More Michelin: $852M for US Military Tire Production & Supply Chain Management
Michelin North America in Greenville, SC received a minimum $852 million fixed-price with economic price adjustment contract for supply, storage, and distribution for all tires on behalf of the US Army, Navy, Air Force, and Marine Corps. Work will be performed in Akron, Columbus, and North Canton, OH; Fairfield, NJ; Des Moines, IA; Indiana, PA; New Haven, CT, and Toronto, Canada. There were 23 proposals solicited and 3 responded; this is a base year only contract via the Defense Supply Center Columbus (DSCC) in Columbus, OH (SPM7L10-07-D-7002). The date of performance completion is January 24, 2012, and the 5-year contract also has a 5-year option period worth over $850 million, which would bring the total contract value to $1.7 billion.
A Defense Logistics Agency (DLA) release reveals that contract, as well as the Michelin’s $368.4 million contract with the USAF and Navy, are the result of the Base Realignment and Closure (BRAC) Act 2005 that mandated commodity management privatization of tires. Michelin is cooperating with Lockheed on the supply chain dimension, and with SAIC as well. The US DLA estimates that having tires purchased under the CMP mandate and managed by DLA will deliver an estimated net savings of $172.8 million.
Matt Geary, the project manager for DSCC’s CMP contracting efforts, says that:
“Michelin will now be accomplishing all the tasks related to supply, storage and distribution of tires… DSCC will have oversight of the contracts, but Michelin will be doing everything else.”
See also US Defense Logistics Agency release: “Michelin wins military ground vehicle tire contract worth $1.7 billion“