Department of the Army awarded $26.5M for ammunition demilitarization, with 3 bidders competing

Contract Overview

Contract Amount: $26,529,267 ($26.5M)

Contractor: SOC Nevada LLC

Awarding Agency: Department of Defense

Start Date: 2011-01-04

End Date: 2013-02-15

Contract Duration: 773 days

Daily Burn Rate: $34.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEMILITARIZATION OF AMMUNITION

Place of Performance

Location: HAWTHORNE, MINERAL County, NEVADA, 89415

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $26.5 million to SOC NEVADA LLC for work described as: DEMILITARIZATION OF AMMUNITION Key points: 1. The contract value of $26.5 million for ammunition demilitarization appears reasonable given the specialized nature of the service. 2. Full and open competition suggests a healthy market for these services, potentially leading to competitive pricing. 3. The duration of the contract (773 days) indicates a significant, ongoing need for demilitarization services. 4. The fixed-price contract type shifts risk to the contractor, which is generally favorable for the government. 5. The contractor, SOC Nevada LLC, is positioned to provide essential support services to the Department of Defense.

Value Assessment

Rating: good

The contract value of $26.5 million for ammunition demilitarization is within a typical range for such specialized services. While direct comparisons are difficult without specific details on the scope and type of ammunition, the fixed-price nature of the contract suggests that the government secured a defined cost for the services. The number of bidders (3) indicates a competitive environment that likely contributed to a fair market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. With three bidders participating, the competition level suggests that the market is sufficiently robust to support multiple providers for ammunition demilitarization. This level of competition is generally conducive to achieving competitive pricing and ensuring that the government receives value for its investment.

Taxpayer Impact: The full and open competition process ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down costs and encourages innovation among contractors.

Public Impact

The primary beneficiaries are the Department of the Army and the Department of Defense, ensuring safe and compliant disposal of ammunition. The service delivered is the demilitarization of ammunition, a critical process for safety and environmental protection. The contract is geographically focused on Nevada (NV), indicating a specific operational need in that region. This contract supports specialized labor in the defense services sector, requiring trained personnel for hazardous material handling.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for environmental risks associated with ammunition demilitarization if not handled with strict protocols.
Dependence on a single contractor for a critical defense support function in a specific region.

Positive Signals

Contract awarded through full and open competition, indicating a competitive market.
Firm fixed-price contract type, which provides cost certainty for the government.
Contractor is likely experienced in handling specialized defense support services.

Sector Analysis

Ammunition demilitarization falls within the broader defense services sector, which is a critical component of national security. This sector involves specialized handling, processing, and disposal of military materials. The market size for defense services is substantial, driven by ongoing military operations and the need for lifecycle management of equipment. This contract represents a specific, yet vital, expenditure within the larger defense industrial base, ensuring compliance with safety and environmental regulations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor, SOC Nevada LLC, would determine any subcontracting opportunities based on their own business strategy and capabilities, rather than a government mandate for small business participation.

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 inherent in the firm fixed-price contract, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency (DLA) Disposition Services
Ordnance and Ammunition Maintenance
Environmental Remediation Services
Hazardous Waste Management

Risk Flags

Environmental Compliance Risk
Safety Protocol Adherence Risk
Contractor Performance Risk
Supply Chain Disruption Risk (for specialized materials/equipment)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.5 million to SOC NEVADA LLC. DEMILITARIZATION OF AMMUNITION

Who is the contractor on this award?

The obligated recipient is SOC NEVADA 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 $26.5 million.

What is the period of performance?

Start: 2011-01-04. End: 2013-02-15.

What is the track record of SOC Nevada LLC in performing similar ammunition demilitarization services?

Assessing the track record of SOC Nevada LLC requires a deeper dive into their past performance on similar contracts. While this award indicates they were selected, it doesn't detail their success rate, quality of work, or adherence to schedule and budget on previous projects. Information on past performance evaluations, any contract disputes, or awards/recognitions would provide a clearer picture of their reliability and expertise in ammunition demilitarization. Without this specific data, we rely on the competitive process and the government's due diligence during contractor selection to infer capability.

How does the $26.5 million contract value compare to other ammunition demilitarization contracts awarded by the DoD?

Benchmarking the $26.5 million contract value requires comparing it against similar ammunition demilitarization contracts, considering factors like the volume and type of ammunition, the specific demilitarization processes required, and the contract duration. Contracts for demilitarizing large quantities of complex munitions, or those involving extensive environmental remediation, would naturally be higher. Conversely, contracts for simpler munitions or shorter durations would be lower. The fact that three bidders competed suggests the price was likely competitive within the market for the scope of work defined for this particular contract.

What are the primary risks associated with this ammunition demilitarization contract?

The primary risks associated with this contract revolve around the inherent dangers of handling and demilitarizing ammunition. These include potential safety incidents during the process, environmental contamination if waste is not managed properly, and the possibility of contractor non-performance leading to delays in disposal. Given the firm fixed-price nature, there's also a risk that the contractor might cut corners on safety or environmental protocols to maintain profitability, necessitating robust government oversight. The specialized nature of the work also means that finding alternative contractors quickly in case of default could be challenging.

How effective is the demilitarization process in meeting environmental and safety standards?

The effectiveness of the demilitarization process in meeting environmental and safety standards is contingent upon the contractor's adherence to strict protocols and the government's oversight. Ammunition contains potentially hazardous materials, and improper handling can lead to soil and water contamination, as well as risks to personnel. Successful demilitarization requires specialized equipment and trained personnel. The government's role includes setting clear performance standards, conducting regular inspections, and ensuring the contractor possesses the necessary certifications and follows best practices for waste disposal and environmental protection.

What has been the historical spending trend for ammunition demilitarization within the Department of the Army?

Analyzing historical spending trends for ammunition demilitarization within the Department of the Army would reveal the consistency and scale of this requirement over time. Significant fluctuations could indicate changes in military readiness, inventory management strategies, or the introduction of new disposal technologies. Understanding these trends helps in forecasting future needs and budgeting. A consistent spending pattern suggests a stable, ongoing requirement, while sharp increases or decreases might warrant further investigation into the underlying causes, such as major demilitarization initiatives or shifts in policy.

What specific types of ammunition are covered under this contract, and does this impact the cost?

The specific types of ammunition covered under this contract are crucial for understanding the cost and complexity of the demilitarization process. Different types of munitions (e.g., small arms, artillery shells, missiles) require distinct handling, dismantling, and disposal methods. Ammunition with hazardous components, propellants, or explosives may incur higher costs due to specialized safety precautions and environmental controls. Without a detailed breakdown of the ammunition types, it's difficult to definitively benchmark the $26.5 million value, but it is reasonable to assume the scope included a range of materials requiring varied demilitarization techniques.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: DAY & Zimmermann Group Inc., the (UEI: 007913486)

Address: 2 S MAINE AVE, HAWTHORNE, NV, 89415

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,529,267

Exercised Options: $26,529,267

Current Obligation: $26,529,267

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J11D0002

IDV Type: IDC

Timeline