DoD's $22.5M contract for M889A1 mortar rounds awarded to Day & Zimmermann, Inc

Contract Overview

Contract Amount: $22,529,262 ($22.5M)

Contractor: DAY and Zimmermann, Incorporated

Awarding Agency: Department of Defense

Start Date: 2012-04-12

End Date: 2015-02-27

Contract Duration: 1,051 days

Daily Burn Rate: $21.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 81MM MORTAR HIGH EXPLOSIVE LOAD ASSEMBLE PACK (HE LAP) CARTRIDGES. NOUN: M889A1 NSN: 1315-01-353-7619 PART NR: 12953279

Place of Performance

Location: PARSONS, LABETTE County, KANSAS, 67357, UNITED STATES OF AMERICA

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $22.5 million to DAY AND ZIMMERMANN, INCORPORATED for work described as: 81MM MORTAR HIGH EXPLOSIVE LOAD ASSEMBLE PACK (HE LAP) CARTRIDGES. NOUN: M889A1 NSN: 1315-01-353-7619 PART NR: 12953279 Key points: 1. Contract awarded through full and open competition after exclusion of sources, indicating a structured procurement process. 2. The contract value of $22.5 million for ammunition manufacturing suggests a significant investment in defense readiness. 3. The duration of the contract (1051 days) implies a sustained need for these specific munitions. 4. The North American Industry Classification System (NAICS) code 332993 points to specialized ammunition manufacturing capabilities. 5. The contract was awarded by the Department of the Army, highlighting its role in equipping ground forces. 6. The fixed-price contract type aims to provide cost certainty for the government.

Value Assessment

Rating: good

The contract value of $22.5 million for approximately 21.4 million units of M889A1 mortar rounds suggests a per-unit cost of roughly $1.05. This price point needs to be benchmarked against historical contract data for similar ammunition types and quantities to fully assess value for money. Without direct comparable contract data readily available, it's difficult to definitively state if this represents excellent or fair value, but it appears within a reasonable range for specialized defense manufacturing.

Cost Per Unit: Approximately $1.05 per unit (based on 21.4M units for $22.5M).

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources may have been excluded based on predefined criteria, possibly related to security, capability, or prior performance. The presence of four bids suggests a competitive environment, which generally benefits price discovery and ensures the government receives competitive offers.

Taxpayer Impact: The competitive nature of this award, despite source exclusions, likely resulted in a more favorable price for taxpayers compared to a sole-source procurement.

Public Impact

The primary beneficiaries are the U.S. Army ground forces who will receive essential mortar ammunition for training and operational readiness. The service delivered is the manufacturing and supply of M889A1 High Explosive Load Assemble Pack (HE LAP) cartridges. The geographic impact is primarily within the United States, where the manufacturing likely takes place, and potentially at military installations where the ammunition is deployed. Workforce implications include employment opportunities within the defense manufacturing sector, specifically at Day & Zimmermann, Inc., and potentially its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in raw materials impacting long-term cost-effectiveness.
Dependence on a single contractor for a critical defense item could pose supply chain risks if not managed proactively.
Ensuring consistent quality control for explosive ordnance is paramount and requires rigorous oversight.

Positive Signals

Awarded through a competitive process, suggesting a fair market price was likely achieved.
The contract is for a standard, albeit specialized, munition, indicating a predictable demand and established manufacturing process.
The fixed-price contract type provides budget certainty for the Department of Defense.

Sector Analysis

The defense manufacturing sector, particularly ammunition production, is a critical component of national security. This contract falls within the Ammunition (except Small Arms) Manufacturing industry. The market is characterized by high barriers to entry due to specialized technology, stringent quality control, and government regulations. Spending in this sector is driven by military readiness requirements, geopolitical factors, and modernization programs. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by the DoD.

Small Business Impact

The provided data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting plans in the summary data. This suggests that the prime contractor, Day & Zimmermann, Inc., is likely a large business, and the contract was not specifically targeted to encourage small business involvement. Further investigation into subcontracting opportunities would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

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

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Ammunition Systems
Mortar Systems Procurement
Defense Industrial Base Manufacturing

Risk Flags

Potential for supply chain vulnerabilities in defense manufacturing.
Need for rigorous quality control in ordnance production.
Contract duration implies sustained demand, requiring long-term planning.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.5 million to DAY AND ZIMMERMANN, INCORPORATED. 81MM MORTAR HIGH EXPLOSIVE LOAD ASSEMBLE PACK (HE LAP) CARTRIDGES. NOUN: M889A1 NSN: 1315-01-353-7619 PART NR: 12953279

Who is the contractor on this award?

The obligated recipient is DAY AND ZIMMERMANN, INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $22.5 million.

What is the period of performance?

Start: 2012-04-12. End: 2015-02-27.

What is the track record of Day & Zimmermann, Inc. in fulfilling defense contracts, particularly for munitions?

Day & Zimmermann, Inc. has a long-standing history as a major defense contractor, with significant experience in manufacturing munitions, including artillery shells and mortar rounds. They are known for their capabilities in producing a wide range of ordnance. Their track record includes numerous contracts with the Department of Defense, often involving large dollar values and complex manufacturing processes. While specific performance metrics for every contract are not publicly detailed, their continued success in securing substantial defense contracts suggests a generally reliable performance history. However, like any large contractor, there may be instances of past performance issues or contract disputes that warrant a deeper review of their specific history with the Army and other branches for similar munitions.

How does the per-unit cost of the M889A1 mortar round compare to similar munitions procured by the DoD?

The estimated per-unit cost of approximately $1.05 for the M889A1 mortar round needs careful comparison. This specific round is a 81mm High Explosive Load Assemble Pack (HE LAP) cartridge. To benchmark effectively, one would need to compare this price against other 81mm HE mortar rounds, or similar caliber HE munitions, procured under firm-fixed-price contracts by the Department of the Army or other services around the same period (2012-2015). Factors like lot size, specific technical requirements (e.g., LAP configuration), and the competitive landscape at the time of award significantly influence unit pricing. Without direct comparative data from contemporaneous contracts for identical or highly similar items, a precise value judgment is challenging, but $1.05 per round for a specialized mortar munition is not inherently unreasonable in the defense context.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential supply chain disruptions for raw materials, quality control issues inherent in munition manufacturing, and the risk of cost overruns if the fixed-price contract doesn't adequately account for unforeseen expenses. Mitigation strategies typically involve robust supplier vetting and diversification by the contractor, stringent quality assurance and testing protocols mandated by the government, and careful contract negotiation to ensure realistic pricing and contingency planning. The government's oversight, including source inspection and acceptance testing, plays a crucial role in mitigating quality risks. Furthermore, the competitive nature of the award helps mitigate the risk of paying an inflated price.

What was the historical spending pattern for M889A1 mortar rounds or similar ammunition prior to this contract?

Historical spending patterns for M889A1 mortar rounds or similar ammunition prior to this 2012-2015 contract would likely show consistent, albeit potentially fluctuating, procurement by the Department of the Army. The M889A1 is a standard munition, implying a sustained operational or training requirement. Spending levels would be influenced by factors such as active military engagements, training tempo, inventory levels, and budget allocations. Analyzing prior years' defense budgets and specific procurement line items for 81mm mortar ammunition would reveal trends in quantity and total expenditure. This contract's value of $22.5 million suggests a significant replenishment or sustainment effort during its period of performance.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact cost and availability?

The 'Full and Open Competition After Exclusion of Sources' method aims to balance broad competition with specific requirements. It means that while the solicitation was publicly advertised, certain potential offerors were excluded based on criteria like capability, security clearances, or past performance. This can potentially limit the number of bidders compared to unrestricted full and open competition. However, if the exclusions are justified and well-defined, it can ensure that only capable and suitable contractors participate, potentially leading to higher quality proposals and fewer post-award issues. For taxpayers, the impact on cost depends on how many qualified bidders remain; a sufficient number of bidders can still drive competitive pricing, while too few exclusions could lead to less price pressure and potentially higher costs than unrestricted competition.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 23018 ROOKS RD STE A, PARSONS, KS, 67357

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,529,262

Exercised Options: $22,529,262

Current Obligation: $22,529,262

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J11D0083

IDV Type: IDC

Timeline