DoD awards $142M for ammunition, with General Dynamics securing the contract for small arms ammunition manufacturing

Contract Overview

Contract Amount: $142,079,650 ($142.1M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-01-30

End Date: 2010-12-31

Contract Duration: 1,431 days

Daily Burn Rate: $99.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS AWARD IS TO AWARD FUNDS IN FY 07 IN ACCORDANCE WITH THE BASIC ORDERING AGREEMENT (BOA)TO PROCURE 5.56MM, 7.62MM AND CALIBER .50 AMMUNITION.

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $142.1 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: THE PURPOSE OF THIS AWARD IS TO AWARD FUNDS IN FY 07 IN ACCORDANCE WITH THE BASIC ORDERING AGREEMENT (BOA)TO PROCURE 5.56MM, 7.62MM AND CALIBER .50 AMMUNITION. Key points: 1. The contract focuses on procuring 5.56mm, 7.62mm, and .50 caliber ammunition. 2. This award represents a significant investment in essential military supplies. 3. The duration of the contract spans over three years, indicating sustained demand. 4. The fixed-price contract type suggests predictable costs for the government. 5. The procurement falls under the 'Small Arms Ammunition Manufacturing' industry code.

Value Assessment

Rating: good

The contract value of approximately $142 million for over three years of ammunition supply appears reasonable given the nature of military procurement. Benchmarking against similar large-scale ammunition contracts would provide a more precise value-for-money assessment. However, the firm fixed-price structure generally offers cost certainty to the government, mitigating risks of cost overruns.

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 had the opportunity to bid. This competitive process is expected to drive favorable pricing and ensure the government receives the best value. The presence of two bids suggests a healthy level of competition for this essential defense supply.

Taxpayer Impact: Full and open competition for ammunition procurement ensures that taxpayer dollars are used efficiently by fostering a competitive bidding environment, leading to potentially lower prices and higher quality products.

Public Impact

The primary beneficiaries are the U.S. Army and other Department of Defense branches requiring small arms ammunition. The services delivered include the supply of critical 5.56mm, 7.62mm, and .50 caliber ammunition. The contract's geographic impact is primarily within the United States, supporting domestic manufacturing and supply chains. Workforce implications include support for jobs in the defense manufacturing sector, particularly in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Fluctuations in raw material costs could affect long-term pricing stability if not adequately managed.
Ensuring consistent quality control across large production runs is crucial.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Firm fixed-price contract provides cost predictability.
Long-term contract duration indicates a stable demand and supply relationship.
Procurement of essential munitions supports national security objectives.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on small arms ammunition. The market for military-grade ammunition is characterized by stringent quality requirements, long production lead times, and significant government demand. General Dynamics Ordnance and Tactical Systems is a major player in this specialized industry. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by the DoD or allied nations.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The primary contractor, General Dynamics, is a large corporation. The impact on the small business ecosystem is likely indirect, through potential competition for raw materials or specialized components, rather than direct participation in this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified quantities and quality. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Small Arms Ammunition Manufacturing Contracts
General Dynamics Ordnance and Tactical Systems Awards
Army Logistics and Readiness Contracts

Risk Flags

Long-term supply chain dependency
Potential for raw material price volatility
Ensuring consistent quality over extended production runs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $142.1 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. THE PURPOSE OF THIS AWARD IS TO AWARD FUNDS IN FY 07 IN ACCORDANCE WITH THE BASIC ORDERING AGREEMENT (BOA)TO PROCURE 5.56MM, 7.62MM AND CALIBER .50 AMMUNITION.

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 $142.1 million.

What is the period of performance?

Start: 2007-01-30. End: 2010-12-31.

What is the historical spending pattern for small arms ammunition by the Department of the Army over the last five fiscal years?

Analyzing historical spending patterns for small arms ammunition by the Department of the Army over the last five fiscal years would reveal trends in demand, pricing, and the types of ammunition procured. This data is crucial for understanding the context of the $142 million award. For instance, if spending has been consistently high, it indicates a stable, ongoing need. Conversely, a significant increase or decrease might signal shifts in operational tempo, strategic priorities, or inventory management policies. Understanding these patterns helps in assessing whether the current award is in line with historical norms or represents a deviation, potentially requiring further justification. It also informs future budget planning and procurement strategies for essential munitions.

How does the per-unit cost of the ammunition procured under this contract compare to similar contracts awarded to other manufacturers?

Comparing the per-unit cost of ammunition under this $142 million contract to similar awards for the same calibers (5.56mm, 7.62mm, .50 caliber) to other manufacturers is essential for assessing value for money. This benchmark analysis requires access to detailed pricing data from comparable contracts, which may not always be publicly available. Factors influencing per-unit cost include production volume, raw material prices at the time of award, manufacturing efficiencies, and specific quality standards. If the per-unit cost is significantly higher than market benchmarks or competitor pricing, it could indicate potential issues with the pricing negotiation or a lack of sufficient competition. Conversely, a competitive per-unit cost suggests efficient procurement and effective use of taxpayer funds.

What are the specific quality assurance and testing protocols required for the ammunition under this contract?

The specific quality assurance and testing protocols for the ammunition procured under this $142 million contract are critical to ensuring its reliability and effectiveness in the field. These protocols typically involve rigorous testing for factors such as projectile accuracy, propellant burn rate, primer consistency, casing integrity, and shelf life. The Department of the Army would likely mandate adherence to specific military standards (e.g., MIL-STD) and require detailed inspection reports and certifications from the contractor, General Dynamics Ordnance and Tactical Systems. Understanding these protocols helps in evaluating the risk associated with the ammunition's performance and ensures that the procured supplies meet the stringent requirements necessary for military operations, thereby safeguarding personnel and mission success.

What is the track record of General Dynamics Ordnance and Tactical Systems in fulfilling large-scale ammunition contracts for the DoD?

General Dynamics Ordnance and Tactical Systems (GD-OTS) has a substantial track record in fulfilling large-scale ammunition contracts for the Department of Defense and other government agencies. As a major defense contractor, GD-OTS is known for its production capabilities across a wide range of munitions, including small arms, medium caliber, and artillery rounds. Their history includes supplying significant quantities of ammunition for various military operations and readiness requirements. Evaluating their past performance on similar contracts, including on-time delivery, quality adherence, and cost management, provides insight into their reliability and capacity to meet the demands of this $142 million award. Past performance data, often available through contract databases or agency performance reports, is a key indicator of future success.

What are the potential risks associated with the long-term supply of ammunition, and how are they mitigated in this contract?

Potential risks associated with the long-term supply of ammunition, such as fluctuations in raw material costs, geopolitical instability affecting supply chains, and obsolescence, are significant. For this $142 million contract, the firm fixed-price (FFP) structure helps mitigate cost escalation risks for the government, as the price is set upfront. However, the contractor bears the risk of increased material costs. Mitigation strategies employed by the DoD might include requiring the contractor to maintain strategic stockpiles of critical raw materials, incorporating clauses for price adjustments under specific, predefined conditions (though less common in FFP), and ensuring robust quality control to prevent costly defects. The contract's duration (2007-2010) also necessitates careful planning for production capacity and inventory management to ensure sustained availability.

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

Financial Breakdown

Contract Ceiling: $142,079,650

Exercised Options: $142,079,650

Current Obligation: $142,079,650

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J05G0002

IDV Type: IDC

Timeline