DoD's $52.4M order for 126,810 M795 metal parts to General Dynamics OTS, spanning 2018-2024

Contract Overview

Contract Amount: $52,384,949 ($52.4M)

Contractor: General Dynamics OTS (wilkes Barre), LLC

Awarding Agency: Department of Defense

Start Date: 2018-08-22

End Date: 2024-01-31

Contract Duration: 1,988 days

Daily Burn Rate: $26.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: DELIVERY ORDER 0006 FOR THE PURCHASE OF 126,810 155MM M795 METAL PARTS UNDER ORDERING PERIOD 4.

Place of Performance

Location: WILKES BARRE, LUZERNE County, PENNSYLVANIA, 18702

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $52.4 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC for work described as: DELIVERY ORDER 0006 FOR THE PURCHASE OF 126,810 155MM M795 METAL PARTS UNDER ORDERING PERIOD 4. Key points: 1. Value-for-money assessment pending detailed cost breakdown and economic price adjustment analysis. 2. Competition dynamics indicate a full and open approach, potentially driving competitive pricing. 3. Risk indicators include the long contract duration and fixed-price with economic price adjustment structure. 4. Performance context is tied to the Army's ammunition sustainment needs. 5. Sector positioning within Ammunition Manufacturing (NAICS 332993) is clear.

Value Assessment

Rating: fair

The total award of $52.4 million for 126,810 units of M795 metal parts represents an average unit price of approximately $413.10. Benchmarking this against similar defense manufacturing contracts for ammunition components requires detailed cost breakdowns, including raw material, labor, and overhead. The presence of economic price adjustment clauses introduces variability and necessitates careful monitoring to ensure costs remain reasonable and do not significantly exceed initial estimates due to market fluctuations.

Cost Per Unit: Approximately $413.10 per unit (based on total award and quantity). Further benchmarking requires detailed cost component analysis.

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition after exclusion of sources, suggesting that while the initial solicitation may have had some restrictions, the final award was made through a broad competitive process. The number of bidders is not specified, but the 'full and open' designation generally implies multiple interested parties were able to submit proposals, which is a positive sign for price discovery and market responsiveness.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it encourages multiple vendors to bid, driving down prices and ensuring the government receives competitive offers.

Public Impact

The primary beneficiaries are the U.S. Army, receiving critical components for ammunition production. Services delivered include the manufacturing and supply of 155mm M795 metal parts. Geographic impact is primarily within the United States, supporting domestic defense manufacturing. Workforce implications include employment at General Dynamics OTS facilities and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clauses can lead to cost overruns if not carefully managed.
Long contract duration (1988 days) increases exposure to market volatility and potential obsolescence.
Limited transparency on specific cost breakdowns for the metal parts.

Positive Signals

Awarded through full and open competition, indicating potential for competitive pricing.
Contract supports critical defense materiel needs for the U.S. Army.
General Dynamics OTS is an established defense contractor with relevant manufacturing experience.

Sector Analysis

This contract falls within the Ammunition (except Small Arms) Manufacturing sector (NAICS 332993), a critical segment of the defense industrial base. The market for such components is often characterized by specialized manufacturing capabilities and long-standing relationships with government agencies. Spending in this sector is directly tied to military readiness and operational requirements, with significant government investment to ensure a robust domestic supply chain.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SS: false, SB: false). While General Dynamics OTS is a large business, there may be subcontracting opportunities for small businesses within their supply chain for raw materials or specialized manufacturing processes. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is generally maintained through contract awards databases, though detailed cost breakdowns and performance metrics may be less publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Field Artillery Ammunition
Defense Industrial Base Manufacturing
Fixed-Price with Economic Price Adjustment Contracts

Risk Flags

Economic Price Adjustment Clause
Long Contract Duration
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.4 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC. DELIVERY ORDER 0006 FOR THE PURCHASE OF 126,810 155MM M795 METAL PARTS UNDER ORDERING PERIOD 4.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS OTS (WILKES BARRE), 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 $52.4 million.

What is the period of performance?

Start: 2018-08-22. End: 2024-01-31.

What is the historical spending trend for M795 metal parts or similar ammunition components by the Department of Defense?

Analyzing historical spending for M795 metal parts or comparable ammunition components requires access to detailed procurement data over multiple fiscal years. Generally, spending in this category fluctuates based on operational tempo, inventory levels, and modernization programs. The Department of Defense often awards multi-year contracts or delivery orders to ensure a stable supply chain for critical munitions. Factors such as geopolitical events, budget allocations, and the lifecycle of weapon systems directly influence these spending patterns. Without specific historical data for this exact part, it's challenging to provide precise figures, but sustained investment in artillery ammunition is typical for maintaining military readiness.

How does the unit price of $413.10 for M795 metal parts compare to industry benchmarks or previous contracts?

The unit price of approximately $413.10 for M795 metal parts is a key metric for value assessment. To benchmark this effectively, it needs to be compared against similar contracts awarded by the DoD for the same or comparable components, considering the time of award and any economic adjustments. Factors such as raw material costs (steel, etc.), manufacturing complexity, labor rates in the region of production (Wilkes-Barre, PA), and overhead contribute to the final price. The presence of an Economic Price Adjustment (EPA) clause means this price is subject to change based on documented increases in labor and material costs, making direct comparison to fixed-price contracts difficult without understanding the EPA's impact. A thorough analysis would involve reviewing historical contract awards for this specific part or similar ordnance components.

What are the specific risks associated with the 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type for this ammunition component?

The FPEPA contract type introduces specific risks for both the government and the contractor. For the government, the primary risk is potential cost escalation beyond initial projections if material and labor costs rise significantly. While intended to protect contractors from unforeseen market fluctuations and ensure supply continuity, poorly structured EPAs can lead to higher-than-expected expenditures. The risk lies in the government potentially paying more than anticipated, impacting budget predictability. For the contractor, the risk is mitigated as they are compensated for documented cost increases, but they still bear the risk of managing production efficiently to avoid cost overruns that might not be fully covered by the EPA. Effective oversight and clear definitions within the EPA clause are crucial to manage these risks.

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

General Dynamics Ordnance and Tactical Systems (OTS) has a well-established track record in manufacturing a wide range of defense products, including ammunition and related components. They are a significant supplier to the U.S. military and allied nations. Their experience typically encompasses complex manufacturing processes, stringent quality control, and adherence to demanding delivery schedules. While specific performance metrics for every contract are not always public, their continued role as a prime contractor for the DoD suggests a history of successful contract fulfillment. Past performance evaluations, available through government contract databases or reports, would provide more granular detail on their reliability, quality, and timeliness for similar programs.

What are the implications of the 'Delivery Order' (DO) structure under a larger contract vehicle for this purchase?

This purchase is a Delivery Order (DO) under a larger contract vehicle, likely an Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a Basic Ordering Agreement (BOA). This structure allows the government to procure specific quantities of goods or services over a defined period, providing flexibility. For this specific DO, it means the $52.4 million award is for a defined quantity (126,810 units) with specific delivery dates (ending Jan 31, 2024). The advantage for the government is the ability to order as needed, potentially at pre-negotiated rates. The disadvantage can be less certainty on total spending compared to a firm-fixed-price contract, and the need for careful management of the overall contract ceiling and ordering periods.

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: 2

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 1500 HIGHWAY 315 BLVD, WILKES BARRE, PA, 18702

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: $52,384,949

Exercised Options: $52,384,949

Current Obligation: $52,384,949

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN15D0017

IDV Type: IDC

Timeline