DoD's $69.5M M240B Machine Gun contract awarded to FN America LLC shows strong competition
Contract Overview
Contract Amount: $69,553,390 ($69.6M)
Contractor: FN America LLC
Awarding Agency: Department of Defense
Start Date: 2007-07-05
End Date: 2009-10-31
Contract Duration: 849 days
Daily Burn Rate: $81.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: M240B MACHINE GUNS
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229
Plain-Language Summary
Department of Defense obligated $69.6 million to FN AMERICA LLC for work described as: M240B MACHINE GUNS Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. FN America LLC, a known entity in ordnance manufacturing, secured this significant award. 3. The contract duration of 849 days suggests a substantial, ongoing need for these weapons. 4. Fixed-price contract type helps mitigate cost overruns for the government. 5. The award falls under the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' NAICS code. 6. Geographic location of the awardee is South Carolina.
Value Assessment
Rating: good
The contract value of $69.5 million for M240B machine guns appears reasonable given the nature of the equipment and the competitive bidding process. Without specific per-unit cost data or direct comparisons to identical procurements, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure suggests that the government has locked in costs, providing a degree of predictability. The award to a single contractor, FN America LLC, implies they offered the best value among the bidders.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'full and open competition,' meaning all responsible sources were permitted to submit a bid. The presence of 5 bidders indicates a healthy level of competition for this defense procurement. A competitive environment generally leads to better pricing and innovation as contractors vie for the award. The number of bidders suggests that the market for these specific weapon systems is not overly concentrated.
Taxpayer Impact: A competitive award process ensures that taxpayer dollars are used efficiently by driving down prices and encouraging quality. The multiple bids received likely resulted in a more favorable price than a sole-source or limited competition scenario.
Public Impact
The primary beneficiaries are the U.S. Army personnel who will be equipped with M240B machine guns, enhancing their combat capabilities. The contract delivers essential infantry support weapons critical for various military operations. The geographic impact is primarily within the United States, with potential for global deployment of the equipment. This contract supports jobs within the defense manufacturing sector, specifically at FN America LLC in South Carolina.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for long-term reliance on a single supplier for critical ordnance if follow-on contracts are awarded without renewed competition.
- The specific performance metrics and reliability data for the delivered M240B units are not detailed in this award notice.
Positive Signals
- Awarded through full and open competition, maximizing potential for competitive pricing.
- Firm-fixed-price contract type provides cost certainty for the government.
- FN America LLC is an established manufacturer with a track record in producing firearms for military use.
- The contract specifies delivery orders, allowing for phased acquisition and management of resources.
Sector Analysis
The defense sector, particularly the small arms and ordnance manufacturing segment, is characterized by specialized production capabilities and stringent quality requirements. This contract for M240B machine guns fits within the broader category of tactical weapon systems procurement. The market size for such systems is driven by defense budgets and geopolitical needs. Comparable spending benchmarks would involve other large-scale procurements of crew-served weapons or individual firearms for military forces.
Small Business Impact
This contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses in the provided data. The award went to FN America LLC, a significant defense contractor. The absence of small business considerations in this specific award notice suggests that opportunities for small businesses might lie in lower-tier supply chains or in separate, smaller contract vehicles.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering goods at the agreed-upon price. Transparency is facilitated by the public nature of contract awards, though detailed performance data may be restricted. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Small Arms Procurement
- Ordnance and Accessories Manufacturing Contracts
- Infantry Weapon Systems
- FN America LLC Contracts
- M240 Machine Gun Family
Risk Flags
- Contract Awarded
- Defense Procurement
- Ordnance Manufacturing
- Fixed Price Contract
- Competitive Bidding
Tags
defense, department-of-defense, department-of-the-army, fn-america-llc, m240b-machine-gun, small-arms-ordnance-and-ordnance-accessories-manufacturing, full-and-open-competition, delivery-order, firm-fixed-price, south-carolina, machine-gun, infantry-weapon
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.6 million to FN AMERICA LLC. M240B MACHINE GUNS
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 $69.6 million.
What is the period of performance?
Start: 2007-07-05. End: 2009-10-31.
What is the historical spending trend for M240B machine guns by the Department of Defense?
Analyzing historical spending on M240B machine guns requires accessing detailed procurement data over multiple fiscal years. Typically, such data would reveal fluctuations based on military readiness needs, operational tempo, and budget allocations. For instance, periods of heightened conflict or major force structure changes might correlate with increased procurement. Conversely, stable operational environments or budget constraints could lead to reduced spending or reliance on existing inventories. FN America LLC, as a primary manufacturer, would likely feature prominently in historical awards. A comprehensive review would involve aggregating data from various contract awards, delivery orders, and potentially sustainment contracts related to the M240B platform to understand the overall investment trajectory.
How does the per-unit cost of the M240B under this contract compare to previous awards or industry benchmarks?
Determining the precise per-unit cost requires dividing the total contract value by the number of units procured, which is not explicitly stated in the provided data. However, if we assume the $69.5 million covers a significant quantity of M240B machine guns, the per-unit cost would likely be in the thousands of dollars, reflecting the complexity and military-grade specifications of the weapon. Comparing this to previous awards is crucial. If earlier contracts for similar quantities were significantly cheaper, it might indicate inflation, increased material costs, or a less competitive bidding environment. Conversely, if the cost is in line with or lower than historical data, it suggests effective price negotiation or competitive pressure. Industry benchmarks for comparable crew-served weapons can also provide context, though direct comparisons are difficult due to varying configurations and specifications.
What are the specific performance requirements and quality assurance measures for the M240B machine guns procured under this contract?
The contract data indicates a 'FIRM FIXED PRICE' type, which inherently places the onus on the contractor, FN America LLC, to meet all specified performance requirements and quality standards to receive payment. While the specific technical specifications (e.g., reliability rates, accuracy standards, material composition) are not detailed in this summary, they would be outlined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). Quality assurance would likely involve government inspections and testing at various stages of production and before final acceptance. Compliance with military standards (e.g., MIL-STD) and rigorous testing protocols are standard for such critical defense equipment to ensure operational effectiveness and safety in demanding combat environments.
What is FN America LLC's track record with the M240B and similar defense contracts?
FN America LLC has a well-established and extensive track record as a manufacturer of firearms for military and law enforcement applications, including being a primary producer of the M240B machine gun for the U.S. military. They have historically held significant contracts for this weapon system and its variants. Their experience encompasses not only production but also potentially upgrades and sustainment. This long-standing relationship suggests a deep understanding of the weapon's design, manufacturing processes, and the stringent quality and performance requirements mandated by the Department of Defense. Their continued success in winning competitive bids for such critical ordnance underscores their perceived reliability and capability within the defense industrial base.
How does the competition level (5 bidders) impact the overall value and risk for this contract?
A competition level of five bidders is generally considered robust for a specialized defense procurement like machine guns. This level of competition typically drives down prices as contractors strive to offer the most competitive bid to win the contract. It also encourages innovation and ensures that the government selects a solution that offers the best balance of cost, performance, and reliability. From a risk perspective, multiple bidders reduce the government's dependence on any single supplier, mitigating risks associated with supply chain disruptions or contractor performance issues. If one bidder fails to meet requirements, there are other viable options. This competitive landscape enhances the overall value proposition for the taxpayer by ensuring efficiency and promoting a healthy market.
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: 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, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $69,553,390
Exercised Options: $69,553,390
Current Obligation: $69,553,390
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: 2007-07-05
Current End Date: 2009-10-31
Potential End Date: 2009-10-31 12:10:00
Last Modified: 2023-06-02
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