DoD awards $39.3M contract for ammunition manufacturing to General Dynamics, facing limited competition

Contract Overview

Contract Amount: $39,281,768 ($39.3M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-08-30

End Date: 2017-12-31

Contract Duration: 488 days

Daily Burn Rate: $80.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK82-1, NSN: 1325-00-585-3841; MK82-6, NSN: 1325-01-559-1663; MK84-10, NSN: 1325-01-548-1296

Place of Performance

Location: GARLAND, DALLAS County, TEXAS, 75040

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $39.3 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: MK82-1, NSN: 1325-00-585-3841; MK82-6, NSN: 1325-01-559-1663; MK84-10, NSN: 1325-01-548-1296 Key points: 1. Contract awarded to a single, established defense contractor, indicating potential for reduced competition and potentially higher prices. 2. The contract's value is significant, suggesting a substantial need for these specific ammunition types within the Army. 3. Limited competition raises questions about whether the government secured the best possible pricing and value. 4. The fixed-price contract type shifts some risk to the contractor, but oversight is crucial to ensure performance. 5. The contract duration of 488 days suggests a focused, short-to-medium term need for the specified munitions. 6. The award falls within the Ammunition (except Small Arms) Manufacturing sector, a critical component of defense readiness.

Value Assessment

Rating: fair

The contract value of $39.3 million for ammunition manufacturing appears substantial. Without specific per-unit cost data or benchmarks for comparable ammunition types, it is difficult to definitively assess value for money. However, the 'NOT COMPETED' status suggests a lack of competitive pressure that could have driven down costs. Further analysis would require comparing unit prices to historical contracts for similar munitions or to industry benchmarks if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of multiple bidders means there was no direct price comparison or negotiation leverage derived from a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government may not benefit from the cost savings typically achieved through a competitive bidding process.

Public Impact

The primary beneficiaries are the U.S. Army, which receives critical ammunition supplies for its operations. The contract ensures the delivery of specific types of ammunition, contributing to military readiness and operational capability. The manufacturing will likely occur in Texas, potentially supporting the local economy and workforce in that region. This contract supports the defense industrial base, ensuring the continued production of essential munitions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for the government.
Sole-source awards can reduce transparency and accountability in the procurement process.
Reliance on a single contractor could create supply chain vulnerabilities if that contractor faces production issues.

Positive Signals

Award to an established contractor like General Dynamics suggests a high likelihood of successful delivery.
The firm fixed-price contract type provides cost certainty for the government once awarded.
The contract specifies delivery orders, allowing for phased delivery and management of munitions.

Sector Analysis

The contract falls under the Ammunition (except Small Arms) Manufacturing industry, a specialized segment of the defense sector. This industry is characterized by high barriers to entry due to stringent quality control, security requirements, and specialized manufacturing processes. General Dynamics is a major player in this market. Comparable spending benchmarks would typically involve analyzing other large-volume ammunition procurements by the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information provided regarding subcontracting plans for small businesses. This suggests that the primary contract is likely to be performed by the large prime contractor, with limited direct opportunities for small businesses unless they are part of General Dynamics' existing supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The firm fixed-price nature of the contract implies that the government's primary oversight will focus on ensuring delivery of the correct quantity and quality of ammunition according to the contract specifications. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Ordnance Programs
Defense Industrial Base Support
General Dynamics Contracts

Risk Flags

Sole-source award limits price competition.
Lack of small business subcontracting details.
No specific performance metrics provided in summary.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.3 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. MK82-1, NSN: 1325-00-585-3841; MK82-6, NSN: 1325-01-559-1663; MK84-10, NSN: 1325-01-548-1296

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 $39.3 million.

What is the period of performance?

Start: 2016-08-30. End: 2017-12-31.

What is the specific type and quantity of ammunition being procured under this contract?

The provided data indicates the contract is for ammunition manufacturing, referencing specific munition types like MK82 and MK84 with associated NSNs (National Stock Numbers). However, the exact quantities for each specific munition type are not detailed in the summary data. The contract value of $39.3 million and the duration suggest a significant volume, but a precise breakdown would require accessing the full contract details. The NSNs provided are: MK82-1 (1325-00-585-3841), MK82-6 (1325-01-559-1663), and MK84-10 (1325-01-548-1296). These are bombs, specifically general-purpose bombs.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED'. While the specific justification for this sole-source award is not provided in the summary, common reasons include the existence of only one responsible source capable of meeting the requirement, urgent and compelling needs where competition is not feasible, or specific technical requirements that only one contractor can fulfill. Without further documentation, the precise rationale remains unclear, but it implies that the Army determined that soliciting bids from multiple vendors was not practical or necessary in this instance.

How does the awarded amount of $39.3 million compare to historical spending on similar ammunition types?

Comparing the $39.3 million award to historical spending requires access to historical contract data for the specific munition types (MK82, MK84 bombs) procured by the Department of the Army. General Dynamics Ordnance and Tactical Systems is a known supplier, so examining their past contracts for similar items would be relevant. Without that comparative data, it's difficult to ascertain if this award represents an increase, decrease, or is in line with previous procurement costs. The fact that it was sole-sourced might suggest it's not directly comparable to previously competed contracts.

What are the potential risks associated with awarding a contract of this size to a single supplier?

Awarding a contract of $39.3 million to a single supplier, especially on a sole-source basis, carries several risks. Firstly, there's the risk of paying a premium due to the lack of competitive pricing pressure. Secondly, it creates a dependency on that specific contractor, potentially leading to supply chain vulnerabilities if the contractor experiences production delays, quality issues, or financial instability. Lastly, it reduces the government's leverage in future negotiations if this contractor becomes the de facto sole provider for these munitions.

What is General Dynamics Ordnance and Tactical Systems' track record with the Department of Defense for similar contracts?

General Dynamics Ordnance and Tactical Systems, Inc. is a well-established defense contractor with a significant history of supplying munitions and ordnance to the U.S. military. They are known for producing a wide range of ammunition types. While this specific data does not detail their past performance on these exact munition types, their position as a major supplier suggests a generally reliable track record. However, a comprehensive assessment would involve reviewing past performance evaluations and any documented issues on previous contracts.

What is the significance of the contract being 'FIRM FIXED PRICE'?

A 'FIRM FIXED PRICE' (FFP) contract type means that the contractor agrees to a total price for a well-defined product or service. The contractor bears the primary responsibility for all costs incurred and profits or losses realized. For the government, this provides the highest level of cost certainty, as the price will not change unless the contract scope is formally modified. This shifts the risk of cost overruns from the government to the contractor, making it a preferred contract type when requirements are clearly defined and risks are manageable.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 1200 N GLENBROOK DR, GARLAND, TX, 75040

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

Financial Breakdown

Contract Ceiling: $39,281,768

Exercised Options: $39,281,768

Current Obligation: $39,281,768

Contract Characteristics

Multi-Year Contract: Yes

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J13D0050

IDV Type: IDC

Timeline