Department of the Army awards $12.5M for M792 production, highlighting small arms ammunition manufacturing needs
Contract Overview
Contract Amount: $12,480,922 ($12.5M)
Contractor: Alliant Ammunition Systems Company, L.L.C.
Awarding Agency: Department of Defense
Start Date: 2008-02-28
End Date: 2010-03-31
Contract Duration: 762 days
Daily Burn Rate: $16.4K/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: OPTION 4- M792 PRODUCTION- DELIVERY ORDER 0004
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $12.5 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C. for work described as: OPTION 4- M792 PRODUCTION- DELIVERY ORDER 0004 Key points: 1. Contract value of $12.5M for M792 production indicates significant investment in specialized ammunition. 2. The contract was awarded under full and open competition, suggesting a competitive market for this type of munition. 3. Delivery order duration of 762 days points to a substantial production run and sustained demand. 4. The contract's focus on Small Arms Ammunition Manufacturing (NAICS 332992) places it within a critical defense supply chain segment. 5. The award to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C. suggests a reliance on established manufacturers for critical defense components. 6. The firm fixed price contract type aims to provide cost certainty for the government.
Value Assessment
Rating: good
The contract value of $12.5 million for M792 production appears reasonable given the specialized nature of ammunition manufacturing and the duration of the delivery order (762 days). Benchmarking against similar contracts for specialized munitions would provide a more precise value-for-money assessment. However, the firm fixed price structure suggests an effort to control costs. Without specific per-unit cost data or comparisons to market rates for similar ammunition types, a definitive value assessment is challenging, but the overall award size aligns with typical defense procurement for such items.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was broad, certain sources may have been excluded based on specific criteria. The number of bidders is not specified, but the 'full and open' designation generally suggests a robust competitive process. This approach aims to ensure the government receives the best possible pricing and quality by allowing a wide range of qualified contractors to participate.
Taxpayer Impact: A competitive award process helps ensure taxpayer dollars are used efficiently by driving down prices and encouraging innovation among defense contractors.
Public Impact
The primary beneficiaries are the Department of the Army and its personnel, who will receive essential M792 ammunition for operational readiness. The services delivered include the production and delivery of a specific type of ammunition, crucial for military operations. The geographic impact is primarily within the United States, where the manufacturing and delivery will likely occur, supporting domestic industrial capacity. Workforce implications include potential job creation or sustained employment within the defense manufacturing sector, specifically in ammunition production.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for supply chain disruptions if the sole awarded contractor faces production issues.
- Reliance on a single delivery order for a critical munition could pose risks if future needs increase significantly.
- The specific nature of M792 ammunition might limit the pool of qualified manufacturers, potentially impacting future competition.
Positive Signals
- Award under full and open competition suggests a healthy market and multiple capable suppliers.
- Firm fixed price contract provides cost predictability for the government.
- The contract duration indicates a stable demand and a commitment to ensuring supply.
Sector Analysis
The defense sector, particularly the segment focused on munition manufacturing, is characterized by high barriers to entry due to specialized technology, stringent quality control, and regulatory requirements. Small arms ammunition is a critical component of military readiness, with significant government spending allocated annually. This contract fits within the broader category of defense procurement for tactical equipment. Comparable spending benchmarks would involve analyzing other contracts for similar calibers or types of ammunition, which often run into millions of dollars depending on quantity and specifications.
Small Business Impact
This contract does not appear to have a small business set-aside (ss=false, sb=false). Therefore, the primary focus is on large-scale production capabilities. There is no explicit information regarding subcontracting plans for small businesses within this specific delivery order. The impact on the small business ecosystem would be indirect, potentially through the prime contractor's own supply chain if they engage small businesses for raw materials or components, but this is not guaranteed.
Oversight & Accountability
Oversight for this contract would primarily fall under 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 goods. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- Department of Defense Ammunition Procurement
- Small Arms Ammunition Manufacturing
- Tactical Munitions Production
- Army Combat Support Equipment
Risk Flags
- Potential for supply chain disruption
- Reliance on specific manufacturing capabilities
- Quality control adherence for munitions
Tags
defense, ammunition-manufacturing, department-of-the-army, firm-fixed-price, delivery-order, full-and-open-competition, small-arms-ammunition, arizona, medium-contract-value
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.5 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C.. OPTION 4- M792 PRODUCTION- DELIVERY ORDER 0004
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 $12.5 million.
What is the period of performance?
Start: 2008-02-28. End: 2010-03-31.
What is the historical spending trend for M792 ammunition by the Department of the Army?
Analyzing historical spending for M792 ammunition requires accessing detailed contract databases over several fiscal years. Without direct access to such granular historical data for this specific munition type, it's challenging to provide precise figures. However, general trends in defense spending indicate consistent investment in ammunition to maintain operational readiness and replace expended stocks. Factors like geopolitical events, training requirements, and modernization programs influence annual procurement volumes and associated costs. The current $12.5 million award suggests a significant, albeit potentially episodic, need for this particular munition, reflecting its importance in the Army's arsenal.
How does the unit cost of the M792 ammunition in this contract compare to industry benchmarks?
Determining the precise unit cost requires dividing the total contract value ($12,480,922) by the number of units produced. This information (the quantity of M792 units) is not provided in the contract data. Therefore, a direct comparison to industry benchmarks or market rates for similar ammunition is not possible with the available details. Ammunition pricing is highly sensitive to factors such as caliber, payload, manufacturing complexity, quantity ordered, and specific performance requirements. Without knowing the quantity, any calculated unit cost would be speculative and potentially misleading.
What are the key performance indicators (KPIs) used to assess the contractor's performance on this delivery order?
Key performance indicators for this contract would likely focus on adherence to the delivery schedule, quality control standards, and compliance with technical specifications for the M792 ammunition. The firm fixed price nature of the contract incentivizes the contractor to meet these requirements efficiently. Performance would be monitored through regular progress reports, quality assurance inspections during production, and final acceptance testing of the delivered munitions. Failure to meet these KPIs could result in penalties, withholding of payment, or contract termination, depending on the severity of the non-compliance.
What is the strategic importance of the M792 ammunition to the Department of the Army?
The M792 designation typically refers to a specific type of ammunition, often a training or specialized round, used in small arms. Its strategic importance lies in its role in enabling realistic training scenarios or fulfilling specific tactical requirements that standard ammunition cannot address. For the Department of the Army, having a reliable supply of such specialized munitions is crucial for maintaining troop proficiency, validating weapon systems, and ensuring operational effectiveness in diverse combat or training environments. The consistent procurement suggests it is a necessary component of the Army's overall ammunition strategy.
Were there any significant risks identified during the pre-award phase for this contract, and how were they mitigated?
The provided data does not detail specific risks identified during the pre-award phase or the mitigation strategies employed. However, for a contract involving munition production, common pre-award risk assessments would typically evaluate the contractor's manufacturing capabilities, quality control systems, financial stability, past performance, and adherence to safety and environmental regulations. Potential risks could include production delays, quality defects, or supply chain vulnerabilities. Mitigation might involve requiring detailed production plans, conducting site visits, verifying certifications, and establishing clear contractual remedies for non-performance.
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
Solicitation ID: W15QKN05R0613
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: $12,480,922
Exercised Options: $12,480,922
Current Obligation: $12,480,922
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN05D0031
IDV Type: IDC
Timeline
Start Date: 2008-02-28
Current End Date: 2010-03-31
Potential End Date: 2010-03-31 00:00:00
Last Modified: 2010-07-23
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