DoD's $40M contract for SAW inspections and production awarded to FN America LLC

Contract Overview

Contract Amount: $40,059,990 ($40.1M)

Contractor: FN America LLC

Awarding Agency: Department of Defense

Start Date: 2009-08-05

End Date: 2012-07-31

Contract Duration: 1,091 days

Daily Burn Rate: $36.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M249 SQUAD AUTOMATIC WEAPON (SAW)FIRST ARTICLE INSPECTIONS AND PRODUCTION

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $40.1 million to FN AMERICA LLC for work described as: M249 SQUAD AUTOMATIC WEAPON (SAW)FIRST ARTICLE INSPECTIONS AND PRODUCTION Key points: 1. Contract awarded for first article inspections and production of M249 Squad Automatic Weapons. 2. FN America LLC, a known defense contractor, secured this award. 3. The contract duration was 1091 days, spanning from August 2009 to July 2012. 4. Awarded as a Firm Fixed Price contract, indicating predictable costs for the government. 5. The contract was competed under 'Full and Open Competition After Exclusion of Sources', suggesting a specific justification for limiting initial bidders. 6. The North American Industry Classification System (NAICS) code 332994 points to Small Arms, Ordnance, and Ordnance Accessories Manufacturing. 7. The contract value of approximately $40 million represents a significant investment in small arms procurement. 8. The award was a Delivery Order, implying it was part of a larger basic ordering agreement or indefinite-delivery contract.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable first article inspection and production contracts for the M249 SAW. The firm fixed-price nature suggests cost certainty, but the overall value for money depends on the quality and timeliness of the delivered articles. Without detailed performance metrics or comparisons to alternative sourcing options, a definitive value assessment is difficult. The contract's age also limits direct comparison to current market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This procurement method typically involves an initial exclusion of certain sources, followed by a full and open competition among the remaining eligible sources. The specific reasons for the initial exclusion are not detailed here but often relate to proprietary data, unique capabilities, or prior experience. The number of bidders after the exclusion is not specified, making it difficult to fully assess the competitive landscape.

Taxpayer Impact: While the competition was not fully open from the outset, the 'after exclusion of sources' clause suggests a deliberate process to ensure fair opportunity among qualified entities. Taxpayers benefit from competition, which generally drives down prices and improves quality, even if the initial pool of bidders was narrowed.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will be equipped with M249 Squad Automatic Weapons. The contract ensures the availability of critical infantry support weapons for military operations. The services delivered include rigorous first article inspections to ensure quality and production of the weapons. The geographic impact is primarily within the United States, supporting domestic defense manufacturing capabilities. Workforce implications include employment within FN America LLC's manufacturing facilities and potentially its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Full and Open Competition After Exclusion of Sources' raises questions about the initial justification for limiting the bidder pool, potentially impacting price discovery.
Lack of detailed performance data makes it difficult to assess the true value for money and contractor performance.
The age of the contract (2009-2012) means current market conditions and technological advancements are not reflected.
Specific details on the 'first article inspections' process and criteria are not provided, making quality assessment challenging.
The contract type (Delivery Order) suggests it might be part of a larger, potentially less competitive, framework agreement.

Positive Signals

Awarded to FN America LLC, a known entity in defense manufacturing, suggesting a level of established capability.
The contract was Firm Fixed Price, providing cost predictability for the Department of Defense.
The procurement process, even with exclusion, aimed for competition among eligible sources.
Ensures the supply of a critical weapon system (M249 SAW) for military readiness.
The contract specifies 'first article inspections', indicating a focus on quality assurance before full production.

Sector Analysis

The defense manufacturing sector, specifically focusing on small arms and ordnance, is a critical component of national security. This contract falls under the Small Arms, Ordnance, and Ordnance Accessories Manufacturing industry (NAICS 332994). The market for such specialized defense equipment is often characterized by long-standing relationships between government agencies and a limited number of qualified contractors due to high barriers to entry, including technological expertise, manufacturing capabilities, and security clearances. Spending in this sector is driven by military modernization programs, operational readiness requirements, and geopolitical factors. Comparable spending benchmarks would typically involve other contracts for similar weapon systems or components awarded by the Department of Defense.

Small Business Impact

This contract does not appear to have a specific small business set-aside designation (sb: false). However, the nature of defense manufacturing for specialized weaponry often involves complex supply chains where small businesses can play a crucial role as subcontractors. Without specific subcontracting plans detailed in the award data, it's difficult to assess the direct impact on the small business ecosystem. The primary contractor, FN America LLC, is a significant entity, and its subcontracting practices would determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and inspection agencies. The 'first article inspections' suggest a built-in quality control mechanism. Accountability measures would be tied to the contract's performance clauses and the firm fixed-price structure. Transparency is limited by the available data; specific inspection reports, performance reviews, and detailed justifications for the 'exclusion of sources' are not publicly accessible. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

M249 Squad Automatic Weapon System
Ordnance and Ordnance Accessories Manufacturing
Department of the Army Weapon Procurement
Defense Small Arms Contracts
First Article Inspection Services

Risk Flags

Competition Limited by Exclusion of Sources
Lack of Detailed Performance Metrics
Contract Age Limits Current Benchmarking
Potential for Supply Chain Disruptions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.1 million to FN AMERICA LLC. M249 SQUAD AUTOMATIC WEAPON (SAW)FIRST ARTICLE INSPECTIONS AND PRODUCTION

Who is the contractor on this award?

The obligated recipient is FN AMERICA 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 $40.1 million.

What is the period of performance?

Start: 2009-08-05. End: 2012-07-31.

What was the specific justification for 'Full and Open Competition After Exclusion of Sources' for this contract?

The justification for 'Full and Open Competition After Exclusion of Sources' is not detailed in the provided data. This procurement method is typically used when there's a need to limit the initial pool of potential offerors due to specific requirements, such as proprietary technology, unique capabilities, or prior experience with a particular system. For instance, if FN America LLC held unique patents or manufacturing processes for the M249 SAW, or if prior development work was performed by them, the Army might exclude other sources initially. The subsequent 'full and open' competition would then occur among the remaining eligible and qualified sources. Without the specific documentation (e.g., Justification and Approval document), the precise reason remains speculative but points towards a deliberate, albeit narrowed, competitive approach.

How does the contract value of approximately $40 million compare to other M249 SAW procurement or sustainment contracts?

Direct comparison of this $40 million contract value to other M249 SAW contracts is difficult without access to a comprehensive database of historical and current procurements for this specific weapon system. The value represents the cost for first article inspections and initial production runs over a period of approximately three years (2009-2012). Subsequent contracts for sustainment, upgrades, or further production could vary significantly based on quantity, technological changes, and market conditions. The M249 SAW has been in service for decades, meaning there have likely been numerous contracts for its acquisition, spare parts, and maintenance. This $40 million figure should be viewed in the context of its specific scope (inspection and initial production) rather than as an overall lifecycle cost or total procurement value.

What are the key performance indicators (KPIs) associated with the 'first article inspections' for the M249 SAW?

The provided data does not specify the Key Performance Indicators (KPIs) for the 'first article inspections' of the M249 SAW under this contract. Typically, first article inspections are a critical quality assurance step where a sample of the initial production run is rigorously tested against design specifications, technical data packages, and performance requirements. KPIs would likely include adherence to dimensional tolerances, material properties, functional testing (e.g., firing tests, reliability checks), durability, and safety standards. Failure to meet these inspection criteria could result in rejection of the production lot and require corrective actions from the contractor. The contract's success hinges on these inspections validating the production process and ensuring the delivered weapons meet stringent military standards.

What is the historical spending pattern for M249 SAW procurement and related services by the Department of the Army?

Historical spending on the M249 SAW by the Department of the Army spans several decades, reflecting its long service life as a standard infantry automatic rifle. While specific aggregate spending figures are not readily available in this dataset, the Army has consistently procured and sustained the M249 platform since its introduction. Spending would have been higher during initial fielding periods and periods of significant conflict requiring large quantities. More recent spending likely focuses on sustainment, upgrades (e.g., to the M249 PIP - Product Improvement Program), spare parts, and potentially limited new production runs or replacements. The $40 million contract awarded in 2009 represents a segment of this ongoing investment. Analyzing broader spending trends would require examining multiple contract awards over time across different fiscal years and contract types.

What is the track record of FN America LLC in fulfilling defense contracts, particularly for small arms?

FN America LLC has a significant and established track record in fulfilling defense contracts, particularly for small arms and related weapon systems for the U.S. military and allied nations. They are known manufacturers of various firearms, including the M249 SAW itself, the M240 machine gun, and the M4/M16 rifle variants, often through contracts with the U.S. Army and other branches. Their long-standing presence in the defense industry suggests a history of meeting production demands and quality standards. While specific performance metrics for every contract are not publicly detailed, their continued awards for critical weapon systems indicate a generally positive track record in terms of capability, reliability, and delivery. However, like any large contractor, they may have faced challenges or scrutiny on specific contracts over their history.

What are the potential risks associated with a contract for weapon system production and inspection?

Potential risks associated with a contract for weapon system production and inspection include technical risks (e.g., design flaws, manufacturing defects, integration issues), schedule risks (e.g., delays in production, inspection bottlenecks, supply chain disruptions), cost risks (e.g., cost overruns, especially if not strictly fixed-price, unexpected material price increases), and quality risks (e.g., failure to meet stringent military specifications, leading to weapon unreliability or safety concerns). For this specific contract, risks could involve the accuracy and thoroughness of the 'first article inspections,' potential production issues with the M249 SAW, and reliance on FN America LLC's manufacturing capabilities. The 'exclusion of sources' could also introduce a risk if it inadvertently limited the competitive pool and led to suboptimal pricing or innovation.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W15QKN09R0475

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Societ Herstalienne Pour LA Finance L'industrielle ET LE C

Address: 797 OLD CLEMSON RD, COLUMBIA, SC, 29229

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,059,990

Exercised Options: $40,059,990

Current Obligation: $40,059,990

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN09D0019

IDV Type: IDC

Timeline