FN America LLC awarded $14.8M contract for M16A4 rifles, with 9 bidders competing
Contract Overview
Contract Amount: $14,805,693 ($14.8M)
Contractor: FN America LLC
Awarding Agency: Department of Defense
Start Date: 2008-07-15
End Date: 2009-12-30
Contract Duration: 533 days
Daily Burn Rate: $27.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 9
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: M16A4 RIFLES
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229
Plain-Language Summary
Department of Defense obligated $14.8 million to FN AMERICA LLC for work described as: M16A4 RIFLES Key points: 1. The contract value of $14.8 million for M16A4 rifles represents a significant investment in small arms procurement. 2. With 9 bidders, the competition dynamics suggest a healthy market for small arms manufacturing. 3. The firm-fixed-price contract type indicates a clear understanding of costs and risks between the government and contractor. 4. The contract duration of 533 days (approximately 1.5 years) allows for a structured production and delivery schedule. 5. FN America LLC's role as the awardee highlights its established position in the defense manufacturing sector. 6. The absence of small business set-aside indicates the primary focus was on best value from established manufacturers.
Value Assessment
Rating: good
The contract value of $14.8 million for M16A4 rifles appears reasonable given the nature of defense procurement. Benchmarking against similar contracts for firearms of this type would provide a more precise value-for-money assessment. However, the presence of 9 bidders suggests competitive pricing was likely achieved, which generally leads to better value for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with 9 distinct bidders vying for the award. This level of competition is generally positive, as it allows a wide range of qualified contractors to participate and encourages competitive pricing. The significant number of bidders suggests that the market for M16A4 rifles is robust and that the government had a good selection of potential suppliers.
Taxpayer Impact: A high level of competition typically translates to better pricing and value for taxpayers, as contractors are incentivized to offer their most competitive bids to secure the contract.
Public Impact
The primary beneficiaries are the U.S. Army personnel who will be equipped with M16A4 rifles, enhancing their combat readiness. The contract delivers essential small arms, a critical component for infantry operations. The geographic impact is primarily within the United States, focusing on FN America LLC's manufacturing facilities in South Carolina. Workforce implications include job creation and retention at FN America LLC and its supply chain partners.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for reliance on a single, established supplier for critical small arms.
- Fluctuations in demand for specific rifle models could impact long-term production planning.
- Geopolitical events could disrupt supply chains for raw materials or components.
Positive Signals
- FN America LLC has a proven track record in defense manufacturing.
- The firm-fixed-price contract provides cost certainty for the government.
- The competitive bidding process suggests a strong market and potential for quality products.
- The contract duration allows for a steady supply of essential equipment.
Sector Analysis
The defense sector for small arms manufacturing is a specialized niche within the broader industrial base. This contract for M16A4 rifles falls under the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' industry. The market is characterized by stringent quality requirements, long production cycles, and significant government oversight. Comparable spending benchmarks would involve analyzing other contracts for similar rifle platforms or individual weapon systems procured by the Department of Defense.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. The award to FN America LLC, a large manufacturer, suggests that the primary focus was on established capabilities and production capacity. This means that direct opportunities for small businesses within this specific contract may be limited, though they could potentially serve as suppliers to the prime contractor.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and quality assurance agencies. Accountability measures are inherent in the firm-fixed-price structure, which holds the contractor responsible for delivering goods within the agreed-upon cost. Transparency is generally maintained through contract award databases and reporting requirements, though specific production oversight details are not provided. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- M4 Carbine Procurement
- Individual Weapon Systems
- Small Arms Ammunition
- Ordnance Manufacturing
- Department of Defense Small Arms Modernization
Risk Flags
- Potential for obsolescence of the M16A4 platform given ongoing modernization efforts.
- Dependence on a single prime contractor for a critical weapon system.
- Supply chain vulnerabilities for raw materials or components.
Tags
defense, department-of-defense, department-of-the-army, small-arms, ordnance, fn-america-llc, firm-fixed-price, full-and-open-competition, south-carolina, m16a4-rifles, manufacturing, procurement
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.8 million to FN AMERICA LLC. M16A4 RIFLES
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 $14.8 million.
What is the period of performance?
Start: 2008-07-15. End: 2009-12-30.
What is FN America LLC's historical performance record with the Department of Defense for similar weapon systems?
FN America LLC has a long-standing relationship with the Department of Defense, having been a primary manufacturer of the M16 rifle series for many years, including the M16A4 variant. They are also known for producing the M249 and M240 machine guns, as well as the M4 carbine. Their track record generally indicates a capacity to meet stringent military specifications and delivery schedules. However, like any large defense contractor, there may have been instances of minor delays or quality control issues over their extensive history, which would be detailed in past performance reviews and contract administration records. The consistent awarding of significant contracts suggests overall satisfactory performance.
How does the per-unit cost of the M16A4 rifles under this contract compare to market rates or previous procurements?
The provided data does not include the per-unit cost, making a direct comparison impossible. The total contract value of $14.8 million divided by the number of units (if known) would yield the average per-unit cost. To benchmark this, one would need to compare this figure against historical data for M16A4 rifle procurements, as well as current market prices for similar military-grade rifles from other manufacturers. Factors such as quantity, specific configurations, and contract terms (like delivery schedules) significantly influence per-unit pricing. Without the unit count or price, a precise comparison cannot be made, but the competitive nature of the award suggests the government sought favorable pricing.
What are the primary risk indicators associated with this specific contract award?
Key risk indicators for this contract include the potential for supply chain disruptions affecting raw materials or components, especially given the global nature of manufacturing. Another risk is the obsolescence of the M16A4 platform over the long term, as newer rifle systems are developed and fielded, potentially leading to reduced future demand or the need for costly upgrades. Dependence on a single manufacturer for a critical weapon system can also pose a risk if that manufacturer faces financial instability or production issues. Finally, the firm-fixed-price nature, while beneficial for cost certainty, places the risk of cost overruns on the contractor, which could incentivize shortcuts if not properly monitored.
How effective has the M16A4 rifle been in supporting U.S. Army operations, and does this contract reflect current operational needs?
The M16A4 rifle has been a standard issue rifle for the U.S. Marine Corps and parts of the U.S. Army for many years, known for its reliability and accuracy. It serves as a capable platform for infantry operations. However, the U.S. Army has been transitioning to the M4 carbine and is now adopting the Next Generation Squad Weapon (NGSW) system, which will eventually replace both the M4 and M16 variants. This contract for M16A4 rifles likely reflects a need to sustain existing inventories, replace aging platforms, or fulfill specific requirements where the M16A4 remains the designated weapon, rather than a shift towards adopting it as a primary new weapon system.
What are the historical spending patterns for M16A4 rifles or similar small arms by the Department of Defense?
Historical spending on M16A4 rifles and similar small arms by the Department of Defense has been substantial over the past two decades. Procurements have fluctuated based on operational tempo, end-strength requirements, and modernization programs. Significant spending occurred during the height of conflicts in Iraq and Afghanistan to equip deploying forces. More recently, spending has shifted towards newer platforms like the M4 carbine and the NGSW program. Contracts for the M16A4, like this one, likely represent sustainment, replacement of worn-out assets, or specific service needs rather than large-scale new equipment fielding. Analyzing historical contract databases would reveal trends in quantity, price, and awardees over time.
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: 9
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Societ Herstalienne Pour LA Finance L'industrielle ET LE C (UEI: 370005936)
Address: 797 OLD CLEMSON RD, COLUMBIA, SC, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $14,805,693
Exercised Options: $14,805,693
Current Obligation: $14,805,693
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W52H0908D0121
IDV Type: IDC
Timeline
Start Date: 2008-07-15
Current End Date: 2009-12-30
Potential End Date: 2009-12-30 00:00:00
Last Modified: 2010-02-19
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