DoD's $26.9M flare contract awarded to Kilgore Flares Company LLC, a sole-source acquisition

Contract Overview

Contract Amount: $26,954,505 ($27.0M)

Contractor: Kilgore Flares Company LLC

Awarding Agency: Department of Defense

Start Date: 2010-03-12

End Date: 2012-09-30

Contract Duration: 933 days

Daily Burn Rate: $28.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CARTRIDGE,FLARE

Place of Performance

Location: TOONE, HARDEMAN County, TENNESSEE, 38381

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $27.0 million to KILGORE FLARES COMPANY LLC for work described as: CARTRIDGE,FLARE Key points: 1. The contract value of $26.9 million for flares indicates a significant investment in pyrotechnic capabilities. 2. Sole-source award suggests limited market competition or specific technical requirements. 3. The duration of 933 days points to a sustained need for these essential components. 4. Awarded by the Department of the Air Force, highlighting its importance for aviation or tactical operations. 5. The fixed-price contract type aims to control costs for the government. 6. The contract's focus on explosives manufacturing places it within a specialized industrial sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar flare systems. The fixed-price nature provides some cost certainty, but the lack of competition means there's no direct market price comparison to assess optimal value for money. Further analysis would require understanding the specific technical requirements and the availability of alternative suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, Kilgore Flares Company LLC, was deemed capable of fulfilling the requirement. This approach bypasses the standard competitive bidding process, often justified by unique technical specifications, proprietary technology, or urgent needs where only one source can respond in time. The lack of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without multiple offers, the government cannot leverage market forces to secure the best possible price for these essential flares.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, which receives critical pyrotechnic supplies. The services delivered include the manufacturing and provision of flares, essential for signaling, illumination, or countermeasures. The geographic impact is primarily within Tennessee, where Kilgore Flares Company LLC is located, potentially supporting local employment. Workforce implications include supporting skilled labor in the explosives manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Potential for vendor lock-in due to specialized nature of the product.

Positive Signals

Fixed-price contract type helps manage cost certainty.
Award to an established manufacturer suggests reliability in supply.
Sustained contract duration indicates a consistent and important need.

Sector Analysis

The contract falls within the Defense Industrial Base, specifically the explosives manufacturing sector. This sector is characterized by high barriers to entry due to stringent safety regulations, specialized knowledge, and significant capital investment. The market for military pyrotechnics is often consolidated, with a few key players supplying government agencies. Comparable spending benchmarks would typically involve other large-scale procurements of similar ordnance or signaling devices by defense agencies.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award to a specific manufacturer, it does not directly create opportunities for small businesses through competitive bidding. The impact on the small business ecosystem is likely minimal unless Kilgore Flares Company LLC engages small businesses as subcontractors, which is not specified.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified goods. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Ordnance Procurement
Air Force Aviation Support Equipment
Pyrotechnics and Explosives Manufacturing
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits competition
Potential for price escalation without competition
Supply chain risk due to single supplier reliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.0 million to KILGORE FLARES COMPANY LLC. CARTRIDGE,FLARE

Who is the contractor on this award?

The obligated recipient is KILGORE FLARES COMPANY LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2010-03-12. End: 2012-09-30.

What specific types of flares are being procured under this contract, and what are their intended military applications?

The data indicates the procurement is for 'CARTRIDGE,FLARE'. While specific types are not detailed, flares in military contexts serve various purposes including signaling (e.g., for troop or aircraft identification), illumination (e.g., for night operations or target marking), and as countermeasures (e.g., to decoy heat-seeking missiles). The 'Explosives Manufacturing' NAICS code and the supplier 'KILGORE FLARES COMPANY LLC' suggest these are likely tactical or signaling flares critical for operational effectiveness, potentially for aircraft, ground troops, or naval vessels. The exact application would depend on the specific flare's characteristics like spectrum, duration, and payload.

What is the historical spending pattern for flares by the Department of the Air Force, and how does this contract compare?

Historical spending data for flares by the Department of the Air Force is not provided in the given data snippet. However, the contract value of $26.9 million over a period of approximately 2.6 years (933 days) suggests a significant, ongoing requirement. To compare, one would need to analyze past contracts for similar flare types, noting their values, durations, and whether they were competitively or sole-sourced. A higher average annual spend compared to previous periods might indicate increased operational tempo, new program requirements, or simply inflation. Conversely, a lower spend could suggest reduced demand or successful cost-saving measures in prior acquisitions.

What is the justification for awarding this contract on a sole-source basis, and were any alternatives considered?

The provided data indicates the contract was awarded under 'NOT COMPETED', which is synonymous with a sole-source or limited competition award. The specific justification for this sole-source award is not detailed in the snippet. Typically, sole-source justifications are based on factors such as the unique capabilities of a single contractor, the need to maintain compatibility with existing systems, urgent and compelling circumstances that preclude full and open competition, or when only one responsible source is available. Without further documentation (like a Justification and Approval document), it's impossible to know if alternatives were considered or why they were deemed unsuitable. This lack of competition raises concerns about potential overpricing and reduced innovation.

What is the track record of Kilgore Flares Company LLC in fulfilling government contracts, particularly for the Department of Defense?

The provided data shows Kilgore Flares Company LLC as the contractor for this $26.9 million contract with the Department of the Air Force. To assess their track record, one would need to examine their contract history with the DoD and other federal agencies. This would involve looking at past performance evaluations, on-time delivery rates, quality of goods provided, and any history of contract disputes or terminations. A company with a history of successful contract performance is generally considered a lower risk. However, the sole-source nature of this particular award means that past performance might have been a key factor in deeming them the only viable option, or it could be a new relationship where performance is yet to be fully established.

What are the potential risks associated with relying on a single supplier for critical flare components?

Relying on a single supplier, as indicated by this sole-source contract, presents several risks. Firstly, there's a risk of supply chain disruption; if Kilgore Flares Company LLC experiences production issues, natural disasters, or financial instability, the DoD's supply of critical flares could be jeopardized. Secondly, the lack of competition can lead to price escalation over time, as the sole supplier faces no market pressure to offer competitive pricing. Thirdly, it can stifle innovation, as the supplier may have less incentive to invest in research and development for improved products if their market share is guaranteed. Finally, there's a risk of vendor lock-in, making it difficult and costly to switch to a different supplier in the future, even if performance issues arise.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chemring Group PLC (UEI: 216244954)

Address: 155 KILGORE DR, TOONE, TN, 38381

Business Categories: Category Business, Labor Surplus Area Firm, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,954,505

Exercised Options: $26,954,505

Current Obligation: $26,954,505

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA821310D0006

IDV Type: IDC

Timeline