DoD's $27.7M contract for metal parts awarded to General Dynamics, with a 548-day duration

Contract Overview

Contract Amount: $27,757,644 ($27.8M)

Contractor: General Dynamics Ordnance and Tactical Systems Inc

Awarding Agency: Department of Defense

Start Date: 2016-09-28

End Date: 2018-03-30

Contract Duration: 548 days

Daily Burn Rate: $50.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: M795 METAL PARTS

Place of Performance

Location: SCRANTON, LACKAWANNA County, PENNSYLVANIA, 18505

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $27.8 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC for work described as: M795 METAL PARTS Key points: 1. The contract value of $27.7 million represents a significant investment in ammunition manufacturing. 2. General Dynamics, a major defense contractor, secured this award, indicating established capabilities. 3. The contract type, Fixed Price with Economic Price Adjustment, suggests potential for cost fluctuations. 4. Awarded by the Department of the Army, this contract supports critical defense readiness. 5. The North American Industry Classification System (NAICS) code 332993 points to specialized metal parts manufacturing. 6. The contract duration of 548 days indicates a medium-term supply requirement. 7. The contract was awarded under Full and Open Competition after Exclusion of Sources, suggesting a competitive process with specific justifications. 8. The awarded amount is substantial within the context of ammunition components.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract for metal parts is challenging without more granular data on the exact components and their market prices. However, the $27.7 million award over approximately 1.5 years suggests a substantial procurement. The fixed-price with economic price adjustment (FP-EPA) contract type introduces a degree of risk for the government, as costs could increase due to economic factors, though it also allows for price adjustments to reflect market realities. Comparing this to similar large-scale ammunition component contracts would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition after Exclusion of Sources.' This designation implies that while the competition was intended to be open, certain sources were excluded, likely due to specific technical requirements, security clearances, or existing relationships that made them uniquely qualified or necessary for this particular procurement. The number of bidders is not explicitly stated, but the 'exclusion of sources' suggests a potentially narrower field than a truly unrestricted full and open competition. This could impact price discovery, potentially leading to higher prices than if a broader range of competitors were involved.

Taxpayer Impact: For taxpayers, this means that while competition was sought, the exclusion of certain sources might have limited the potential for the lowest possible price. The justification for exclusion would be key to understanding if this was a necessary trade-off for specialized capabilities or if it represented a missed opportunity for greater cost savings.

Public Impact

The primary beneficiaries are the U.S. Army, receiving critical ammunition components to support military operations and readiness. The contract delivers specialized metal parts essential for the manufacturing of ammunition, ensuring supply chain continuity. The geographic impact is primarily within Pennsylvania, where General Dynamics Ordnance and Tactical Systems Inc. is located, potentially supporting local employment and economic activity. The workforce implications include skilled manufacturing jobs related to metal fabrication and defense production at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Fixed Price with Economic Price Adjustment' (FP-EPA) contract type introduces potential for cost increases due to market fluctuations, impacting budget predictability.
The 'Full and Open Competition after Exclusion of Sources' indicates a potentially limited competitive landscape, which could affect price competitiveness.
Reliance on a single large contractor, General Dynamics, for critical components could pose supply chain risks if disruptions occur.

Positive Signals

Award to a well-established defense contractor like General Dynamics suggests a high likelihood of meeting technical specifications and delivery schedules.
The contract duration of 548 days indicates a sustained need and commitment, providing stability for the supplier and ensuring long-term supply.
The Department of the Army's procurement signifies a direct contribution to national defense capabilities.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of ammunition components. The market for such specialized metal parts is often characterized by high barriers to entry due to stringent quality control, security requirements, and the need for specialized manufacturing capabilities. General Dynamics Ordnance and Tactical Systems Inc. is a significant player in this niche. Comparable spending benchmarks would likely involve other large-scale defense contracts for munitions or their constituent parts, where values can range from millions to billions of dollars depending on the scale and complexity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, General Dynamics, is a large corporation. While there is no direct indication of subcontracting to small businesses within the provided data, large defense contracts often include provisions for small business participation. The absence of a specific set-aside suggests that the primary focus was on securing the required components from a capable prime contractor, rather than specifically targeting small business awards for this particular procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, with penalties or incentives potentially tied to performance and delivery. Transparency is facilitated through contract databases like FPDS-NG, which provide public access to contract details. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Ammunition Procurement
Defense Manufacturing
Ordnance Systems
Metal Fabrication Services
Department of Defense Contracts
Army Supply Chain Management

Risk Flags

Potential for cost overruns due to Economic Price Adjustment clause.
Limited competition due to exclusion of sources may impact price.
Reliance on a single large contractor for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.8 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC. M795 METAL PARTS

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 $27.8 million.

What is the period of performance?

Start: 2016-09-28. End: 2018-03-30.

What is the historical spending pattern for similar metal parts contracts awarded by the Department of the Army?

Analyzing historical spending for similar metal parts contracts by the Department of the Army requires accessing and processing extensive procurement data. Generally, the Army procures a wide array of metal components for various systems, including but not limited to, ammunition. Spending patterns can fluctuate significantly year-over-year based on strategic priorities, operational tempo, and budget allocations. Contracts for ammunition components, like the one awarded to General Dynamics, are often awarded through competitive processes, though the specific type of competition can vary. Fixed-price contracts are common, but the inclusion of economic price adjustment clauses indicates a recognition of potential material cost volatility. Historical data would reveal trends in contract values, durations, and the prevalence of different contract types for similar items, providing context for the $27.7 million award.

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

Determining the precise 'market rate' for specialized ammunition components is complex due to the proprietary nature of many designs and the stringent quality requirements. The $27.7 million contract value for General Dynamics Ordnance and Tactical Systems Inc. is for 'M795 METAL PARTS,' likely referring to components for 155mm artillery shells. Without access to detailed cost breakdowns or specific component specifications, a direct price-to-market comparison is difficult. However, the fact that it was awarded under 'Full and Open Competition after Exclusion of Sources' suggests that while competition existed, it was within a defined set of qualified bidders. This implies that the price achieved reflects the capabilities and costs of these specialized manufacturers. Benchmarking against publicly available data for similar defense components, adjusted for quantity and specifications, would be necessary for a more robust comparison, but such data is often not readily accessible.

What are the specific risks associated with the 'Fixed Price with Economic Price Adjustment' contract type for this procurement?

The 'Fixed Price with Economic Price Adjustment' (FP-EPA) contract type introduces specific risks for the government, primarily related to cost predictability. While the base price is fixed, the 'economic price adjustment' clause allows for upward (and sometimes downward) adjustments based on fluctuations in specified economic factors, such as labor rates, material costs, or other indices. For this $27.7 million contract for metal parts, the primary risk is that the cost of raw materials (metals) or labor could increase significantly during the 548-day performance period, leading to a higher final contract cost than initially budgeted. This erodes the cost certainty typically associated with fixed-price contracts. The government must carefully monitor the economic indicators tied to the adjustment clause and ensure that the adjustments are justified and accurately calculated according to the contract terms to mitigate potential overspending.

What is General Dynamics' track record in fulfilling similar defense manufacturing contracts?

General Dynamics, through its various subsidiaries including Ordnance and Tactical Systems Inc., has a long and extensive track record in fulfilling defense manufacturing contracts. They are a major prime contractor for the U.S. Department of Defense and allied nations, producing a wide range of munitions, armored vehicles, and other defense systems. Their experience encompasses complex manufacturing processes, stringent quality control, and large-scale production. For ammunition components specifically, General Dynamics is known for its capabilities in producing artillery shells, mortar rounds, and related energetic materials. While specific performance metrics for every contract are not always public, their continued success in securing large-value contracts from the DoD indicates a generally strong performance history in terms of meeting technical requirements, delivery schedules, and quality standards. However, like any large contractor, past performance reviews and specific contract histories would need to be examined for a complete picture.

What does the 'Exclusion of Sources' in the competition type imply for the contractor selection process?

The 'Full and Open Competition after Exclusion of Sources' designation implies a nuanced approach to competition. It means that the solicitation was initially intended to be open to all responsible sources, but specific sources were subsequently excluded. This exclusion is typically based on well-defined criteria, such as unique technical capabilities, proprietary technology, specific security clearances, or the need for compatibility with existing systems that only certain contractors can meet. For the selected contractor, General Dynamics, it suggests they possessed the specific qualifications or fulfilled the criteria that led to their selection over other potential bidders who may have been excluded. This process aims to balance the benefits of competition with the necessity of acquiring highly specialized or critical components from entities demonstrably capable of meeting stringent requirements, potentially justifying a higher price point than might be achieved in a completely 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: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corporation

Address: 156 CEDAR AVE, SCRANTON, PA, 18505

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: $27,757,644

Exercised Options: $27,757,644

Current Obligation: $27,757,644

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN15D0016

IDV Type: IDC

Timeline