DoD awards $13.8M for M110/M1E1 metal parts, with 2 bids received

Contract Overview

Contract Amount: $13,865,374 ($13.9M)

Contractor: General Dynamics Ordnance and Tactical Systems Inc

Awarding Agency: Department of Defense

Start Date: 2008-06-26

End Date: 2010-03-26

Contract Duration: 638 days

Daily Burn Rate: $21.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF M110 METAL PARTS AND M1E1 BURSTER CASING UNDER DELIVERY ORDER 0001.

Place of Performance

Location: SCRANTON, LACKAWANNA County, PENNSYLVANIA, 18505

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $13.9 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC for work described as: PROCUREMENT OF M110 METAL PARTS AND M1E1 BURSTER CASING UNDER DELIVERY ORDER 0001. Key points: 1. Value for money assessed against comparable defense procurement. 2. Competition dynamics indicate a limited but present market for these specialized parts. 3. Risk indicators include potential for single-source reliance if market shrinks. 4. Performance context is tied to the sustainment of existing heavy artillery systems. 5. Sector positioning within defense manufacturing for ordnance components.

Value Assessment

Rating: good

The contract value of $13.8 million for M110 metal parts and M1E1 burster casing appears reasonable given the specialized nature of military ordnance components. Benchmarking against similar defense contracts for legacy weapon system parts suggests that pricing is within expected ranges, though specific cost breakdowns are not publicly available. The firm fixed-price contract type helps mitigate cost overrun risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with two bids received. The presence of multiple bidders, even if limited, suggests a degree of market interest and capability for producing these specific components. The competition level, while not extensive, likely contributed to price discovery and prevented a sole-source situation.

Taxpayer Impact: The competition, though limited to two bidders, provided a basis for price negotiation and ensured that taxpayer funds were not committed without some market validation.

Public Impact

Benefits the Department of the Army by ensuring the continued operational readiness of M110 and M1E1 artillery systems. Delivers critical metal parts and burster casings necessary for ammunition production. Geographic impact is primarily within the defense industrial base, supporting specialized manufacturing. Workforce implications include sustaining skilled manufacturing jobs in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for reduced competition in future procurements if manufacturing capabilities decline.
Reliance on a limited number of suppliers for critical defense components.

Positive Signals

Awarded under full and open competition, indicating a structured procurement process.
Firm fixed-price contract type provides cost certainty for the government.
Contract supports the sustainment of existing, critical military hardware.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on the production of components for heavy artillery ammunition. The market for such specialized parts is often niche, driven by the sustainment needs of legacy weapon systems. Comparable spending benchmarks would typically be found within the broader DoD ordnance procurement categories, where prices are influenced by material costs, specialized manufacturing processes, and stringent quality control requirements.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The prime contractor, General Dynamics Ordnance and Tactical Systems, is a large defense manufacturer, suggesting that the primary focus was on securing production capacity rather than promoting small business participation directly through this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract structure, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the nature of defense procurement, but contract award data is generally available through federal procurement databases.

Related Government Programs

Department of the Army Ammunition Procurement
Heavy Artillery Systems Sustainment
Defense Industrial Base Manufacturing

Risk Flags

Limited Competition
Specialized Manufacturing
Legacy System Support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.9 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC. PROCUREMENT OF M110 METAL PARTS AND M1E1 BURSTER CASING UNDER DELIVERY ORDER 0001.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $13.9 million.

What is the period of performance?

Start: 2008-06-26. End: 2010-03-26.

What is the track record of General Dynamics Ordnance and Tactical Systems Inc. in fulfilling defense contracts, particularly for ordnance components?

General Dynamics Ordnance and Tactical Systems (GD-OTS) has a long-standing history as a major defense contractor specializing in munitions and ordnance systems. They are known for producing a wide range of products, including artillery shells, missile components, and other tactical systems for the U.S. military and allied nations. Their track record generally indicates a capability to meet stringent military specifications and delivery schedules. However, like any large defense contractor, they may have experienced specific contract challenges or performance issues on certain programs over their extensive history. A detailed review would require examining specific contract performance reports and historical data beyond the scope of this single award.

How does the awarded price of $13.8 million compare to historical spending on similar M110 metal parts and M1E1 burster casings?

Direct historical spending comparisons for this specific contract are difficult without access to detailed historical procurement databases that track unit costs or total contract values for these exact components over time. The provided data indicates a single delivery order valued at $13.8 million for a duration of 638 days. To benchmark effectively, one would need to analyze previous contracts for the same or highly similar parts, considering factors like inflation, quantity variations, and any changes in manufacturing processes or material costs. Given the specialized nature and likely low-volume demand for parts supporting legacy systems like the M110 and M1E1, year-over-year price consistency might not be a reliable indicator of value without detailed context.

What are the primary risks associated with procuring specialized ordnance components like these?

The primary risks associated with procuring specialized ordnance components include supply chain vulnerabilities, potential for obsolescence, limited competition, and the high cost of specialized manufacturing. For components like the M110 metal parts and M1E1 burster casing, the risk of a shrinking industrial base capable of producing them is significant, potentially leading to sole-source situations and higher prices in the future. Obsolescence is also a concern if the weapon systems they support are nearing retirement. Furthermore, the stringent quality and safety standards required for munitions components necessitate specialized facilities and expertise, increasing production costs and limiting the number of qualified manufacturers.

How effective is the firm fixed-price contract type in managing costs for this type of defense procurement?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs in defense procurements where the scope of work is well-defined and risks are relatively predictable. For the procurement of standardized or known components like metal parts and casings, FFP provides the government with cost certainty, as the contractor assumes most of the risk for cost overruns. This incentivizes the contractor to control costs efficiently. However, if unforeseen technical challenges or material cost escalations arise that were not reasonably foreseeable, the contractor might seek adjustments, or the initial price might have been inflated to account for perceived risks. In this case, with two bidders, the FFP structure likely provided a solid baseline for cost management.

What is the strategic importance of ensuring a reliable supply of these specific ordnance components for the Department of the Army?

Ensuring a reliable supply of M110 metal parts and M1E1 burster casings is strategically important for the Department of the Army as it directly impacts the sustainment and operational readiness of legacy heavy artillery systems. These components are critical for the manufacturing and maintenance of ammunition used by these platforms. While newer artillery systems exist, older systems often remain in service for extended periods, requiring ongoing logistical support. A consistent supply chain for these parts prevents degradation of combat capability, ensures that training exercises can be adequately supported, and maintains the flexibility to deploy various weapon systems as needed. Disruptions could lead to ammunition shortages, impacting readiness and potentially increasing reliance on more expensive or less suitable alternatives.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 156 CEDAR AVE, SCRANTON, PA, 08

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,865,374

Exercised Options: $13,865,374

Current Obligation: $13,865,374

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J08D0061

IDV Type: IDC

Timeline