DoD's $15.4M contract for explosives manufacturing shows long-term supplier relationship with Alliant Techsystems

Contract Overview

Contract Amount: $15,417,152 ($15.4M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2007-02-15

End Date: 2017-06-30

Contract Duration: 3,788 days

Daily Burn Rate: $4.1K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BS NACO PROPELLANT

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24141

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $15.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: BS NACO PROPELLANT Key points: 1. The contract represents a significant, long-term commitment to a single supplier for critical defense materials. 2. The duration of the contract suggests a stable demand for these specific explosives. 3. The follow-on nature of the action indicates a successful prior competition or a strategic decision to maintain existing capabilities. 4. The cost-plus-fixed-fee structure may incentivize efficient production within the defined scope. 5. The absence of small business set-aside flags a potential gap in opportunities for smaller defense contractors in this niche. 6. The contract's value, while substantial, needs to be benchmarked against similar long-term defense material procurements.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the exact types and quantities of explosives procured. However, a 10-year duration for a $15.4 million contract suggests a moderate annual spend. The cost-plus-fixed-fee (CPFF) pricing structure can sometimes lead to higher costs compared to fixed-price contracts if not managed carefully, but it also allows for flexibility in production. Without comparable contract data for similar explosives, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract is described as a 'FOLLOW ON TO COMPETED ACTION,' indicating that the initial award was subject to full and open competition. Subsequent delivery orders under this contract may have different competition levels, but the foundational award suggests a competitive process. The number of bidders for the original competition is not specified, but the 'follow-on' nature implies that the initial competition was sufficient to establish a baseline for this supplier relationship.

Taxpayer Impact: A competitive initial award is generally favorable for taxpayers, as it aims to secure the best value through market forces. However, the long-term nature of follow-on actions can sometimes reduce ongoing price pressure if competition is not re-established periodically.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring a supply of essential explosives for military operations. The contract supports the manufacturing of explosives, a critical component for various defense applications. The geographic impact is primarily centered around the contractor's facilities in Virginia, contributing to local employment and economic activity. Workforce implications include the maintenance of specialized manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not rigorously overseen.
Long-term reliance on a single supplier could create strategic vulnerabilities if that supplier faces disruption.
Lack of explicit small business participation may limit broader economic impact and innovation.

Positive Signals

Successful competition for the initial award suggests a foundation of fair pricing and capability.
The long contract duration indicates a stable and reliable supply chain for critical materials.
The follow-on nature implies satisfaction with the contractor's performance and product quality.

Sector Analysis

The explosives manufacturing sector is a critical, albeit niche, part of the broader defense industrial base. Companies in this sector require specialized facilities, stringent safety protocols, and significant R&D investment. Spending in this area is often characterized by long-term contracts due to the nature of defense planning and the specialized capabilities required. This contract fits within the 'Explosives Manufacturing' (NAICS 325920) category, a segment that supports national security by providing essential munitions components.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was likely awarded based on the capabilities of larger defense contractors. While this ensures access to specialized manufacturing expertise, it means that opportunities for small businesses to participate directly in this specific explosives manufacturing contract are limited. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Given the nature of defense procurement, there are likely established accountability measures, including performance reviews, quality assurance checks, and financial audits. The Inspector General's office for the Department of Defense would have jurisdiction for investigating any potential fraud, waste, or abuse related to this contract. Transparency is typically managed through contract databases and reporting requirements.

Related Government Programs

Ordnance and Ammunition Manufacturing
Defense Industrial Base Sustainment
Missile and Space Systems Manufacturing
Chemical Manufacturing

Risk Flags

Long-term sole-source potential (if follow-on actions are not re-competed)
Cost overrun risk (CPFF structure)
Supply chain dependency
Safety and security risks inherent in explosives manufacturing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. BS NACO PROPELLANT

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS 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 $15.4 million.

What is the period of performance?

Start: 2007-02-15. End: 2017-06-30.

What is the specific type and quantity of explosives being manufactured under this contract, and how does this compare to historical DoD needs?

The provided data identifies the North American Industry Classification System (NAICS) code as 325920, which corresponds to 'Explosives Manufacturing.' However, it does not specify the exact types or quantities of explosives. This information is crucial for understanding the contract's precise role within DoD's logistical chain and for comparing its scale to historical needs. Without this granularity, it's difficult to assess if the $15.4 million over approximately 10 years represents a significant volume or a niche requirement. Historical spending patterns for specific explosive types would be needed for a robust comparison.

How did Alliant Techsystems Operations LLC perform on previous contracts, particularly those involving explosives manufacturing, prior to this award?

The data indicates this is a 'FOLLOW ON TO COMPETED ACTION,' suggesting a prior contractual relationship. Alliant Techsystems Operations LLC is a known entity in the defense sector. Assessing their past performance on similar explosives manufacturing contracts is vital. Key performance indicators would include on-time delivery, quality adherence (meeting specifications), cost control (especially if previous contracts were CPFF), and safety record. A review of past performance evaluations, if publicly available, would provide insight into their reliability and capability, informing the risk assessment for this current contract.

What is the competitive landscape for explosives manufacturing, and were there viable alternatives to Alliant Techsystems Operations LLC for this specific requirement?

The 'full-and-open' competition for the initial award implies that multiple sources were considered. However, the specialized nature of explosives manufacturing often limits the number of qualified contractors. Understanding the number of bidders and the capabilities of the losing bidders is essential to gauge the true level of competition. If the market is concentrated with few players, even a competed contract might not yield optimal price discovery. Research into other DoD-approved explosives manufacturers and their capacity would clarify the competitive dynamics and potential risks associated with relying on a limited supplier base.

What are the key risk indicators associated with this contract, considering its duration, pricing structure, and the nature of the product?

Key risk indicators include the inherent safety and security risks associated with explosives manufacturing, the potential for cost overruns under the Cost Plus Fixed Fee (CPFF) structure if not tightly managed, and supply chain vulnerabilities. The long duration (approx. 10 years) increases the risk of technological obsolescence or shifts in DoD requirements. Furthermore, reliance on a single contractor, even if initially competed, poses a strategic risk if the contractor faces financial difficulties, operational disruptions, or geopolitical challenges. The lack of small business involvement could also be seen as a risk to fostering a broader, more resilient industrial base.

How does the annual spending rate of approximately $1.54 million per year compare to other DoD contracts for similar defense materials or manufacturing services?

An annual spend of roughly $1.54 million for explosives manufacturing is moderate. To benchmark this effectively, it needs comparison against contracts for similar materials (e.g., propellants, specialized chemical compounds) or manufacturing services within the defense sector. Contracts for large-scale munitions production or advanced materials development would likely have significantly higher annual values. Conversely, contracts for highly specialized, low-volume components might have similar or lower annual expenditures. Accessing aggregated spending data for NAICS 325920 or related defense manufacturing categories would provide a clearer picture of where this contract sits within the broader DoD spending landscape.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: STATE ROUTE 114, RADFORD, VA, 24143

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,417,152

Exercised Options: $15,417,152

Current Obligation: $15,417,152

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: DAAA0902G0010

IDV Type: IDC

Timeline