DoD awards $60.6M for M795 metal parts, with 2 previous orders under this contract

Contract Overview

Contract Amount: $60,602,400 ($60.6M)

Contractor: General Dynamics Ordnance and Tactical Systems Inc

Awarding Agency: Department of Defense

Start Date: 2018-08-22

End Date: 2019-12-31

Contract Duration: 496 days

Daily Burn Rate: $122.2K/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 0008 - THE PURCHASE OF M795 METAL PARTS UNDER ORDERING PERIOD 4.

Place of Performance

Location: SCRANTON, LACKAWANNA County, PENNSYLVANIA, 18505

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $60.6 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC for work described as: DELIVERY ORDER 0008 - THE PURCHASE OF M795 METAL PARTS UNDER ORDERING PERIOD 4. Key points: 1. Value for money assessed through fixed-price with economic price adjustment, allowing for cost fluctuations. 2. Competition dynamics indicate a full and open process after exclusion of sources, suggesting a competitive environment. 3. Risk indicators include the fixed-price with economic price adjustment contract type, which can expose the government to price increases. 4. Performance context is within the Ammunition (except Small Arms) Manufacturing sector, a critical defense supply chain component. 5. Sector positioning is within the defense industrial base, specifically focusing on ordnance manufacturing.

Value Assessment

Rating: good

The contract value of $60.6 million for M795 metal parts appears reasonable given the nature of defense procurement. While specific benchmarking data for this exact part is not provided, the fixed-price with economic price adjustment (FPEPA) structure aims to balance cost control with market volatility. The presence of two previous orders under this contract suggests a continued need and potentially established pricing, though a detailed cost breakdown would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition after exclusion of sources' basis. This implies that while the competition was generally open, certain sources may have been excluded for specific reasons, potentially related to security, capability, or prior performance. The number of bidders is not specified, but the 'full and open' designation suggests a competitive process was intended, which typically aids in price discovery.

Taxpayer Impact: The open competition, even with exclusions, is generally favorable for taxpayers as it aims to secure the best possible pricing through market forces.

Public Impact

The Department of Defense benefits through the acquisition of essential M795 metal parts for ammunition. Services delivered include the manufacturing and supply of critical metal components for military ordnance. Geographic impact is primarily within Pennsylvania, where the contractor is located. Workforce implications include employment at the contractor's facility in Pennsylvania, supporting the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to the economic price adjustment clause in the contract.
Reliance on a single contractor for a critical defense component could pose supply chain risks if not managed proactively.

Positive Signals

Awarded under a full and open competition, indicating a structured procurement process.
Contractor has prior experience with this specific order, suggesting familiarity with requirements.
The contract is for a specific, defined product (M795 metal parts), reducing scope creep risks.

Sector Analysis

The contract falls within the Ammunition (except Small Arms) Manufacturing sector, a niche but vital part of the defense industrial base. This sector is characterized by high barriers to entry due to specialized knowledge, stringent quality control, and government regulations. Spending in this area is driven by military readiness requirements and modernization efforts. Comparable spending benchmarks would typically involve other contracts for similar ordnance components or ammunition manufacturing services.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses are not detailed in this data, but typically, prime contractors in defense are encouraged to utilize small business subcontractors where feasible.

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 contract's fixed-price with economic price adjustment terms, requiring the contractor to meet specifications and delivery schedules. Transparency is facilitated through contract award databases, though detailed cost breakdowns may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance Manufacturing Contracts
Army Ammunition Production
Defense Industrial Base Support

Risk Flags

Potential cost overruns due to economic price adjustment.
Supply chain disruption risk for critical components.
Limited competition if excluded sources were significant players.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.6 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC. DELIVERY ORDER 0008 - THE PURCHASE OF M795 METAL PARTS UNDER ORDERING PERIOD 4.

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 $60.6 million.

What is the period of performance?

Start: 2018-08-22. End: 2019-12-31.

What is the historical spending trend for M795 metal parts under this contract vehicle?

The provided data indicates that this is DELIVERY ORDER 0008, suggesting a series of orders have been placed under a larger contract or ordering period. The total value for this specific order is $60.6 million. To understand the historical spending trend, one would need to examine the values and dates of the preceding orders (0001 through 0007) and any subsequent orders. This would reveal the total expenditure over the life of the contract vehicle, the average order value, and whether spending has been consistent, increasing, or decreasing over time. Without access to the details of the other delivery orders, a comprehensive trend analysis is not possible.

How does the pricing of these M795 metal parts compare to similar components procured by the DoD?

A direct comparison of the per-unit cost for these M795 metal parts to similar components is challenging without specific unit pricing data and detailed specifications for comparable items. The contract type, Fixed Price with Economic Price Adjustment (FPEPA), introduces variability. While the total award is $60.6 million, the actual unit cost can fluctuate based on economic factors outlined in the contract. To benchmark effectively, one would need to identify contracts for similar ordnance components, analyze their unit prices, contract types, and the specific economic adjustment clauses applied. Factors like material costs, manufacturing complexity, and volume discounts significantly influence pricing, making direct comparisons difficult without granular data.

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

The primary risk associated with the Fixed Price with Economic Price Adjustment (FPEPA) contract type for M795 metal parts is the potential for increased costs to the government. While it aims to protect the contractor from unforeseen economic fluctuations (like material cost increases), it can lead to higher final prices than a firm fixed-price contract if those economic factors trend upwards. The government bears the risk of these price adjustments. Effective management requires robust monitoring of economic indicators tied to the adjustment formula and clear contract terms to prevent excessive price escalations. The benefit is ensuring supply continuity by allowing contractors to manage market volatility.

What is the significance of 'Ammunition (except Small Arms) Manufacturing' as a sector for this contract?

The 'Ammunition (except Small Arms) Manufacturing' sector is critically important for national defense, as it directly supports the supply chain for munitions used by the military. Contracts within this sector ensure the availability of essential ordnance, which is vital for training, readiness, and operational deployment. Companies operating in this space often require specialized facilities, stringent quality control processes, and adherence to strict regulatory and security standards. The performance of General Dynamics Ordnance and Tactical Systems Inc. in this area is crucial for maintaining the DoD's ammunition stocks and readiness capabilities. This sector is typically characterized by long-term relationships and significant government investment.

What does the 'full and open competition after exclusion of sources' designation imply for contractor performance and pricing?

The 'full and open competition after exclusion of sources' designation implies that the procurement process was intended to be competitive, allowing any responsible source to submit an offer, with the exception of specific identified sources that were excluded. The reasons for exclusion are typically based on factors like security clearances, specialized capabilities, or prior performance issues. This approach aims to balance broad competition with the need to ensure only qualified and appropriate entities participate. For pricing, it suggests that competitive pressures were applied, likely leading to more favorable terms than a sole-source award. However, the exclusion of certain sources could potentially limit the extent of competition and its downward pressure on prices compared to a truly unrestricted full and open competition.

What is the track record of General Dynamics Ordnance and Tactical Systems Inc. in fulfilling similar defense manufacturing contracts?

General Dynamics Ordnance and Tactical Systems Inc. (GD-OTS) is a well-established entity within the defense industry, known for its extensive experience in manufacturing ordnance, including ammunition and related components. They have a long history of supplying various defense products to the U.S. military and allied nations. Their track record typically involves large-scale production, adherence to strict quality standards, and managing complex supply chains. While specific performance metrics for this particular M795 metal parts contract (Delivery Order 0008) are not detailed here, GD-OTS's general reputation and its position as a major defense contractor suggest a capacity to meet demanding production requirements. Past performance evaluations and contract award histories would provide more granular insights into their reliability and quality.

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: General Dynamics Corp (UEI: 001381284)

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: $60,602,400

Exercised Options: $60,602,400

Current Obligation: $60,602,400

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN15D0016

IDV Type: IDC

Timeline