DoD awards $35.3M for ammunition, with General Dynamics securing the delivery order

Contract Overview

Contract Amount: $35,339,298 ($35.3M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-09-11

End Date: 2021-02-28

Contract Duration: 1,266 days

Daily Burn Rate: $27.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 30MM MK258 DELIVERY ORDER AWARD

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $35.3 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 30MM MK258 DELIVERY ORDER AWARD Key points: 1. Value for money assessed through competitive bidding process. 2. Competition dynamics indicate a robust market for ammunition manufacturing. 3. Risk indicators are low given the nature of the product and established contractor. 4. Performance context is a delivery order for existing ammunition types. 5. Sector positioning within Defense manufacturing is significant for ordnance suppliers.

Value Assessment

Rating: good

The contract value of $35.3 million for ammunition appears reasonable given the duration and the nature of the goods. Benchmarking against similar ammunition contracts would provide a more precise value-for-money assessment. However, the firm-fixed-price contract type suggests that the government has locked in costs, which is generally favorable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, suggesting that multiple bidders were considered. The presence of competition is a positive sign for price discovery and ensuring the government receives competitive pricing for its ammunition needs. The specific number of bidders is not detailed, but the designation implies a fair and open process.

Taxpayer Impact: A competitive award process helps ensure taxpayer dollars are used efficiently by driving down prices through market forces.

Public Impact

Benefits the Department of Defense by ensuring a supply of critical ammunition. Services delivered include the manufacturing and delivery of ammunition. Geographic impact is primarily on the contractor's facilities in Illinois. Workforce implications include employment at the manufacturing facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating a fair process.
Firm fixed price contract type helps control costs for the government.
Established contractor with a track record in defense ordnance.

Sector Analysis

The defense sector, particularly ordnance manufacturing, is a critical component of national security. This contract falls within the Ammunition (except Small Arms) Manufacturing sub-sector. Spending in this area is consistent with ongoing military readiness requirements. Comparable spending benchmarks would involve analyzing aggregate DoD spending on similar ammunition types over time.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large defense contractor suggests that the primary focus was on established capabilities for large-scale production rather than fostering small business participation in this specific award.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms. Accountability is maintained through the firm-fixed-price structure and delivery schedules. Transparency is generally provided through contract award databases, though specific performance details may be limited.

Related Government Programs

Department of the Army Ammunition Procurement
Defense Logistics Agency Ammunition Stockpile Management
Ordnance and Ammunition Manufacturing Contracts

Risk Flags

Potential for supply chain disruption if contractor faces issues.
Long-term price increases if competition diminishes in future.
Dependence on a single contractor for critical munitions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.3 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 30MM MK258 DELIVERY ORDER AWARD

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE & 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 $35.3 million.

What is the period of performance?

Start: 2017-09-11. End: 2021-02-28.

What is the historical spending pattern for this specific type of ammunition by the Department of the Army?

Analyzing historical spending for MK258 ammunition by the Department of the Army would require access to detailed procurement data over several fiscal years. This specific delivery order, valued at $35.3 million, represents a portion of the Army's overall expenditure on ammunition. Trends in spending can be influenced by factors such as operational tempo, inventory levels, modernization programs, and geopolitical events. A comprehensive review would involve aggregating data from multiple contract awards for this munition type, looking for patterns in award values, quantities, and frequency. This would help determine if the current award is consistent with past investment levels or represents a significant increase or decrease in procurement.

How does the unit cost of this ammunition compare to similar contracts awarded to other manufacturers?

Direct comparison of unit costs for this specific ammunition (MK258) is challenging without detailed pricing breakdowns within the contract award data. The $35.3 million award covers a delivery order, and the exact quantity of ammunition procured is not specified in the provided data. To benchmark unit costs, one would need to identify comparable contracts for the same or similar ammunition types, awarded around the same period, and ideally to different manufacturers. Factors such as quantity discounts, specific technical requirements, and contract terms (e.g., delivery schedules) can significantly influence unit pricing. A thorough analysis would involve normalizing prices based on these variables to establish a fair market comparison.

What is General Dynamics Ordnance & Tactical Systems' track record with similar ammunition contracts?

General Dynamics Ordnance & Tactical Systems (GD-OTS) has a well-established track record in manufacturing and supplying a wide range of ordnance and ammunition to the U.S. military and allied nations. They are a significant player in the defense industrial base, known for producing various types of munitions, including artillery shells, mortar rounds, and other specialized ordnance. Their history with the Department of Defense includes numerous contracts for similar items, often awarded through competitive processes. GD-OTS's experience suggests a capability to meet stringent quality, production, and delivery requirements for military-grade ammunition, making them a reliable supplier for critical defense needs.

What are the potential risks associated with relying on a single source for this type of ammunition, even if competition was initially present?

While this contract was awarded under full and open competition, over-reliance on any single manufacturer for critical defense materiel like ammunition can introduce risks. These risks include potential supply chain disruptions due to unforeseen events (e.g., natural disasters, labor disputes, geopolitical instability affecting the contractor's operations), price escalation if the contractor faces increased costs and has limited competition in future procurements, and a potential decrease in innovation if market competition wanes. Maintaining a robust industrial base with multiple capable suppliers, even if only one is awarded a specific contract, is a strategic consideration for ensuring long-term supply security and cost-effectiveness.

How does this contract contribute to the overall readiness and strategic goals of the Department of the Army?

This delivery order for MK258 ammunition directly supports the Department of the Army's readiness by ensuring the availability of a specific type of munition essential for training and operational missions. Ammunition is a consumable but critical resource; maintaining adequate stocks is fundamental to the Army's ability to project power and respond to threats. The procurement of such items aligns with strategic goals related to maintaining a capable and well-equipped fighting force. The specific type of ammunition likely serves particular weapon systems, and its availability ensures those systems can be effectively employed when needed, contributing to overall deterrence and defense posture.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 6658 ROUTE 148, MARION, IL, 62959

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: $35,339,298

Exercised Options: $35,339,298

Current Obligation: $35,339,298

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $1,189,536

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J13D0038

IDV Type: IDC

Timeline