DoD awards $24.3M for over 500K M792 cartridges and associated packaging, supporting Army and Marine Corps needs
Contract Overview
Contract Amount: $24,324,875 ($24.3M)
Contractor: Alliant Ammunition Systems Company, L.L.C.
Awarding Agency: Department of Defense
Start Date: 2007-06-22
End Date: 2009-09-30
Contract Duration: 831 days
Daily Burn Rate: $29.3K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 1. THE PURPOSE OF THIS DELIVERY ORDER IS TO FUND OPTION 4 FOR A TOTAL OF 518,535 M792 CARTRIDGES. THIS SHALL BE A COMBINED ARMY / MARINE CORPS BUY. THE BREAKDOWN IS AS FOLLOWS: US ARMY PORTION: 359,467 USMC PORTION: 159,068 THE DELIVERY INFORMATION FOR THESE CARTRIDGES SHALL BE DEFINITIZED IN A FUTURE MODIFICATION TO THIS DELIVERY ORDER. 2. THE DELIVERY ORDER ALSO PROVIDES FUNDING FOR 100 WOOD PALLETS. THE DELIVERY INFORMATION FOR THESE PALLETS SHALL BE DEFINITIZED IN A FUTURE MODIFICATION TO THIS DELIVERY ORDER. 3. THE DELIVERY INFORMATION FOR THE PA125 CONTAINERS AND THE 270 METAL PALLETS SHALL BE DEFINITIZED IN A FUTURE MODIFICATION TO THIS DELIVERY ORDER. 4. THE TOTAL VALUE OF THIS DELIVERY ORDER IS $24,324,874.50 5. ALL OTHER TERMS AND CONDITIONS OF THE CONTRACT REMAIN THE SAME AND ARE IN FULL FORCE AND EFFECT.
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $24.3 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C. for work described as: 1. THE PURPOSE OF THIS DELIVERY ORDER IS TO FUND OPTION 4 FOR A TOTAL OF 518,535 M792 CARTRIDGES. THIS SHALL BE A COMBINED ARMY / MARINE CORPS BUY. THE BREAKDOWN IS AS FOLLOWS: US ARMY PORTION: 359,467 USMC PORTION: 159,068 THE DELIVERY INFORMATION FOR THESE CARTRIDGES SHALL … Key points: 1. This delivery order funds the fourth option period for a significant quantity of M792 cartridges, indicating ongoing demand for this munition. 2. The procurement is a combined buy for both the U.S. Army and the U.S. Marine Corps, highlighting inter-service reliance on the same materiel. 3. The contract includes funding for associated packaging materials like wooden and metal pallets, essential for safe storage and transport of munitions. 4. Delivery details for the cartridges and some packaging components are to be finalized in future modifications, suggesting potential for schedule adjustments. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The total value of this delivery order is $24,324,874.50, covering both the cartridges and initial packaging funding.
Value Assessment
Rating: good
The total value of $24.3 million for over 518,000 cartridges translates to approximately $47 per cartridge. This unit price appears reasonable for specialized military ammunition, considering manufacturing complexity, quality control, and material costs. Benchmarking against similar small arms ammunition contracts would provide a more precise value assessment, but the fixed-price nature suggests a negotiated price that should be competitive.
Cost Per Unit: Approximately $47 per M792 cartridge.
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition after Exclusion of Sources.' While the 'after exclusion of sources' phrasing might seem counterintuitive, it typically refers to a scenario where a broad solicitation was issued, but only specific sources met the criteria to be considered for award, or it's a standard FAR clause that doesn't necessarily imply limited competition in practice. The 'full and open' aspect suggests a competitive process was intended.
Taxpayer Impact: A full and open competition, even with potential source exclusions, generally aims to achieve the best value for taxpayers by allowing multiple qualified vendors to bid, driving down prices through market forces.
Public Impact
End users are the U.S. Army and U.S. Marine Corps, ensuring readiness for combat and training operations. The primary service delivered is the supply of M792 cartridges, a critical component for certain weapon systems. The geographic impact is national, with potential distribution to various military installations within the U.S. and potentially overseas. Workforce implications include jobs in manufacturing, quality assurance, logistics, and supply chain management at the contractor's facility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Delivery dates for cartridges and some packaging are not yet finalized, introducing potential schedule risks.
- The 'after exclusion of sources' clause in the competition type warrants further investigation to ensure robust competition was indeed achieved.
Positive Signals
- The contract is Firm Fixed Price, providing cost certainty for the government.
- The procurement supports both major branches of the U.S. military, indicating a significant and validated requirement.
- The contractor, Alliant Ammunition Systems Company, L.L.C., is likely experienced in producing such munitions.
Sector Analysis
This contract falls within the Defense Industrial Base, specifically the Small Arms Ammunition Manufacturing sector. This sector is characterized by high barriers to entry due to stringent quality requirements, specialized manufacturing processes, and security protocols. The market is relatively consolidated, with a few key players capable of meeting military specifications. Spending in this area is driven by military readiness requirements and ongoing operational tempo.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if Alliant Ammunition Systems Company, L.L.C. chooses to engage them. Without specific subcontracting plans detailed in the award, the direct benefit to the small business ecosystem from this particular contract is likely limited.
Oversight & Accountability
As a delivery order under an existing contract, oversight is likely managed through the contracting officer and program management office responsible for the parent contract. The Firm Fixed Price nature simplifies some aspects of financial oversight. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Small Arms Ammunition
- Military Munitions Procurement
- Department of the Army Contracts
- Department of the Navy Contracts
- Defense Logistics Agency (DLA) Ammunition Programs
Risk Flags
- Delivery schedule uncertainty
- Potential for limited competition despite 'full and open' designation
Tags
defense, ammunition, army, marine-corps, firm-fixed-price, delivery-order, full-and-open-competition, arizona, small-arms-ammunition-manufacturing, option-period
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.3 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C.. 1. THE PURPOSE OF THIS DELIVERY ORDER IS TO FUND OPTION 4 FOR A TOTAL OF 518,535 M792 CARTRIDGES. THIS SHALL BE A COMBINED ARMY / MARINE CORPS BUY. THE BREAKDOWN IS AS FOLLOWS: US ARMY PORTION: 359,467 USMC PORTION: 159,068 THE DELIVERY INFORMATION FOR THESE CARTRIDGES SHALL BE DEFINITIZED IN A FUTURE MODIFICATION TO THIS DELIVERY ORDER. 2. THE DELIVERY ORDER ALSO PROVIDES FUNDING FOR 100 WOOD PALLETS. THE DELIVERY INFORMATION FOR THESE PALLETS SHALL BE DEFINITIZED IN A FUTURE MODIFICATION
Who is the contractor on this award?
The obligated recipient is ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $24.3 million.
What is the period of performance?
Start: 2007-06-22. End: 2009-09-30.
What is the historical spending trend for M792 cartridges under this contract vehicle or similar contracts?
Analyzing historical spending data for M792 cartridges is crucial for understanding the long-term demand and cost trends. Without access to the parent contract's full history or prior delivery orders, it's difficult to establish a precise trend. However, the fact that this is 'Option 4' suggests a multi-year commitment and potentially increasing or stable demand. If previous options were exercised at similar or higher values, it indicates sustained need. Conversely, a significant drop could signal changing requirements or increased efficiency. Further investigation into the contract's award history and previous delivery orders would reveal if this $24.3M represents a typical annual spend, an increase, or a decrease, providing context for the current award's value and the contractor's performance over time.
How does the per-unit cost of these M792 cartridges compare to other recent DoD procurements of similar ammunition?
The calculated per-unit cost of approximately $47 for the M792 cartridges provides a baseline for comparison. To assess value for money, this figure should be benchmarked against recent awards for comparable small arms ammunition, considering factors like caliber, type (e.g., training, combat, specialized), and quantity. If similar contracts show unit prices significantly lower or higher, it raises questions about the efficiency of this procurement or the unique specifications of the M792. For instance, if standard 5.56mm rounds cost $0.30, a $47 price point for a specialized cartridge like the M792 (often used in grenade launchers) is expected to be substantially higher. A detailed market analysis or review of publicly available contract awards for similar munitions would be necessary to definitively determine if this price is competitive and represents good value.
What are the specific risks associated with the 'delivery information to be defined in future modifications' clause?
The clause stating that 'delivery information... shall be defined in a future modification' introduces several potential risks. Primarily, it creates uncertainty regarding the timeline for receiving the critical M792 cartridges and associated packaging. This ambiguity can disrupt operational planning, training schedules, and inventory management for the end-user units (Army and Marine Corps). From a government perspective, it delays the realization of the contract's full value and purpose. It also provides the contractor with flexibility that could potentially be leveraged in future negotiations or lead to delays if unforeseen production or logistical issues arise. While common in some contract types, it necessitates close monitoring by the contracting officer to ensure timely definitization and adherence to essential delivery schedules.
What is the track record of Alliant Ammunition Systems Company, L.L.C. in fulfilling DoD contracts, particularly for ammunition?
Alliant Ammunition Systems Company, L.L.C. (AASC) has a significant history as a supplier of ammunition to the U.S. military. They have been involved in numerous contracts for various types of munitions, including small arms and medium caliber rounds. Their track record generally indicates a capability to produce and deliver required quantities, often under competitive solicitations. However, like many large defense contractors, they may have experienced past performance issues or contract disputes on specific awards. A thorough review of their contract history, including on-time delivery rates, quality compliance, and any past performance evaluations or disputes related to ammunition production, would be necessary to fully assess their reliability for this specific $24.3 million delivery order.
Does the 'combined Army/Marine Corps buy' indicate potential for cost savings through economies of scale?
Yes, a combined buy for the Army and Marine Corps for the same item, like the M792 cartridges, is a strategic approach often intended to achieve economies of scale. By consolidating requirements into a single, larger order, the government can potentially negotiate a lower unit price than if each service procured the item separately. This larger volume allows the contractor to optimize production runs, reduce setup costs per unit, and potentially offer volume discounts. The success of this strategy in realizing cost savings depends on the negotiation leverage achieved and the contractor's ability to efficiently scale production to meet the combined demand. It also promotes standardization across services, simplifying logistics and maintenance.
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 AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 900 EHLEN DRIVE, ANOKA, MN, 06
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $24,324,875
Exercised Options: $24,324,875
Current Obligation: $24,324,875
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN05D0031
IDV Type: IDC
Timeline
Start Date: 2007-06-22
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2010-07-23
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