Department of the Army awards $26.4M for ammunition manufacturing, with 2 bidders competing

Contract Overview

Contract Amount: $26,427,129 ($26.4M)

Contractor: Global Military Products Inc

Awarding Agency: Department of Defense

Start Date: 2014-06-26

End Date: 2015-03-08

Contract Duration: 255 days

Daily Burn Rate: $103.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER COMPETITION 006 - CLINS 007,008,0045,0046,0067,0070,0073,0075,0083,0084.

Place of Performance

Location: PERRY, TAYLOR County, FLORIDA, 32348

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to GLOBAL MILITARY PRODUCTS INC for work described as: DELIVERY ORDER COMPETITION 006 - CLINS 007,008,0045,0046,0067,0070,0073,0075,0083,0084. Key points: 1. Value for money appears fair given the competitive nature of the award. 2. The contract was competed under full and open competition, indicating a healthy market. 3. Risk indicators are moderate, with a fixed-price contract type mitigating cost overruns. 4. Performance context is limited to ammunition manufacturing, a specific defense need. 5. Sector positioning is within defense manufacturing, a critical area for military readiness.

Value Assessment

Rating: fair

The contract value of $26.4 million for ammunition manufacturing appears within a reasonable range for defense procurement. Benchmarking against similar contracts for ammunition production is challenging without more specific details on the type and quantity of ammunition. However, the presence of two bidders suggests some level of price discovery and potential for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with two bidders participating. This level of competition is generally positive, suggesting that multiple capable suppliers were aware of and able to bid on the requirement. The presence of two bidders provides a basis for price comparison and negotiation, though a higher number of bidders could potentially drive prices lower.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the best possible price for the required ammunition. While two bidders are better than one, further analysis could explore if the market could support more participants to ensure maximum cost savings.

Public Impact

The primary beneficiaries are the Department of the Army and its operational forces, who will receive essential ammunition. The service delivered is the manufacturing of ammunition, crucial for military training and combat readiness. The geographic impact is primarily in Florida, where the contractor GLOBAL MILITARY PRODUCTS INC is located. Workforce implications include employment at the contractor's facility in Florida, supporting the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bidders could potentially lead to higher prices than a more robustly competed contract.
The fixed-price contract type, while mitigating cost overruns for the government, could expose the contractor to financial risk if material or labor costs increase unexpectedly.

Positive Signals

Awarded under full and open competition, indicating a broad market search.
The contract is for a critical defense commodity (ammunition), ensuring supply chain continuity for the military.
The contractor is based in Florida, potentially supporting regional economic activity and defense manufacturing capabilities.

Sector Analysis

The defense manufacturing sector is characterized by specialized production capabilities and stringent quality requirements. Ammunition manufacturing, specifically, is a critical component of national defense, with a limited number of specialized producers. Spending in this area is driven by military readiness needs and geopolitical factors. Comparable spending benchmarks would typically involve analyzing other contracts for similar types and quantities of ammunition awarded by various branches of the U.S. military.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to GLOBAL MILITARY PRODUCTS INC, a larger entity, suggests that the primary focus was on securing the required ammunition manufacturing capabilities rather than specifically promoting small business participation in this instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would include adherence to contract terms, delivery schedules, and quality specifications. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Support Contracts
Defense Industrial Base Manufacturing

Risk Flags

Limited Competition
Potential for Price Escalation
Supply Chain Vulnerability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to GLOBAL MILITARY PRODUCTS INC. DELIVERY ORDER COMPETITION 006 - CLINS 007,008,0045,0046,0067,0070,0073,0075,0083,0084.

Who is the contractor on this award?

The obligated recipient is GLOBAL MILITARY PRODUCTS 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 $26.4 million.

What is the period of performance?

Start: 2014-06-26. End: 2015-03-08.

What is the track record of GLOBAL MILITARY PRODUCTS INC with the Department of Defense?

GLOBAL MILITARY PRODUCTS INC has a history of contracts with the Department of Defense, primarily related to the manufacturing and supply of various ordnance and ammunition. While this specific award is for $26.4 million, their broader contract portfolio would need to be examined to fully assess their track record. Key performance indicators from past contracts, such as on-time delivery, quality compliance, and cost performance, would be crucial for a comprehensive evaluation. Analyzing past contract modifications, disputes, or terminations would also provide insights into their reliability and performance history. Without access to detailed historical performance data, it's difficult to definitively characterize their overall track record beyond their participation in the defense supply chain.

How does the awarded price compare to market rates for similar ammunition?

Directly comparing the awarded price of $26.4 million to precise market rates for similar ammunition is challenging without knowing the exact specifications, quantity, and type of ammunition procured under this contract. Ammunition costs vary significantly based on caliber, explosive fill, casing material, and production volume. However, the fact that the contract was awarded under full and open competition with two bidders suggests that the price achieved reflects some level of market negotiation. To benchmark effectively, one would need to identify comparable contracts awarded by the DoD or other government agencies for identical or highly similar ammunition types, considering factors like contract date, quantity, and competition level. The absence of a per-unit cost benchmark in the provided data limits a granular price comparison.

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

The primary risks associated with this ammunition manufacturing contract include potential supply chain disruptions for raw materials, fluctuations in the cost of those materials, and the contractor's ability to meet stringent quality and safety standards. Given that it's a fixed-price contract, there's a risk of cost overruns for the contractor if material prices spike or production issues arise, which could impact their financial stability or willingness to bid on future contracts. For the government, the main risks are delays in delivery or substandard quality, which could impact military readiness. The limited competition (two bidders) also presents a risk of reduced price competitiveness over the long term if the market doesn't encourage more participants.

How effective is the Department of the Army in procuring ammunition through competitive bidding?

The Department of the Army generally employs competitive bidding processes for ammunition procurement, aiming to achieve value for money and ensure supply chain resilience. The effectiveness can be gauged by the number of bidders, the competitiveness of the pricing, and the reliability of the awarded contractors. This specific contract, awarded under full and open competition with two bidders, indicates a degree of effectiveness in reaching the market. However, the overall effectiveness is a broader question that requires analyzing trends across numerous ammunition procurements, including instances where competition might be lower due to specialized requirements or a limited industrial base. Continuous evaluation of market dynamics and procurement strategies is necessary to maintain and enhance effectiveness.

What are the historical spending patterns for ammunition manufacturing by the Department of the Army?

Historical spending patterns for ammunition manufacturing by the Department of the Army are substantial and fluctuate based on global security needs, operational tempo, and strategic modernization efforts. The Army procures a wide array of ammunition types, from small arms rounds to large-caliber artillery shells and missiles. Spending is often concentrated with a few key defense contractors possessing specialized manufacturing capabilities. Trends may show increased spending during periods of active conflict or heightened geopolitical tension, and potentially shifts towards advanced or next-generation munitions as technology evolves. Analyzing historical data reveals consistent, significant investment in maintaining and replenishing ammunition stockpiles, underscoring its critical role in defense readiness.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chemring Group PLC (UEI: 216244954)

Address: 10625 PUCKETT ROAD, PERRY, FL, 02

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: $26,427,129

Exercised Options: $26,427,129

Current Obligation: $26,427,129

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J12D0084

IDV Type: IDC

Timeline