DoD awards $61.3M for 5.56mm M249 Squad Automatic Weapons to FN America LLC

Contract Overview

Contract Amount: $61,270,671 ($61.3M)

Contractor: FN America LLC

Awarding Agency: Department of Defense

Start Date: 2003-09-24

End Date: 2010-03-20

Contract Duration: 2,369 days

Daily Burn Rate: $25.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200312!003251!2100!AE20 !TACOM ROCK ISLAND !DAAE2003C0100 !A!N! !N! !20030924!20070131!098401086!098401086!370005936!N!F N MANUFACTURING, INC !797 CLEMSON RD !COLUMBIA !SC!29229!16000!079!45!COLUMBIA !RICHLAND !S CAROLINA!+000006973445!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A5 !WEAPONS !1EBT!5.56MM M249 SQD AUTOMATIC WPN !332994!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !B!B!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $61.3 million to FN AMERICA LLC for work described as: 200312!003251!2100!AE20 !TACOM ROCK ISLAND !DAAE2003C0100 !A!N! !N! !20030924!20070131!098401086!098401086!370005936!N!F N MANUFACTURING, INC !797 CLEMSON RD !COLUMBIA !SC!29229!16000!079!45!COLUMBIA !RICHL… Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant contract value for a specific weapon system, indicating specialized defense needs. 3. Long performance period (over 6 years) suggests a sustained requirement for these weapons. 4. Awarded to a single entity, potentially limiting market exploration for alternative suppliers. 5. Geographic concentration of the contractor in South Carolina may have local economic impacts. 6. Fixed-price contract type aims to transfer cost risk to the contractor.

Value Assessment

Rating: fair

The contract value of $61.3 million for 5.56mm M249 Squad Automatic Weapons appears substantial. Without specific unit cost data or comparisons to similar procurements for this exact weapon system, it is difficult to definitively benchmark value. However, the sole-source nature of the award suggests that competitive pricing pressures may have been absent, potentially leading to a higher-than-market price. Further analysis would require access to historical pricing data for this weapon and comparable systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential suppliers. This approach is typically used when only one responsible source can provide the required goods or services. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially impacting the final price paid.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as the government did not have multiple offers to compare and negotiate from.

Public Impact

The primary beneficiaries are the U.S. Army units equipped with the M249 Squad Automatic Weapon. The contract delivers essential small arms for infantry support roles. The geographic impact is national, as the weapons will be deployed across various Army installations. Workforce implications are primarily at the contractor's facility in Columbia, South Carolina, supporting manufacturing jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing opportunities.
Lack of transparency in the justification for sole-source procurement.
Potential for price escalation without competitive pressure over the contract duration.

Positive Signals

Contract awarded to a known supplier with a track record for this specific weapon system.
Firm Fixed Price contract type provides cost certainty for the government.
Long-term award indicates a stable and ongoing requirement for the M249.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the manufacturing of small arms and ordnance. The market for such specialized weaponry is typically concentrated among a few key defense contractors. The total addressable market for small arms procurement by the U.S. military is in the billions annually, with specific weapon systems like the M249 representing a niche but critical segment. This award to FN America LLC aligns with industry trends of awarding significant contracts to established prime contractors for critical weapon systems.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting requirements for small businesses based on the available data. The prime contractor, FN America LLC, is a large business. This means the direct economic impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting officers and program managers. The Defense Contract Management Agency (DCMA) likely provides quality assurance and performance oversight. Transparency is limited due to the sole-source nature, but contract modifications and payment milestones would be subject to standard government financial oversight. Inspector General reviews could be initiated if specific performance or fraud concerns arise.

Related Government Programs

Department of Defense Small Arms Procurement
U.S. Army Infantry Weapon Systems
Automatic Weapons Manufacturing Contracts
Defense Logistics Agency (DLA) Support Contracts

Risk Flags

Sole-source award may result in non-competitive pricing.
Long contract duration could lead to price creep if not managed effectively.
Dependency on a single manufacturer for a critical weapon system.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.3 million to FN AMERICA LLC. 200312!003251!2100!AE20 !TACOM ROCK ISLAND !DAAE2003C0100 !A!N! !N! !20030924!20070131!098401086!098401086!370005936!N!F N MANUFACTURING, INC !797 CLEMSON RD !COLUMBIA !SC!29229!16000!079!45!COLUMBIA !RICHLAND !S CAROLINA!+000006973445!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A5 !WEAPONS !1EBT!5.56MM M249 SQD AUTOMATIC WPN !332994!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is FN AMERICA 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 $61.3 million.

What is the period of performance?

Start: 2003-09-24. End: 2010-03-20.

What is the historical spending pattern for the M249 Squad Automatic Weapon by the Department of the Army?

Historical spending on the M249 Squad Automatic Weapon by the Department of the Army is substantial, reflecting its long service life and critical role in infantry units. While this specific contract represents a significant award, the Army has procured M249s and related components over many years. Analyzing past contracts, including their values, quantities, and award types (competed vs. sole-source), would provide a clearer picture of the total investment in this weapon system. This contract, awarded in 2003 with an end date in 2010, is part of a larger, ongoing lifecycle of procurement and sustainment for the M249, which has seen continuous use and upgrades since its introduction.

How does the unit cost of the M249 under this contract compare to previous awards or market benchmarks?

Determining the precise unit cost for the M249 under this $61.3 million contract is challenging without knowing the exact quantity of weapons procured. The contract states a base value of $61,270,670.92 and a quantity of 332,994 units for '5.56MM M249 SQD AUTOMATIC WPN'. This would imply a unit cost of approximately $184 per weapon. However, this figure likely represents a component or a specific configuration, as fully assembled M249s typically cost significantly more. Without detailed breakdowns or access to historical pricing data for comparable M249 procurements, a direct comparison to market benchmarks or previous awards is difficult. The sole-source nature of this award further complicates value assessment, as competitive pressures that drive down unit costs were absent.

What is FN America LLC's track record with producing the M249 and other small arms for the U.S. military?

FN America LLC, and its predecessor FN Manufacturing Inc., has a long-standing and established track record as the primary manufacturer of the M249 Squad Automatic Weapon for the U.S. military. They have been instrumental in producing and supplying these weapons for decades, ensuring a consistent supply chain for this critical infantry weapon. Beyond the M249, FN America is also known for producing other key small arms for U.S. forces, including the M240 machine gun and the M4/M4A1 carbine. Their extensive experience and established production capabilities make them a critical partner for the Department of Defense in meeting its small arms requirements, often leading to sole-source or limited-competition awards due to their unique expertise and existing production lines.

What are the potential risks associated with a sole-source contract for critical weapon systems like the M249?

Sole-source contracts for critical weapon systems like the M249 present several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved in a competitive environment, as the government lacks leverage from multiple bids. Secondly, it can foster complacency in the contractor, potentially reducing incentives for innovation or efficiency improvements. Thirdly, it creates a dependency on a single supplier, which can be problematic if that supplier faces production issues, financial instability, or geopolitical challenges. Finally, it limits the government's ability to explore alternative technologies or suppliers that might offer better performance or value, potentially hindering modernization efforts.

How does this contract align with the Department of the Army's broader strategy for infantry weapon modernization?

This contract, awarded in 2003 for the M249, represents the sustainment and continued procurement of a proven, albeit older, weapon system within the Army's infantry arsenal. While the M249 remains a vital component, the Department of the Army has concurrently pursued modernization efforts, including the development and fielding of newer weapon systems and upgrades. Contracts like this ensure that current operational needs are met while the Army explores next-generation capabilities. The M249's role as a squad automatic weapon is being re-evaluated in light of emerging technologies and potential replacements, such as the Next Generation Squad Weapon (NGSW) program. Therefore, this contract reflects a strategy of maintaining existing capabilities while investing in future advancements.

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 COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Societ Herstalienne Pour LA Finance L'industrielle ET LE C (UEI: 370005936)

Address: 797 CLEMSON RD, COLUMBIA, SC, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline