Army awards $53.6M contract for small arms and ordnance to Center Industries Corp

Contract Overview

Contract Amount: $53,622,737 ($53.6M)

Contractor: Center Industries Corp

Awarding Agency: Department of Defense

Start Date: 2002-05-30

End Date: 2008-08-29

Contract Duration: 2,283 days

Daily Burn Rate: $23.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200210!000979!2100!AE20 !TACOM ROCK ISLAND !DAAE2002F0022 !A!N! !N! !20020530!20070430!073321325!073321325!073321325!N!CENTER INDUSTRIES CORP !2505 S CUSTER !WICHITA !KS!67217!79000!173!20!WICHITA !SEDGWICK !KANSAS !+000000787000!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A5 !WEAPONS !1000!NOT DISCERNABLE OR CLASSIFIED !332994!E! !8! ! ! ! ! !99990909!B! ! !N!Z!B!N!J!1!001!N!5A!A!N!A! ! !N!D!N! ! ! ! ! !A!A!* !A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67217

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $53.6 million to CENTER INDUSTRIES CORP for work described as: 200210!000979!2100!AE20 !TACOM ROCK ISLAND !DAAE2002F0022 !A!N! !N! !20020530!20070430!073321325!073321325!073321325!N!CENTER INDUSTRIES CORP !2505 S CUSTER !WICHITA !KS!67217!79000!173!20!WICHITA !SEDGW… Key points: 1. Contract awarded for small arms and ordnance, a critical component of military readiness. 2. The contract was not available for competition, raising questions about potential cost savings. 3. A firm fixed-price contract type suggests that the contractor bears the risk of cost overruns. 4. The duration of the contract is over 6 years, indicating a long-term need for these supplies. 5. The awardee, Center Industries Corp., is based in Wichita, Kansas, contributing to the local economy.

Value Assessment

Rating: fair

The contract value of $53.6 million for small arms and ordnance over more than 6 years appears to be within a reasonable range for defense procurement, though a direct comparison is difficult without more specific product details. The firm fixed-price nature of the contract shifts cost risk to the contractor, which can be a positive indicator for the government if the contractor manages costs effectively. However, the lack of competition prevents a robust benchmark against market rates or alternative suppliers, making a definitive value-for-money assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not available for competition, meaning only one source was solicited. The specific reasons for this sole-source award are not detailed in the provided data. A lack of competition can limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract. Without information on the solicitation process, it's difficult to ascertain if this was a necessary exception or a missed opportunity for competitive bidding.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government could not leverage market forces to secure the best possible price.

Public Impact

The primary beneficiaries are the U.S. Army, which receives essential small arms and ordnance. The contract ensures the supply of critical weaponry and related components for military operations. The geographic impact is centered in Wichita, Kansas, where Center Industries Corp. is located, supporting local jobs and the regional economy. The contract supports the manufacturing workforce involved in defense production within the awarded company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than could have been achieved through a competitive process.
Limited transparency into the justification for a sole-source award raises concerns about potential inefficiencies.
The long contract duration could expose the government to risks if technology or needs change significantly over time.

Positive Signals

Firm fixed-price contract type places cost control responsibility on the contractor.
Award to an established company suggests a degree of reliability in production and delivery.
The contract supports a critical defense need, ensuring the availability of essential materiel.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on small arms and ordnance. The market for such specialized defense equipment is often characterized by limited suppliers due to stringent quality, security, and technological requirements. While the exact market size for this specific type of ordnance is not readily available, it is a crucial sub-segment of the broader defense industrial base. Benchmarking spending is challenging due to the specialized nature and often classified aspects of defense procurement.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it specify any subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, unless Center Industries Corp. voluntarily engages small businesses in its supply chain. The absence of a small business set-aside suggests this procurement was focused on capabilities available from larger, established defense contractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the sole-source nature of the award and the general classification of defense procurement details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Ordnance and Small Arms Manufacturing
Army Weapons Systems Procurement
Defense Industrial Base Contracts

Risk Flags

Sole-source award limits competition and price discovery.
Lack of detailed justification for sole-source award.
Potential for higher costs due to absence of competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.6 million to CENTER INDUSTRIES CORP. 200210!000979!2100!AE20 !TACOM ROCK ISLAND !DAAE2002F0022 !A!N! !N! !20020530!20070430!073321325!073321325!073321325!N!CENTER INDUSTRIES CORP !2505 S CUSTER !WICHITA !KS!67217!79000!173!20!WICHITA !SEDGWICK !KANSAS !+000000787000!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A5 !WEAPONS !1000!NOT DISCERNABLE OR CLASSIFIED !332994!E! !8! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is CENTER INDUSTRIES CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $53.6 million.

What is the period of performance?

Start: 2002-05-30. End: 2008-08-29.

What is the track record of Center Industries Corp. in fulfilling defense contracts, particularly for similar ordnance?

Center Industries Corp. has a history of fulfilling defense contracts, including those related to ordnance and weapon systems. While specific details on past performance for this exact type of ordnance are not provided in the summary data, their established presence in the defense manufacturing sector suggests experience. A deeper dive into their contract history, including past performance reviews and any reported issues on previous awards, would be necessary for a comprehensive assessment. The fact that they were awarded this significant contract, even on a sole-source basis, implies a level of confidence from the Department of the Army in their capabilities.

How does the awarded price of $53.6 million compare to similar ordnance contracts awarded by the Department of Defense?

Directly comparing the $53.6 million award to similar ordnance contracts is challenging without more specific details about the exact items being procured, their quantities, and the contract duration. Defense procurement prices can vary significantly based on technological complexity, production volume, and specific military requirements. Given this contract's duration of over six years and its sole-source nature, a precise benchmark is difficult. However, for major ordnance systems, such figures can be within the expected range, though the lack of competition prevents a definitive statement on whether it represents optimal value for taxpayers.

What are the primary risks associated with this sole-source contract for small arms and ordnance?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not be achieving the lowest possible cost for these essential supplies. Another risk is contractor performance; while Center Industries Corp. is an established entity, any delays or quality issues could impact military readiness. Furthermore, the long duration of the contract introduces the risk of technological obsolescence or shifts in military requirements that may not be adequately addressed by the current agreement.

How effective is the firm fixed-price contract type in ensuring program effectiveness for ordnance procurement?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring cost control and predictability, as it places the financial risk of cost overruns on the contractor. This incentivizes the contractor to manage their expenses efficiently. For ordnance procurement, where specifications are often well-defined, FFP can lead to predictable budgeting. However, program effectiveness also hinges on the contractor's ability to meet quality standards and delivery schedules. If the contractor struggles with these aspects, the FFP structure alone does not guarantee overall program success, and the government may still face delays or quality issues.

What are the historical spending patterns for small arms and ordnance by the Department of the Army?

Historical spending patterns for small arms and ordnance by the Department of the Army are substantial, reflecting the continuous need for these materiel across various military branches and operational theaters. While specific aggregate figures for 'small arms, through 30 mm' are not detailed here, the Army consistently allocates significant portions of its budget to weapon systems and ammunition. This includes research, development, procurement, and sustainment. Spending can fluctuate based on geopolitical events, modernization programs, and operational tempo. Contracts like this one represent a portion of that ongoing investment in maintaining and modernizing the Army's combat capabilities.

What is the justification for awarding this contract on a sole-source basis, and were other sources considered?

The provided data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. However, the specific justification or rationale behind this determination is not included. Typically, sole-source awards are made under specific circumstances, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation, it is impossible to ascertain if other sources were considered or why they were deemed unsuitable. This lack of transparency is a common concern with sole-source defense contracts.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2505 S CUSTER, WICHITA, KS, 04

Business Categories: AbilityOne Program Participant, Category Business, Not Designated a Small Business, Special Designations

Timeline