Department of Defense awards $40.6M for non-standard ammunition, competed via fair opportunity

Contract Overview

Contract Amount: $40,587,147 ($40.6M)

Contractor: Global Military Products Inc

Awarding Agency: Department of Defense

Start Date: 2016-12-30

End Date: 2018-09-26

Contract Duration: 635 days

Daily Burn Rate: $63.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NON-STANDARD AMMUNITION - AWARD OF W52P1J-16-D-0058/0007 TO CHEMRING. DELIVERY ORDER WAS COMPETED IAW FAIR OPPORTUNITY (FAR 16.505).

Place of Performance

Location: PERRY, TAYLOR County, FLORIDA, 32348

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $40.6 million to GLOBAL MILITARY PRODUCTS INC for work described as: NON-STANDARD AMMUNITION - AWARD OF W52P1J-16-D-0058/0007 TO CHEMRING. DELIVERY ORDER WAS COMPETED IAW FAIR OPPORTUNITY (FAR 16.505). Key points: 1. Contract awarded to Global Military Products Inc. for ammunition manufacturing. 2. The delivery order was competed under fair opportunity guidelines. 3. The contract type is Firm Fixed Price, indicating predictable costs. 4. The contract duration is 635 days, spanning over a year. 5. The North American Industry Classification System (NAICS) code is 332993 for Ammunition Manufacturing. 6. The contract was awarded in Florida, with a place of performance also in Florida. 7. The contract value represents a significant investment in specialized ordnance.

Value Assessment

Rating: good

The contract value of $40.6 million for non-standard ammunition appears reasonable given the specialized nature of the product. Benchmarking against similar contracts for unique ordnance requires detailed market analysis, but the firm fixed-price structure suggests cost certainty for the government. The number of bids (2) is on the lower side, which could warrant further investigation into pricing competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This delivery order was competed IAW Fair Opportunity (FAR 16.505), indicating that multiple sources were considered. While the data specifies two bidders, the 'full and open competition' designation suggests a broader solicitation process was intended. The level of competition, with two bidders, is adequate but could potentially be improved to drive greater price discovery.

Taxpayer Impact: A competitive process, even with two bidders, helps ensure that taxpayer funds are used efficiently by encouraging favorable pricing and terms.

Public Impact

This contract supports the Department of Defense's logistical and operational readiness by providing essential ammunition. The services delivered are critical for military operations, ensuring troops have necessary supplies. The geographic impact is primarily in Florida, where the contract was awarded and performed. The contract supports the manufacturing sector, specifically in the defense-related ammunition industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) could indicate potential market concentration or barriers to entry for other suppliers.
The specific 'non-standard' nature of the ammunition may limit the pool of qualified manufacturers.

Positive Signals

Awarded under fair opportunity, suggesting a structured and compliant competition process.
Firm Fixed Price contract type provides cost predictability for the government.
Contract performance is located within the United States (Florida).

Sector Analysis

The ammunition manufacturing sector is a critical component of the defense industrial base. This contract falls within the broader manufacturing industry, specifically focusing on defense-related ordnance. The market for specialized ammunition can be niche, with a limited number of qualified suppliers capable of meeting stringent military specifications. Spending in this area is driven by operational tempo, modernization efforts, and strategic stockpiling requirements.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the specialized nature of ammunition manufacturing, it is possible that larger, more established firms are the primary participants. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the performance of this contract.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a delivery order under a larger contract vehicle, oversight would likely involve the contracting officer and relevant Department of Defense agencies. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance Manufacturing Contracts
Defense Industrial Base Support
Firm Fixed Price Contracts

Risk Flags

Limited competition (2 bidders)
Potential for supply chain vulnerabilities in specialized manufacturing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.6 million to GLOBAL MILITARY PRODUCTS INC. NON-STANDARD AMMUNITION - AWARD OF W52P1J-16-D-0058/0007 TO CHEMRING. DELIVERY ORDER WAS COMPETED IAW FAIR OPPORTUNITY (FAR 16.505).

Who is the contractor on this award?

The obligated recipient is GLOBAL MILITARY PRODUCTS 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 $40.6 million.

What is the period of performance?

Start: 2016-12-30. End: 2018-09-26.

What is the track record of Global Military Products Inc. with the Department of Defense?

Global Military Products Inc. has a history of receiving contracts from the Department of Defense. While this specific award is for $40.6 million, a comprehensive review of their contract history would reveal the volume, types, and performance of previous awards. Analyzing past performance, including any reported issues or successes, is crucial for assessing the contractor's reliability and capability in fulfilling current and future obligations. This includes examining on-time delivery rates, quality of goods, and adherence to contract terms across their portfolio of government contracts.

How does the pricing of this contract compare to similar ammunition procurements?

Benchmarking the pricing of this $40.6 million delivery order against similar 'non-standard ammunition' procurements is challenging without access to detailed market data and specific item specifications. The 'non-standard' designation implies unique requirements that may command different price points compared to common munitions. A thorough value assessment would involve comparing the per-unit cost or total value against contracts for items with comparable complexity, quantity, and lead times, while also considering the competitive landscape and the contractor's cost structure. The firm fixed-price nature provides cost certainty, but the actual value is determined by the market rate for these specialized goods.

What are the primary risks associated with this contract?

Key risks for this contract include potential supply chain disruptions for specialized materials, manufacturing delays impacting delivery schedules, and the possibility of cost overruns if unforeseen technical challenges arise, despite the firm fixed-price structure. Given the 'non-standard' nature, there's also a risk related to obsolescence or evolving military requirements that could render the procured ammunition less relevant. Ensuring the contractor maintains robust quality control processes is critical to mitigate risks associated with product defects or performance failures in the field.

How effective is the 'fair opportunity' competition method for this type of specialized procurement?

The 'fair opportunity' competition method, as outlined in FAR 16.505, is intended to ensure that all awardees under a multiple-award contract have a fair chance to compete for task orders. For specialized procurements like non-standard ammunition, this method can be effective if the underlying contract vehicle was broadly competed and allows for a sufficient pool of qualified vendors. However, the effectiveness is contingent on the specific implementation – ensuring that the solicitation for the delivery order reaches all relevant, capable sources and that the evaluation criteria are transparent and objective. The fact that only two bidders participated warrants scrutiny regarding the breadth of outreach and potential barriers to entry.

What is the historical spending trend for non-standard ammunition by the Department of Defense?

Analyzing historical spending trends for non-standard ammunition by the Department of Defense is essential for contextualizing this $40.6 million award. This would involve examining aggregate spending data over several fiscal years to identify patterns, fluctuations, and the overall budget allocation for such specialized items. Understanding whether spending has been increasing, decreasing, or remaining stable can indicate shifts in military strategy, operational needs, or technological advancements. It also helps in assessing if this particular award represents a significant deviation from historical norms or aligns with established procurement trajectories.

What are the implications of the contract being awarded in Florida?

The award and performance location in Florida has several implications. It signifies economic activity and potential job creation within the state's defense manufacturing sector. It also means that oversight and logistical coordination might be managed from facilities or personnel located in that region. For the contractor, it implies adherence to state-specific regulations and potentially leveraging local supply chains or workforce capabilities. The geographic concentration can also be relevant for assessing risks related to regional disruptions, such as natural disasters or localized economic downturns.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chemring Group PLC (UEI: 216244954)

Address: 10625 PUCKETT ROAD, PERRY, FL, 32348

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: $40,587,147

Exercised Options: $40,587,147

Current Obligation: $40,587,147

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J16D0059

IDV Type: IDC

Timeline