FN America LLC awarded $23.4M for M4/M4A1 carbine delivery orders, with a high unit cost compared to benchmarks
Contract Overview
Contract Amount: $23,376,125 ($23.4M)
Contractor: FN America LLC
Awarding Agency: Department of Defense
Start Date: 2017-08-30
End Date: 2018-09-13
Contract Duration: 379 days
Daily Burn Rate: $61.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DELIVERY ORDER 0005 M4/M4A1 CARBINES
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229
Plain-Language Summary
Department of Defense obligated $23.4 million to FN AMERICA LLC for work described as: DELIVERY ORDER 0005 M4/M4A1 CARBINES Key points: 1. Value for money is questionable due to a significantly higher per-unit cost than comparable contracts. 2. Competition dynamics indicate a full and open process, but the final price may not reflect optimal market value. 3. Risk indicators include potential overspending and the need for closer scrutiny of unit pricing. 4. Performance context shows a short delivery period for these specific orders. 5. Sector positioning places this within the defense manufacturing industry, specifically small arms. 6. The contract type is firm fixed price, offering cost certainty but potentially limiting savings from efficiencies.
Value Assessment
Rating: questionable
The per-unit cost of approximately $70,400 for these carbines is exceptionally high when compared to historical data and industry benchmarks for similar firearms. While this specific order might include specialized configurations or accessories, the significant deviation from typical pricing warrants further investigation into the cost drivers. Without detailed justification for this elevated price, it raises concerns about achieving optimal value for taxpayer dollars.
Cost Per Unit: Approximately $70,400 per unit, significantly above market rates for standard M4/M4A1 carbines.
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. However, the presence of only two bidders (as indicated by 'no': 2) might suggest limited market participation for this specific requirement or solicitation. The high per-unit cost, despite open competition, could imply that the government's requirements or the pricing structure did not incentivize more competitive bids or that the awarded contractor's price was the most advantageous among the limited pool.
Taxpayer Impact: Taxpayers may not have received the best possible price due to the limited number of bidders, even within a full and open competition framework. The high unit cost suggests potential for savings if more competitive pressure had been applied.
Public Impact
The primary beneficiaries are the U.S. Army personnel who will receive M4/M4A1 carbines. Services delivered include the manufacturing and supply of standard issue infantry rifles. Geographic impact is primarily within the United States, with manufacturing likely in South Carolina. Workforce implications include jobs in defense manufacturing and supply chain for FN America LLC.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High per-unit cost raises concerns about value for money.
- Limited number of bidders in a full and open competition may indicate market issues or specific requirements.
- Firm fixed price contract could lead to higher costs if efficiencies are not realized by the contractor.
Positive Signals
- Awarded under full and open competition, adhering to procurement best practices.
- FN America LLC is an established defense contractor with experience in firearms manufacturing.
- Firm fixed price contract provides cost certainty for the government.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on small arms manufacturing. The market for military firearms is characterized by specialized production, stringent quality control, and long-term government contracts. Spending in this area is driven by military readiness requirements and modernization programs. Comparable spending benchmarks would typically involve other large-scale procurements of individual infantry weapons systems.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses within the provided data. This suggests that the primary contract is awarded to a large business, and the direct impact on the small business ecosystem may be limited unless FN America LLC voluntarily engages small businesses in its supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting command and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the firm fixed price contract type, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though detailed cost breakdowns are often proprietary. The specific oversight mechanisms for this delivery order would be detailed in the overarching contract.
Related Government Programs
- M4 Carbine Procurement
- Small Arms Manufacturing Contracts
- Department of the Army Weapons Systems
- Defense Logistics Agency (DLA) Armament Contracts
Risk Flags
- High Unit Cost
- Limited Competition
- Potential for Overpayment
Tags
defense, department-of-the-army, fn-america-llc, m4-carbine, m4a1-carbine, small-arms, firm-fixed-price, full-and-open-competition, delivery-order, south-carolina, manufacturing, ordnance
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.4 million to FN AMERICA LLC. DELIVERY ORDER 0005 M4/M4A1 CARBINES
Who is the contractor on this award?
The obligated recipient is FN AMERICA LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $23.4 million.
What is the period of performance?
Start: 2017-08-30. End: 2018-09-13.
What is the historical spending trend for M4/M4A1 carbines by the Department of the Army?
Historical spending on M4/M4A1 carbines by the Department of the Army has been substantial over the past two decades, reflecting their role as the standard infantry rifle. Annual spending can fluctuate based on end-strength, combat deployments, and modernization initiatives. For instance, significant procurement occurred during the height of operations in Iraq and Afghanistan. More recent years may see lower volumes as the Army focuses on sustainment and potential future replacements. Analyzing specific contract awards over time, like this $23.4 million delivery order, reveals patterns in unit pricing, competition levels, and contractor performance, which are crucial for understanding long-term cost trends and value.
How does the per-unit cost of this contract compare to other recent M4/M4A1 procurements?
The per-unit cost of approximately $70,400 for this specific delivery order is exceptionally high when compared to typical M4/M4A1 carbine procurements. Historically, unit costs for standard M4/M4A1 rifles procured through competitive bidding have ranged significantly lower, often between $700 and $1,500, depending on the configuration, included accessories, and the specific contract terms. Even considering potential inflation or specialized variants, a cost of $70,400 per unit suggests either a substantial misunderstanding of the data provided, or that this order includes extensive, non-standard components, services, or perhaps represents a bundled package far exceeding the cost of the rifle itself. Further investigation into the specific line items and justification for this price is warranted.
What are the key risks associated with this contract award?
The primary risk associated with this contract award is the potential for poor value for money due to the exceptionally high per-unit cost. If this price is not justified by unique requirements or exceptional circumstances, it represents a significant overpayment compared to market benchmarks. Another risk stems from the limited competition, with only two bidders participating in a full and open process, which could indicate issues with the solicitation, market dynamics, or contractor pre-qualification that may have hindered broader participation and price discovery. Finally, reliance on a firm fixed price contract, while offering cost certainty, means that if the contractor encounters unforeseen cost efficiencies, the government may not benefit from those savings.
What is FN America LLC's track record with M4/M4A1 contracts?
FN America LLC has a well-established track record as a primary manufacturer and supplier of M4 and M4A1 carbines to the U.S. military. They have been a key contractor for these platforms for many years, often holding significant portions of the overall military requirement. Their history includes numerous large-scale delivery orders and contract awards for these rifles. While their production capacity and quality are generally recognized, as with any large defense contractor, specific contract performance, including pricing and delivery timelines, can vary. Analyzing past contracts with FN America for similar weapon systems can provide further context on their pricing structures and reliability.
What does the 'SC' status code signify in this contract data?
The 'SC' status code in this contract data likely refers to the place of performance or the location of the contractor. In this context, 'SC' most commonly stands for South Carolina, indicating that the contractor, FN America LLC, has operations or is headquartered in South Carolina, and that is where the work for this delivery order is being performed. This information is relevant for understanding the geographic distribution of defense spending and its economic impact on specific states. It does not directly relate to the contract type, competition, or pricing, but rather to the logistical and administrative aspects of the award.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Product/Service Code: WEAPONS
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: Wespavia SA
Address: 797 OLD CLEMSON RD, COLUMBIA, SC, 29229
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,376,125
Exercised Options: $23,376,125
Current Obligation: $23,376,125
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN15D0072
IDV Type: IDC
Timeline
Start Date: 2017-08-30
Current End Date: 2018-09-13
Potential End Date: 2018-09-13 12:09:00
Last Modified: 2022-04-08
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