DoD awards $11.9M for 4 prototype electric vehicles, with delivery through August 2027

Contract Overview

Contract Amount: $11,937,399 ($11.9M)

Contractor: GM Defense LLC

Awarding Agency: Department of Defense

Start Date: 2024-01-26

End Date: 2027-08-03

Contract Duration: 1,285 days

Daily Burn Rate: $9.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER W56HZV-24-F-0108 TO CONTRACT W56HZV-20-D-0066 IS ISSUED PURSUANT TO CLAUSE 252.216-7006 (ORDERING)AND PARAGRAPH H.2.1 OF THE BASIC CONTRACT, FOR PROCURING A QUANTITY OF FOUR PROTOTYPE EISV VEHICLES UNDER WORK DIRECTIVE 0066-024.

Place of Performance

Location: DETROIT, WAYNE County, MICHIGAN, 48234

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to GM DEFENSE LLC for work described as: DELIVERY ORDER W56HZV-24-F-0108 TO CONTRACT W56HZV-20-D-0066 IS ISSUED PURSUANT TO CLAUSE 252.216-7006 (ORDERING)AND PARAGRAPH H.2.1 OF THE BASIC CONTRACT, FOR PROCURING A QUANTITY OF FOUR PROTOTYPE EISV VEHICLES UNDER WORK DIRECTIVE 0066-024. Key points: 1. The contract focuses on procuring prototype vehicles, indicating an early-stage development or testing phase. 2. The firm-fixed-price structure shifts cost risk to the contractor, GM Defense LLC. 3. The contract's duration of 1285 days suggests a complex development or testing process. 4. The procurement is for a small quantity (4 vehicles), typical for prototyping and evaluation. 5. The contract falls under Light Truck and Utility Vehicle Manufacturing, a niche within the broader automotive sector.

Value Assessment

Rating: fair

Benchmarking the value of prototype vehicles is challenging due to unique specifications and development costs. The price of approximately $3 million per prototype vehicle is high, but potentially justifiable for advanced military prototypes requiring significant R&D. Further analysis would require understanding the specific technological advancements and performance requirements of these EISV vehicles compared to commercial equivalents or other military prototypes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while an initial broad competition may have occurred, the final award was made to a specific source, possibly due to unique capabilities or prior development. The limited nature of this competition, especially for a prototype, might restrict the range of innovative solutions and potentially lead to less competitive pricing.

Taxpayer Impact: The limited competition means taxpayers may not have benefited from the lowest possible price that a broader, more open competition could have yielded.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Army, who will receive advanced prototype vehicles for evaluation. The services delivered include the design, development, and production of four prototype Electric Infantry Squad Vehicles (EISV). The geographic impact is concentrated in Michigan, where GM Defense LLC is located, potentially supporting local jobs and the defense industrial base in that region. Workforce implications include specialized engineering, manufacturing, and testing roles within GM Defense LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could result in higher costs for taxpayers.
The 'exclusion of sources' clause warrants scrutiny to ensure fair opportunity was considered.
The long delivery period could introduce risks related to technological obsolescence or cost overruns if not managed tightly.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to GM Defense LLC leverages established automotive and defense manufacturing capabilities.
Focus on electric vehicles aligns with modernization efforts and potential long-term operational cost savings.

Sector Analysis

The defense sector's vehicle manufacturing segment is characterized by high R&D investment, stringent performance requirements, and long product development cycles. This contract for prototype EISV vehicles fits within the broader trend of military modernization, particularly the integration of electric and advanced technologies into ground combat and support platforms. Comparable spending benchmarks are difficult to establish for unique prototypes, but significant government investment in next-generation military vehicles is common across various branches.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit subcontracting requirements mentioned in the provided data. The award to a large prime contractor like GM Defense LLC suggests that small businesses are unlikely to be direct awardees. However, they may participate indirectly through subcontracts if GM Defense LLC opts to engage them for specific components or services.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price structure, requiring GM Defense LLC to deliver the prototypes within the agreed cost. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract actions are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Ground Vehicle Programs
Military Prototype Development
Electric Vehicle Procurement
Light Tactical Vehicles
Defense Manufacturing Contracts

Risk Flags

Limited Competition
Prototype Development Risk
Long Delivery Schedule

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to GM DEFENSE LLC. DELIVERY ORDER W56HZV-24-F-0108 TO CONTRACT W56HZV-20-D-0066 IS ISSUED PURSUANT TO CLAUSE 252.216-7006 (ORDERING)AND PARAGRAPH H.2.1 OF THE BASIC CONTRACT, FOR PROCURING A QUANTITY OF FOUR PROTOTYPE EISV VEHICLES UNDER WORK DIRECTIVE 0066-024.

Who is the contractor on this award?

The obligated recipient is GM 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 $11.9 million.

What is the period of performance?

Start: 2024-01-26. End: 2027-08-03.

What is the track record of GM Defense LLC in delivering complex military vehicle prototypes on time and within budget?

GM Defense LLC, as a division of General Motors, leverages extensive automotive engineering and manufacturing experience. While specific public data on their track record for delivering complex military prototypes under firm-fixed-price contracts is limited, their parent company's history in large-scale production and advanced technology development provides a foundation. For this specific contract (W56HZV-20-D-0066, Delivery Order W56HZV-24-F-0108), the performance history is still unfolding as it is an early-stage prototype award. The government's contracting officers would have assessed GM Defense's capabilities and past performance, potentially including other defense contracts or relevant commercial projects, prior to issuing the basic contract and this delivery order. Future performance will be monitored against the established milestones and specifications.

How does the per-unit cost of these prototype EISV vehicles compare to similar military vehicle development programs?

The approximate cost of $3 million per prototype EISV vehicle is substantial. Direct comparisons are difficult as prototype costs are highly variable, depending on technological complexity, R&D investment, and quantity. However, this figure is significantly higher than the cost of mass-produced military vehicles. For context, the M1 Abrams tank costs roughly $6-7 million per unit, but that is a fully fielded, combat-ready platform. Advanced research and development programs, especially those involving novel powertrains like electric systems for military applications, often incur high per-unit costs during the prototype phase due to specialized engineering, testing, and low-volume production. The value proposition here lies in the potential for future cost savings and performance gains from the electric platform, rather than immediate cost-competitiveness with existing, mature platforms.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include technological immaturity of electric propulsion for heavy-duty military applications, potential for schedule delays in complex development, and cost overruns if R&D proves more challenging than anticipated. Mitigation strategies include the firm-fixed-price contract structure, which places cost risk on the contractor, GM Defense LLC. The phased delivery order approach allows for monitoring progress. Furthermore, the government's contracting officers will likely conduct regular reviews and milestone assessments. The long delivery period (through August 2027) also presents a risk of technological obsolescence; however, this is inherent in developing cutting-edge prototypes. The Army's program managers will be responsible for overseeing the technical execution and managing these risks throughout the contract lifecycle.

What is the expected effectiveness of these prototype EISV vehicles in meeting the Army's future operational requirements?

The Electric Infantry Squad Vehicle (EISV) program aims to provide a quieter, more fuel-efficient, and potentially more sustainable platform for infantry units, offering advantages in reduced logistical burden (fuel) and lower thermal/acoustic signatures. These prototypes are intended to validate the feasibility and performance of electric drivetrains in a military context, assessing their suitability for various operational roles, including troop transport, reconnaissance, and potentially as a mobile weapons platform. Their effectiveness will be measured against specific performance metrics defined in the contract, such as range, off-road capability, payload capacity, and system reliability under demanding conditions. The success of these prototypes will inform decisions regarding full-scale production and fielding.

How does this contract fit into the broader historical spending patterns for Army vehicle procurement?

This contract represents a relatively small portion of the Army's overall vehicle procurement budget, which historically includes billions spent annually on a wide range of platforms from light tactical vehicles to heavy armored fighting vehicles. The $11.9 million for four prototypes is characteristic of R&D and early-stage acquisition efforts focused on exploring new technologies. It contrasts with the much larger sums allocated for procuring thousands of fielded vehicles like the JLTV (Joint Light Tactical Vehicle) or Abrams tanks. This investment signifies a strategic shift towards evaluating and integrating advanced, potentially disruptive technologies like electrification into the future ground fleet, rather than simply replacing existing platforms with incremental upgrades.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Manufacturing › Light Truck and Utility Vehicle Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ALTERNATIVE SOURCES

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 RENAISSANCE CTR FL 24, DETROIT, MI, 48243

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: $11,937,399

Exercised Options: $11,937,399

Current Obligation: $11,937,399

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV20D0066

IDV Type: IDC

Timeline