Department of the Army awards $23.7M for M4/M4A1 Carbine delivery, highlighting manufacturing capacity
Contract Overview
Contract Amount: $23,739,048 ($23.7M)
Contractor: FN America LLC
Awarding Agency: Department of Defense
Start Date: 2016-08-19
End Date: 2020-09-30
Contract Duration: 1,503 days
Daily Burn Rate: $15.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: M4/M4A1 CARBINE DELIVERY ORDER.
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229
Plain-Language Summary
Department of Defense obligated $23.7 million to FN AMERICA LLC for work described as: M4/M4A1 CARBINE DELIVERY ORDER. Key points: 1. The contract value represents a significant investment in small arms production for the U.S. Army. 2. FN America LLC, the sole awardee, has a history of supplying firearms to the U.S. military. 3. The firm fixed-price contract type suggests a predictable cost structure for the government. 4. Delivery occurred over a 1503-day period, indicating a sustained supply chain operation. 5. The contract was awarded under full and open competition, suggesting a robust bidding process. 6. The award is categorized under Small Arms, Ordnance, and Ordnance Accessories Manufacturing. 7. The contract was a delivery order against a larger indefinite-delivery contract.
Value Assessment
Rating: good
The total award of $23.7 million for M4/M4A1 carbines appears reasonable given the quantity and the nature of firearms manufacturing. Benchmarking against similar large-scale military firearm procurements would provide a more precise value-for-money assessment. However, the firm fixed-price nature of the contract helps mitigate cost overruns for the government. The duration of the delivery order (over 1500 days) suggests a steady, albeit long-term, supply, which can be efficient for production planning.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple potential bidders were solicited and allowed to submit proposals. The fact that it resulted in a delivery order suggests that the initial solicitation for the parent contract was competitive. The number of bidders for the parent contract would be a key indicator of the breadth of competition. A competitive process generally leads to better price discovery and potentially lower costs for the government.
Taxpayer Impact: Full and open competition ensures that taxpayers benefit from the most competitive pricing available in the market for these critical defense articles.
Public Impact
U.S. Army personnel are the primary beneficiaries, receiving essential infantry weapons. The contract supports the manufacturing and delivery of M4/M4A1 carbines, standard issue rifles. The geographic impact is primarily centered around FN America's manufacturing facilities in South Carolina. This contract sustains jobs within the defense manufacturing sector, particularly in firearms production.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long delivery period could indicate potential for supply chain disruptions or evolving military needs over time.
- Reliance on a single manufacturer for a critical weapon system could pose a risk if that manufacturer faces production issues.
- The specific details of the competition for the parent contract are not fully elaborated, leaving some ambiguity about the extent of initial bidder interest.
Positive Signals
- Award under full and open competition suggests a healthy market for this type of defense procurement.
- Firm fixed-price contract provides cost certainty for the government.
- FN America LLC's established track record in supplying firearms to the military implies reliability.
- The contract supports a critical defense capability, ensuring readiness for the armed forces.
Sector Analysis
The defense manufacturing sector, specifically small arms production, is a critical component of national security. This contract falls within the broader ordnance and accessories manufacturing industry. The market for military firearms is characterized by stringent quality requirements, long production cycles, and significant government oversight. Benchmarking this contract's value would involve comparing it to other large-scale procurements of similar weapon systems by various branches of the U.S. military or allied nations.
Small Business Impact
The data indicates that this contract was not specifically set aside for small businesses (sb: false) and there is no explicit mention of small business subcontracting goals (ss: false). Therefore, the primary impact on small businesses would be indirect, potentially through the supply chain of FN America LLC. Without specific subcontracting plans, it's difficult to assess the direct benefit to the small business ecosystem from this particular award.
Oversight & Accountability
The contract was awarded as a delivery order, implying it falls under a larger indefinite-delivery contract which likely has its own oversight mechanisms. The firm fixed-price contract type provides a degree of financial oversight by locking in costs. Accountability measures would be tied to the delivery schedule and quality specifications outlined in the contract. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.
Related Government Programs
- M4 Carbine Procurement
- Small Arms Manufacturing Contracts
- Department of the Army Weapon Systems
- Defense Logistics Agency Contracts
- Ordnance and Ammunition Procurement
Risk Flags
- Long-term delivery schedule may indicate potential for schedule slippage.
- Sole awardee for this delivery order raises concerns about potential single-source dependency if parent contract competition was limited.
- No explicit small business subcontracting goals noted, potentially limiting direct economic benefit to SMBs.
Tags
defense, department-of-the-army, firearms, small-arms-manufacturing, firm-fixed-price, delivery-order, full-and-open-competition, fn-america-llc, south-carolina, ordnance, m4-carbine, m4a1-carbine
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.7 million to FN AMERICA LLC. M4/M4A1 CARBINE DELIVERY ORDER.
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 $23.7 million.
What is the period of performance?
Start: 2016-08-19. End: 2020-09-30.
What is FN America LLC's track record with the Department of Defense for similar weapon systems?
FN America LLC has a long-standing and significant track record with the Department of Defense, particularly as the manufacturer of the M4 and M4A1 carbines. They have been a primary supplier of these rifles to the U.S. military for many years, often through competitive contracts and delivery orders against indefinite-delivery vehicles. Their history includes fulfilling large-volume orders and meeting stringent military specifications. This established relationship suggests a high degree of familiarity with military requirements, quality control processes, and production capabilities necessary for sustained delivery of critical weapon systems. The consistent awarding of contracts to FN America underscores their perceived reliability and capability within the defense industrial base for small arms.
How does the per-unit cost of the M4/M4A1 carbines under this contract compare to historical data or other similar contracts?
Without specific unit quantity data for this $23.7 million delivery order, a precise per-unit cost calculation and comparison is not feasible. However, historical data for M4/M4A1 carbines procured by the U.S. military under firm fixed-price contracts has generally ranged from approximately $700 to over $1,000 per unit, depending on the specific configuration, contract terms, and volume. Factors such as the inclusion of accessories, specific modifications, and the overall size of the order influence the per-unit price. Given the duration and total value, this contract likely represents a substantial quantity, and its per-unit cost would need to be benchmarked against comparable large-volume, long-term delivery orders to assess its competitiveness and value for money.
What are the primary risks associated with this contract, considering it's a delivery order for firearms?
Primary risks associated with this contract include potential supply chain disruptions affecting raw materials or components, manufacturing delays due to unforeseen technical issues or capacity constraints, and the risk of obsolescence if military requirements evolve rapidly. Given that FN America LLC is the sole awardee for this specific delivery order, there's also a concentration risk; any production issues at their facility could impact the Army's supply. Furthermore, geopolitical events could affect the availability or cost of imported components. Ensuring consistent quality control over a long production run is also a continuous risk that requires diligent oversight.
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 like this one, especially when the scope of work and specifications are well-defined, as they are for standard firearms like the M4/M4A1 carbine. FFP shifts the risk of cost overruns to the contractor (FN America LLC), incentivizing them to control their expenses and improve efficiency to maximize profit. This provides the government (Department of the Army) with cost certainty, making budgeting more predictable. However, if unforeseen issues arise that significantly impact the contractor's costs beyond their control, they may seek contract modifications, which could lead to price increases, though this is less common under FFP than other contract types.
What is the historical spending pattern for M4/M4A1 carbine procurements by the Department of the Army?
The Department of the Army has consistently procured M4 and M4A1 carbines for decades, reflecting their status as the standard-issue rifle for U.S. Army infantry. Historical spending patterns show significant annual investments in these platforms, often through multiple delivery orders against indefinite-delivery/indefinite-quantity (IDIQ) contracts awarded to prime manufacturers like FN America LLC. Total annual spending can fluctuate based on operational tempo, end-strength requirements, and modernization programs. Over the years, cumulative spending on M4/M4A1 carbines has amounted to billions of dollars, making it a substantial and ongoing category of defense expenditure. This specific $23.7 million award represents one component of that larger, continuous procurement effort.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Wespavia SA (UEI: 371972030)
Address: 797 OLD CLEMSON RD, COLUMBIA, SC, 29229
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,739,048
Exercised Options: $23,739,048
Current Obligation: $23,739,048
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN15D0072
IDV Type: IDC
Timeline
Start Date: 2016-08-19
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 12:09:00
Last Modified: 2020-06-23
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