Department of the Army awards $15.3M contract for M16A4 rifles to FN America LLC
Contract Overview
Contract Amount: $15,295,338 ($15.3M)
Contractor: FN America LLC
Awarding Agency: Department of Defense
Start Date: 2008-04-28
End Date: 2009-05-30
Contract Duration: 397 days
Daily Burn Rate: $38.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: M16A4 RIFLES
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229
Plain-Language Summary
Department of Defense obligated $15.3 million to FN AMERICA LLC for work described as: M16A4 RIFLES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract value of $15.3 million is for a specific delivery order, not the total program value. 3. The delivery order was for M16A4 rifles, a mature weapon system. 4. The contract duration of approximately 13 months (397 days) indicates a focused procurement. 5. The firm-fixed-price contract type shifts cost risk to the contractor. 6. The award was made to FN America LLC, a known defense contractor in small arms manufacturing.
Value Assessment
Rating: good
The contract value of $15.3 million for M16A4 rifles appears reasonable given the nature of the equipment. Without specific unit counts or detailed specifications, a direct per-unit cost comparison is difficult. However, FN America LLC is a primary manufacturer of M16/M4 variants, suggesting established production costs and potential economies of scale. The firm-fixed-price nature of the contract also implies that the price was negotiated to be competitive and cover all contractor costs and profit.
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 bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which can lead to better pricing and value for the government. The open competition suggests that the Army sought the best available offer based on price and other factors.
Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing achieved through a full and open solicitation, which aims to secure the most advantageous offer.
Public Impact
The primary beneficiaries are the U.S. Army personnel who will be equipped with M16A4 rifles. The contract delivers a critical component for infantry and other combat arms units. The geographic impact is primarily within the United States, where the rifles will be manufactured and potentially fielded. The contract supports jobs within the defense manufacturing sector, specifically at FN America LLC's facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific unit quantity makes it difficult to assess per-unit cost competitiveness.
- Limited information on the specific technical requirements and any potential sole-source justifications for components.
- The contract is a delivery order, so its scope might be part of a larger, potentially less competitive, indefinite-delivery/indefinite-quantity (IDIQ) contract.
Positive Signals
- Awarded under full and open competition, indicating a robust bidding process.
- Firm-fixed-price contract type provides cost certainty for the government.
- Contract awarded to a known and experienced manufacturer of the specified weapon system.
- The contract is for a mature and proven weapon system, reducing technical risk.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on small arms manufacturing. The market for military small arms is dominated by a few key domestic and international manufacturers. FN America LLC is a significant player in this market, holding contracts for various rifle and machine gun platforms for the U.S. military. Spending in this category is consistent with ongoing military readiness requirements and modernization efforts, though M16A4s represent a legacy system being supplemented or replaced by newer platforms in some units.
Small Business Impact
The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While FN America LLC is a large business, there is no information on subcontracting plans for small businesses within this specific delivery order. The impact on the small business ecosystem would depend on whether FN America utilizes small business subcontractors for components or services, which is not detailed here.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting command and potentially the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver conforming goods. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- M4 Carbine Procurement
- Small Arms Ammunition Procurement
- Individual Weapons Systems
- Department of Defense Small Arms Manufacturing
Risk Flags
- Potential for obsolescence as newer rifle platforms are adopted.
- Dependence on a single contractor for specific weapon system variants.
Tags
defense, department-of-the-army, small-arms, fn-america-llc, m16a4-rifles, firm-fixed-price, full-and-open-competition, delivery-order, south-carolina, defense-manufacturing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.3 million to FN AMERICA LLC. M16A4 RIFLES
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 $15.3 million.
What is the period of performance?
Start: 2008-04-28. End: 2009-05-30.
What is the historical spending trend for M16A4 rifles by the Department of the Army?
Historical spending on M16A4 rifles by the Department of the Army has likely decreased over the past decade as the service has increasingly adopted the M4 carbine and is exploring next-generation rifle platforms. While specific figures for M16A4-only procurements are not readily available in summary data, FN America LLC has been a consistent supplier of M16 variants for many years. The Army's overall small arms budget fluctuates based on operational tempo, end-of-life replacements, and modernization initiatives. This $15.3 million award represents a specific, relatively small procurement for a mature system, suggesting it's likely for replacement parts, specific unit needs, or to maintain a certain level of inventory rather than a large-scale re-armament effort.
How does the unit cost of these M16A4 rifles compare to other similar rifle procurements?
Direct unit cost comparison for these M16A4 rifles is challenging without knowing the exact quantity procured under this $15.3 million delivery order. However, M16A4 rifles are a mature weapon system, and FN America LLC is a primary manufacturer. Historically, unit costs for military rifles can range significantly based on quantity, specific configurations, and contract terms. For large-scale procurements, unit costs might fall into the $600-$1000 range, but this can vary. This contract's value suggests a potentially higher per-unit cost if the quantity was smaller, or it could reflect the inclusion of accessories, specific testing, or logistical support. Without the quantity, a precise benchmark is not feasible.
What are the primary risks associated with this contract for the Department of the Army?
The primary risks associated with this contract are relatively low given the mature nature of the M16A4 rifle. Potential risks include delivery delays, although the contractor, FN America LLC, has a strong track record. Technical risks are minimal as the weapon system is well-established. A minor risk could be obsolescence, as the Army is moving towards newer rifle platforms, but the M16A4 remains in service with many units. Ensuring the rifles meet all stringent military specifications and quality standards is a constant oversight requirement. The firm-fixed-price contract mitigates financial risk for the government.
What is FN America LLC's track record with the Department of Defense for similar weapon systems?
FN America LLC has an extensive and strong track record with the Department of Defense, particularly for M16 and M4 family of rifles. They are a primary manufacturer and have held numerous contracts for these weapon systems, including sustainment and upgrades, for decades. Their performance has generally been reliable, fulfilling significant portions of the military's small arms requirements. They are known for their manufacturing capabilities and adherence to military specifications. This long-standing relationship and proven performance history likely contributed to their selection for this contract.
How does this contract fit into the broader strategy for equipping U.S. Army infantry units?
This contract for M16A4 rifles likely represents a component of the Army's ongoing effort to maintain and equip its forces with reliable infantry weapons. While the M4 carbine is more prevalent and newer platforms are being explored, the M16A4 remains a standard issue rifle for many units, particularly certain infantry roles and support elements. This procurement could be for units still fielding the M16A4, for replacement of attritioned weapons, or potentially for reserve components. It signifies a continued reliance on this proven platform, even as the Army diversifies its small arms inventory.
What is the potential for cost overruns or scope creep in this firm-fixed-price contract?
The potential for cost overruns or scope creep in this firm-fixed-price contract is generally low. By definition, a firm-fixed-price contract establishes a ceiling price that the contractor must adhere to, regardless of their actual costs. Any deviations from the agreed-upon scope would require a formal contract modification, which would involve negotiation and approval. Scope creep is managed through clear contract specifications and diligent oversight. If the contractor encounters unforeseen issues that increase their costs, those losses are absorbed by the contractor, not the government, unless the scope of work is officially changed.
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
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: $15,295,338
Exercised Options: $15,295,338
Current Obligation: $15,295,338
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W52H0908D0121
IDV Type: IDC
Timeline
Start Date: 2008-04-28
Current End Date: 2009-05-30
Potential End Date: 2009-05-30 00:00:00
Last Modified: 2023-06-02
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