACTION (UCA) AWARD, IN THE AMOUNT OF $46M WITH A NOT TO EXCEED CEILING AMOUNT OF $440M. THIS EFFORT IS FOR THE RESET AND UPGRADE OF 1,085 MRAP LONG WHEEL BASE VEHICLES FOR THE FMS CUSTOMER UNITED ARAB EMIRATES. ALL DELIVERIES SHALL BE COMPLETED TO COUNTRY BY 31 MAR 2019.

Place of Performance

Location: LISLE, DUPAGE County, ILLINOIS, 60532

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $374.6 million to ND DEFENSE LLC for work described as: CREATING BASE PREDOMINATE CAR. THIS ACTION IS AN UNDEFINITIZED CONTRACTUAL ACTION (UCA) AWARD, IN THE AMOUNT OF $46M WITH A NOT TO EXCEED CEILING AMOUNT OF $440M. THIS EFFORT IS FOR THE RESET AND UPGRADE OF 1,085 MRAP LONG WHEEL BASE VEHICLES FOR THE FMS CUSTOMER UNITED ARAB EMI… Key points: 1. The contract is an Undefinitized Contractual Action (UCA), indicating initial work before full terms are settled. 2. The total ceiling of $440M represents a significant potential expenditure for vehicle upgrades. 3. This contract is for Foreign Military Sales (FMS) to the United Arab Emirates. 4. The sector is dominated by large defense contractors, with limited visibility into small business participation.

Value Assessment

Rating: questionable

The initial award of $46M is a small portion of the $440M ceiling, suggesting significant future funding. Pricing for UCAs can be less transparent initially, making a direct comparison difficult without knowing the final negotiated price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'NOT AVAILABLE FOR COMPETITION', indicating a limited competition approach. This lack of full and open competition may impact price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The potential for a $440M expenditure raises concerns about taxpayer value, especially given the limited competition and UCA nature of the award.

Public Impact

Taxpayers may fund significant upgrades to military vehicles for a foreign ally. The use of a UCA suggests potential urgency or evolving requirements, which can impact cost control. Lack of competition raises questions about whether the best possible price was secured. The long duration and high ceiling warrant close monitoring of expenditures.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

UCA award
Limited competition
High contract ceiling
Foreign Military Sales

Positive Signals

Addresses critical vehicle reset and upgrade needs
Supports allied military capabilities

Sector Analysis

The defense industrial base, particularly military vehicle manufacturing, is characterized by high barriers to entry and significant consolidation. Spending benchmarks for vehicle upgrades vary widely based on complexity, but a $440M ceiling for 1,085 vehicles suggests a substantial per-vehicle investment.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). The prime contractor, ND Defense LLC, is likely a larger entity, and there is no information provided on subcontracting opportunities for small businesses.

Oversight & Accountability

The use of a UCA necessitates robust oversight to ensure the eventual definitization of the contract occurs at a fair and reasonable price. The Department of the Army's oversight will be critical in managing the progression from the initial award to the full contract ceiling.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for cost overruns due to UCA
Lack of full and open competition
High contract ceiling requires significant oversight
Foreign Military Sales funding can be subject to political shifts
Limited transparency on initial pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $374.6 million to ND DEFENSE LLC. CREATING BASE PREDOMINATE CAR. THIS ACTION IS AN UNDEFINITIZED CONTRACTUAL ACTION (UCA) AWARD, IN THE AMOUNT OF $46M WITH A NOT TO EXCEED CEILING AMOUNT OF $440M. THIS EFFORT IS FOR THE RESET AND UPGRADE OF 1,085 MRAP LONG WHEEL BASE VEHICLES FOR THE FMS CUSTOMER UNITED ARAB EMIRATES. ALL DELIVERIES SHALL BE COMPLETED TO COUNTRY BY 31 MAR 2019.

Who is the contractor on this award?

The obligated recipient is ND DEFENSE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $374.6 million.

What is the period of performance?

Start: 2017-02-28. End: 2019-07-31.

What is the justification for limiting competition on this significant vehicle upgrade contract?

The contract states it was 'NOT AVAILABLE FOR COMPETITION'. Without further details, the specific justification remains unclear. Typically, justifications for limited competition might include urgency, unique capabilities of a specific contractor, or follow-on work where only one source can provide the necessary integration or parts. This lack of transparency warrants further investigation.

How will the government ensure cost-effectiveness given the UCA structure and high contract ceiling?

Ensuring cost-effectiveness with a UCA involves rigorous negotiation during the definitization process, where the government must validate all costs and establish a fair and reasonable price. Close monitoring of expenditures against the $440M ceiling and performance metrics is crucial. Independent cost estimates and benchmarking against similar contracts will be vital tools for oversight.

What is the long-term strategic value of upgrading these MRAP vehicles for the United Arab Emirates?

Upgrading MRAP vehicles enhances their survivability and operational effectiveness, crucial for the UAE's security needs in potentially volatile regions. This contributes to regional stability and strengthens the US-UAE defense partnership. The investment supports the modernization of allied military assets, aligning with US foreign policy objectives and interoperability goals.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV16R0101

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navistar International Corporation (UEI: 161984646)

Address: 2701 NAVISTAR WAY, LISLE, IL, 60532

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

Financial Breakdown

Contract Ceiling: $374,635,550

Exercised Options: $374,635,550

Current Obligation: $374,635,550

Subaward Activity

Number of Subawards: 82

Total Subaward Amount: $191,826,502

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline