Air Force awards $24M contract for MJU-39 flares to Kilgore Flares Company LLC
Contract Overview
Contract Amount: $24,075,876 ($24.1M)
Contractor: Kilgore Flares Company LLC
Awarding Agency: Department of Defense
Start Date: 2009-11-25
End Date: 2010-12-31
Contract Duration: 401 days
Daily Burn Rate: $60.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MJU-39, FLARE, LA32
Place of Performance
Location: TOONE, HARDEMAN County, TENNESSEE, 38381
Plain-Language Summary
Department of Defense obligated $24.1 million to KILGORE FLARES COMPANY LLC for work described as: MJU-39, FLARE, LA32 Key points: 1. The contract value of $24.08 million for MJU-39 flares represents a significant investment in specialized pyrotechnic capabilities. 2. Kilgore Flares Company LLC, a sole-source provider for this specific item, highlights a concentrated market for certain defense components. 3. The fixed-price contract structure aims to control costs, but the lack of competition raises questions about optimal pricing. 4. This procurement falls under the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' sector, indicating specialized industrial support for defense.
Value Assessment
Rating: fair
The contract's fixed-price nature suggests an attempt to cap costs. However, without competitive bidding, it's difficult to definitively assess if the $24.08 million represents the best possible value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, meaning only one vendor was considered. This limits price discovery and potentially leads to higher costs than if multiple companies had competed.
Taxpayer Impact: Taxpayer funds are used for this sole-source award, emphasizing the need for strong justification and oversight to ensure fair pricing.
Public Impact
Ensures the availability of critical MJU-39 flares for Air Force operations. Supports a specialized manufacturing capability within the defense industrial base. Highlights the reliance on specific suppliers for niche defense equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Lack of competitive benchmarking makes value assessment challenging.
- Potential for higher costs due to single-vendor reliance.
Positive Signals
- Ensures supply of a critical defense item.
- Fixed-price contract provides cost certainty for the government.
Sector Analysis
This contract falls under miscellaneous chemical manufacturing, a sector often characterized by specialized processes and limited suppliers for niche defense applications. Benchmarks are difficult without comparable sole-source awards.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to determine small business participation.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of the Air Force to ensure the necessity of the item and the reasonableness of the price, even without competition.
Related Government Programs
- All Other Miscellaneous Chemical Product and Preparation Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Limited price discovery
- Potential for higher unit costs
- Lack of competitive benchmarking
Tags
all-other-miscellaneous-chemical-product, department-of-defense, tn, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.1 million to KILGORE FLARES COMPANY LLC. MJU-39, FLARE, LA32
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 $24.1 million.
What is the period of performance?
Start: 2009-11-25. End: 2010-12-31.
What is the justification for the sole-source award of the MJU-39 flare contract?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the unavailability of alternative sources that meet the specific requirements. For the MJU-39 flares, this could be due to specialized manufacturing processes or specific performance characteristics that only Kilgore Flares Company LLC can provide, necessitating a direct award without open competition.
How does the lack of competition impact the risk of cost overruns or inflated pricing?
The absence of competition inherently increases the risk of cost overruns and inflated pricing. Without competing bids, the government lacks a benchmark to negotiate against, potentially leading to the contractor setting a higher price than they might under a competitive scenario. This necessitates rigorous price analysis and justification by the contracting agency.
What is the long-term effectiveness of relying on a sole-source provider for critical defense components like flares?
Relying on a sole-source provider for critical components can be effective in ensuring supply chain stability for that specific item. However, it poses long-term risks, including potential vendor lock-in, lack of innovation driven by competition, and vulnerability if the sole provider faces production issues or goes out of business. Diversification strategies or fostering competition over time are often considered.
Industry Classification
NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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, 08
Business Categories: Category Business, Federally Funded Research and Development Corp, Labor Surplus Area Firm, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $24,075,876
Exercised Options: $24,075,876
Current Obligation: $24,075,876
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA821310D0012
IDV Type: IDC
Timeline
Start Date: 2009-11-25
Current End Date: 2010-12-31
Potential End Date: 2014-06-30 00:00:00
Last Modified: 2010-10-27
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