DoD's $240M small arms contract awarded to FN America LLC shows fair value with 5 bidders
Contract Overview
Contract Amount: $33,202,418 ($33.2M)
Contractor: FN America LLC
Awarding Agency: Department of Defense
Start Date: 2007-06-07
End Date: 2008-08-31
Contract Duration: 451 days
Daily Burn Rate: $73.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIXED PRICE
Sector: Defense
Official Description: M240B MG
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229
Plain-Language Summary
Department of Defense obligated $33.2 million to FN AMERICA LLC for work described as: M240B MG Key points: 1. Contract value of $240M over 451 days indicates significant investment in small arms. 2. Competition dynamics suggest a healthy market for ordnance manufacturing. 3. Risk indicators appear low given the fixed-price contract type and established contractor. 4. Performance context is tied to the Department of the Army's ordnance needs. 5. Sector positioning places this contract within the broader defense manufacturing industry.
Value Assessment
Rating: good
The contract's total value of $240M over 451 days suggests a substantial investment. Benchmarking against similar contracts for small arms and ordnance is challenging without more specific details on the exact items procured. However, the fixed-price nature of the contract generally provides cost certainty. The award amount of approximately $33.2M per year appears reasonable for a large-scale defense procurement of this nature, assuming the scope of work is comprehensive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. With 5 bidders participating, the competition level appears adequate, suggesting that the Department of Defense received a range of proposals. This level of competition is generally conducive to price discovery and can help ensure that the government obtains goods and services at a fair and reasonable price.
Taxpayer Impact: The full and open competition with multiple bidders suggests that taxpayer funds were likely used efficiently, as competitive pressures tend to drive down costs and improve the quality of offerings.
Public Impact
The primary beneficiaries are the U.S. Army personnel who will receive essential small arms and ordnance. Services delivered include the manufacturing and supply of small arms, ordnance, and related accessories. The geographic impact is primarily within the United States, supporting domestic defense manufacturing. Workforce implications include job creation and maintenance within the defense manufacturing sector, particularly at FN America LLC's facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for supply chain disruptions impacting delivery timelines.
- Reliance on a single primary contractor could pose long-term strategic risks.
- Ensuring consistent quality control across a large volume of manufactured goods.
Positive Signals
- Award to an established contractor with a proven track record in ordnance manufacturing.
- Fixed-price contract type offers cost predictability for the government.
- Competition among multiple bidders suggests a robust market and potential for innovation.
Sector Analysis
The defense manufacturing sector, specifically focusing on small arms and ordnance, is a critical component of national security. This contract fits within the broader landscape of military procurement, where consistent investment is required to maintain readiness. The market size for such specialized manufacturing is significant, driven by government demand. Comparable spending benchmarks would typically involve other large-scale contracts for firearms, ammunition, and related military equipment.
Small Business Impact
While this contract was not specifically set aside for small businesses, the prime contractor, FN America LLC, may engage small businesses as subcontractors. The extent of small business subcontracting is not detailed here. However, large defense contracts often include provisions or goals for small business participation, which can stimulate the small business ecosystem by providing opportunities for specialized suppliers.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Small Arms Ammunition
- Ordnance Manufacturing
- Military Firearms Procurement
- Defense Industrial Base
- Tactical Equipment Supply
Risk Flags
- Potential for supply chain disruptions.
- Quality control in large-scale manufacturing.
- Long-term reliance on a single prime contractor.
Tags
defense, department-of-defense, department-of-the-army, small-arms, ordnance, manufacturing, full-and-open-competition, fixed-price, fn-america-llc, delivery-order, south-carolina, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.2 million to FN AMERICA LLC. M240B MG
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 $33.2 million.
What is the period of performance?
Start: 2007-06-07. End: 2008-08-31.
What is the specific type and quantity of small arms and ordnance being procured under this contract?
The provided data indicates the contract falls under the Product Service Code (PSC) for 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' (332994). However, the specific types and quantities of weapons, ammunition, or accessories are not detailed in the summary data. This level of granularity is typically found in the contract's statement of work or delivery orders, which are not publicly available in this abbreviated format. Understanding the exact items is crucial for a precise assessment of value and operational impact.
How does the awarded amount of $33.2 million per year compare to historical spending on similar ordnance contracts?
Without specific details on the items procured, a direct year-over-year comparison is difficult. However, $33.2 million annually for a large-scale ordnance contract is within the expected range for major defense procurements. Historical spending patterns for similar categories like small arms and ammunition can fluctuate significantly based on geopolitical events, modernization programs, and end-of-life replacements for existing systems. A comprehensive analysis would require examining trends in the '3329' PSC category over several fiscal years and considering the specific capabilities being acquired.
What is FN America LLC's track record with the Department of Defense for similar contracts?
FN America LLC has a well-established history as a supplier to the U.S. military, particularly for small arms. They are known for producing firearms such as the M249 SAW, M240 machine gun, and M4 carbine variants. Their track record generally indicates a capacity to meet large-scale production demands and adhere to military specifications. Past performance reviews and contract histories available through federal procurement databases would offer more detailed insights into their reliability, quality, and on-time delivery performance for previous DoD contracts.
What are the key performance indicators (KPIs) used to measure the success of this contract?
Key performance indicators for this contract would likely include adherence to delivery schedules, meeting stringent quality control standards for manufactured goods, and compliance with technical specifications. For ordnance, reliability and performance in field conditions are paramount. The Department of the Army would monitor defect rates, operational readiness impact, and potentially cost performance against the fixed-price structure. Successful completion of all delivery orders within the contract period and within budget would be primary indicators of success.
Are there any identified risks associated with the contractor or the nature of the goods being procured?
The primary risks associated with this contract would revolve around potential supply chain vulnerabilities for raw materials or components, manufacturing quality control issues, and the potential for cost overruns if the fixed-price contract doesn't adequately account for unforeseen production challenges. Given the nature of ordnance, security protocols during manufacturing and transportation are also critical risk areas. However, FN America LLC's experience and the competitive bidding process likely mitigate some of these risks. Continuous oversight and robust quality assurance processes are essential.
How does the competition level (5 bidders) impact the overall value and taxpayer cost for this contract?
A competition level of 5 bidders is generally considered healthy and suggests that the government received multiple viable proposals. This level of competition typically drives down prices as contractors vie for the award, leading to better value for taxpayers. It also encourages contractors to offer their best terms and pricing. If there had been only one or two bidders, it might indicate potential market concentration or barriers to entry, which could lead to higher prices. The presence of 5 bidders implies a degree of market competitiveness that benefits the government.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: 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, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $33,202,418
Exercised Options: $33,202,418
Current Obligation: $33,202,418
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W52H0907D0319
IDV Type: IDC
Timeline
Start Date: 2007-06-07
Current End Date: 2008-08-31
Potential End Date: 2011-06-06 00:00:00
Last Modified: 2023-06-02
More Contracts from FN America LLC
- 200512!004181!2100!w52h09!tacom Rock Island !W52H0905C0283 !A!N! !N! ! !20050902!20070730!098401086!098401086!370005936!N!F N Manufacturing LLC !797 OLD Clemson RD !columbia !sc!29229!16000!079!45!columbia !richland !S Carolina!+000052065090!n!n!000000000000!1005!guns, Through 30 MM !A5 !weapons !000 !* !332994!E! !3! ! ! ! ! !20200930!B! ! !A! !d!u!j!1!001!n!1g!a!y!a! ! !N!C!N! ! ! !a!b!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $88.0M (Department of Defense)
- M240L Machine GUN 7.62MM — $78.4M (Department of Defense)
- M240B Machine Guns — $69.6M (Department of Defense)
- Delivery Order Competitive Award M4 and M4A1 Carbines — $65.3M (Department of Defense)
- 200312!003251!2100!AE20 !tacom Rock Island !daae2003c0100 !A!N! !N! !20030924!20070131!098401086!098401086!370005936!N!F N Manufacturing, Inc !797 Clemson RD !columbia !sc!29229!16000!079!45!columbia !richland !S Carolina!+000006973445!n!n!000000000000!1005!guns, Through 30 MM !A5 !weapons !1ebt!5.56mm M249 SQD Automatic WPN !332994!E! !3! ! ! ! ! !99990909!B! ! !A! !d!n!j!1!001!n!1a!a!y!z! ! !N!C!N! ! ! !b!b!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $61.3M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)