Army awards $194.8M contract for ammunition, with General Dynamics receiving a significant portion

Contract Overview

Contract Amount: $212,987,877 ($213.0M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-02-27

End Date: 2009-04-30

Contract Duration: 1,158 days

Daily Burn Rate: $183.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200605!000703!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05G0002 !A!N! !N!0002 ! !20060227!20080228!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !11399 16TH COURT N - SUIT!SAINT PETERSBU !FL!33716!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000025263681!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !332992!E! !4! ! ! ! ! !99990909!B! ! !B! !A!Y!J!2!002!B! !A!N!A! ! !N!C!N! ! ! !C!C!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $213.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: 200605!000703!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05G0002 !A!N! !N!0002 ! !20060227!20080228!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !11399 16TH COURT N - SUIT!SAINT PETERSBU !FL!33716!63000!103!12!SAINT PETERSBURG !PINE… Key points: 1. Contract value indicates substantial investment in small arms ammunition. 2. Competition dynamics suggest a potentially competitive bidding process for this type of ordnance. 3. Contract duration points to a medium-term need for sustained ammunition supply. 4. Geographic concentration in Florida for the contractor may have local economic implications. 5. The fixed-price contract type aims to control costs for the government. 6. This award falls within the broader defense sector's ongoing procurement of munitions.

Value Assessment

Rating: good

The total award amount of $194.8 million for ammunition is significant, reflecting a substantial government requirement. Benchmarking against similar contracts for ammunition requires detailed analysis of specific types and quantities. However, the fixed-price nature of the contract suggests an effort to establish clear cost expectations. The contract's value appears reasonable given the scale of defense procurement for essential munitions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and allowed to bid. This approach is generally favored for maximizing competition and achieving the best value for the government. The presence of multiple bidders, even if only two were ultimately awarded, suggests a healthy market for this type of ammunition.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing, potentially saving taxpayer dollars by ensuring the government receives the best possible offer.

Public Impact

The U.S. Army is the primary beneficiary, ensuring readiness and operational capability. Services delivered include the supply of ammunition, crucial for training and combat operations. The geographic impact is national, supporting military operations across various theaters. Workforce implications may include jobs at the contractor's facilities in Florida and potentially at supplier sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in raw materials impacting long-term costs.
Dependence on a limited number of large contractors for critical munitions.
Geopolitical events could disrupt supply chains for specialized ammunition components.

Positive Signals

Contract awarded through full and open competition, suggesting competitive pricing.
Firm fixed-price contract provides cost certainty for the government.
The contractor, General Dynamics, is a well-established defense supplier with a track record.

Sector Analysis

This contract falls within the defense industrial base, specifically the manufacturing of small arms ammunition. The market for defense-related ordnance is characterized by high barriers to entry, stringent quality control, and significant government oversight. Spending in this sector is driven by military readiness requirements, ongoing conflicts, and modernization programs. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by various military branches.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to be a small business set-aside, large defense contracts often have subcontracting requirements. It is possible that small businesses could be involved as subcontractors to General Dynamics, contributing to the supply chain for components or specialized services. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations. The Army Contracting Command would be responsible for administration and oversight. Inspector General reports and audits may be conducted to ensure compliance with contract terms, quality standards, and financial accountability. Transparency is generally maintained through contract award databases and reporting mechanisms.

Related Government Programs

Department of Defense Ammunition Procurement
Army Small Arms Systems
Ordnance Manufacturing Contracts
Defense Industrial Base Support

Risk Flags

Potential for supply chain disruptions
Dependence on specific raw material availability
Long-term sustainment cost considerations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $213.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. 200605!000703!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05G0002 !A!N! !N!0002 ! !20060227!20080228!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !11399 16TH COURT N - SUIT!SAINT PETERSBU !FL!33716!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000025263681!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !332992!E! !4! ! ! ! ! !999

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 $213.0 million.

What is the period of performance?

Start: 2006-02-27. End: 2009-04-30.

What is the historical spending trend for small arms ammunition by the Department of the Army?

Analyzing historical spending for small arms ammunition by the Department of the Army requires accessing and aggregating data from previous fiscal years. This would involve identifying all contracts awarded for similar types of ammunition (e.g., 5.56mm, 7.62mm, .50 caliber) and summing their values. Trends can reveal patterns of increased or decreased demand, potentially influenced by operational tempo, training cycles, or strategic shifts. For instance, periods of heightened conflict often correlate with increased ammunition procurement. Understanding these historical patterns provides context for the current award's magnitude and helps forecast future budgetary needs.

How does the per-unit cost of this ammunition compare to similar contracts awarded in the same period?

To compare the per-unit cost, we would need to know the exact quantity and type of ammunition procured under this $194.8 million contract. Assuming this is a delivery order against a larger contract, the specific details might be within the order itself. Once the quantity and type are identified, we can calculate the average per-unit cost. This calculated cost would then be benchmarked against other recently awarded contracts for identical or comparable ammunition types from different manufacturers or even different branches of the military. Significant deviations from the market average could indicate issues with pricing, quality, or specific contract terms.

What is General Dynamics Ordnance and Tactical Systems' track record with similar ammunition contracts?

General Dynamics Ordnance and Tactical Systems (GD-OTS) has a long-standing reputation as a major supplier of munitions to the U.S. military and allied nations. They have a history of producing a wide range of ammunition, including small arms, medium caliber, and artillery rounds. Their track record with similar contracts would involve reviewing past performance evaluations, any instances of contract disputes or overruns, and their ability to meet delivery schedules and quality specifications. GD-OTS is generally considered a reliable and capable contractor in this specialized field, often winning significant portions of large-scale ammunition procurements due to their manufacturing capacity and expertise.

What are the key performance indicators (KPIs) for this ammunition supply contract?

Key performance indicators for an ammunition supply contract typically revolve around delivery timeliness, quality assurance, and adherence to specifications. For this contract, KPIs would likely include meeting specified delivery dates for ammunition to designated locations, ensuring that the ammunition meets all technical requirements (e.g., ballistics, reliability, shelf-life), and maintaining stringent quality control throughout the manufacturing and delivery process. Failure to meet these KPIs could result in penalties, contract modifications, or even termination. The government would monitor these metrics closely to ensure operational readiness is not compromised.

What is the potential impact of this contract on the overall defense budget for munitions?

A $194.8 million contract for ammunition represents a significant allocation within the Department of Defense's budget for munitions. While it may seem large in isolation, it needs to be viewed in the context of the total annual defense budget and the specific needs for ammunition across all services. This award contributes to the overall spending on maintaining military readiness and supporting ongoing operations. Depending on the specific type of ammunition, it could be fulfilling a critical need for training or operational stockpiles. The budget impact is also influenced by whether this represents new procurement or replenishment of existing inventories.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition 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: 11399 16TH COURT N - SUIT, SAINT PETERSBU, FL, 33716

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J05G0002

IDV Type: IDC

Timeline