Department of Defense awarded $244.7M for 60mm ammunition, with General Dynamics OTS as the primary contractor

Contract Overview

Contract Amount: $24,476,329 ($24.5M)

Contractor: General Dynamics OTS (wilkes Barre), LLC

Awarding Agency: Department of Defense

Start Date: 2000-09-21

End Date: 2011-08-10

Contract Duration: 3,975 days

Daily Burn Rate: $6.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200012!2100!000964!AE30 !TACOM - PICATINNY !DAAE3000C1102 !A!*!* !20000921!20060930!003415650!003415650!003415650!N!99938!MEDICO INDUSTRIESINC !1500 HIGHWAY 315 !WILKES BARRE !PA!18711!85152!079!42!WILKES-BARRE !LUZERNE !PENN !0001!+000001977044!N!N!000000000000!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !1FFJ!60MM AMMUNITION ALL TYPES !8744!3!*!*!*!B!A!*!D !U!J!1!001!N!3A!A!N!Z!* !* !N!B!N!A!*!A!A!A!A!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: WILKES BARRE, LUZERNE County, PENNSYLVANIA, 18711

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $24.5 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC for work described as: 200012!2100!000964!AE30 !TACOM - PICATINNY !DAAE3000C1102 !A!*!* !20000921!20060930!003415650!003415650!003415650!N!99938!MEDICO INDUSTRIESINC !1500 HIGHWAY 315 !WILKES BARRE !PA!18711!85152!079!42!WILKES-BARRE !LUZ… Key points: 1. Contract awarded for a significant quantity of 60mm ammunition, indicating a substantial need within the defense sector. 2. The contract's value suggests a large-scale procurement, potentially supporting ongoing military operations or strategic stockpiling. 3. A firm-fixed-price contract type implies that the contractor bears the risk of cost overruns, offering predictable pricing for the government. 4. The duration of the contract (over 10 years) suggests a long-term requirement for this specific type of ammunition. 5. The award to a single entity, General Dynamics OTS, raises questions about the extent of competition and potential for price optimization. 6. The contract is categorized under 'AMMUNITION, OVER 30 MM UP TO 75 MM', placing it within a critical defense supply chain segment.

Value Assessment

Rating: fair

The total award of $244.7 million over a period of approximately 10 years represents a substantial investment in ammunition. Without specific per-unit cost data or comparisons to similar recent procurements for 60mm ammunition, it is difficult to definitively benchmark the value for money. However, the firm-fixed-price nature of the contract provides cost certainty for the government. The absence of competitive bidding, as indicated by the contract type, may have limited opportunities for price discovery and potentially led to a higher-than-market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, General Dynamics OTS (Wilkes Barre), LLC, was solicited. The data indicates that the contract was not competed. This approach is typically used when only one source is capable of meeting the government's needs, or in cases of urgent requirements. The lack of competition means that the government did not benefit from multiple bids, which could have driven down prices through a competitive bidding process.

Taxpayer Impact: A sole-source award means taxpayers may not have received the best possible price, as there was no competitive pressure to lower costs. This could result in a higher overall expenditure for this ammunition procurement.

Public Impact

The primary beneficiaries are the U.S. Army and potentially other branches of the Department of Defense requiring 60mm ammunition. The contract ensures the supply of 60mm ammunition, crucial for infantry support and various combat scenarios. The geographic impact is centered around the contractor's facility in Wilkes-Barre, Pennsylvania, supporting local employment and the regional economy. Workforce implications include job security and potential expansion at General Dynamics OTS facilities involved in manufacturing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher unit costs for taxpayers.
Sole-source awards can reduce the incentive for contractors to innovate or improve efficiency over time.
Long contract duration without re-competition could lock the government into a potentially suboptimal pricing structure.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established defense contractor like General Dynamics suggests a reliable source for critical munitions.
The significant award amount indicates a commitment to meeting substantial defense needs.

Sector Analysis

This contract falls within the defense industrial base, specifically focusing on the manufacturing of ammunition. The market for military ammunition is characterized by high barriers to entry, stringent quality control, and long-term government contracts. General Dynamics OTS is a major player in this sector. The total spending on ammunition by the Department of Defense is in the billions annually, making this a significant, though not unprecedented, procurement within that larger context.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting goals for small businesses mentioned. General Dynamics OTS is a large defense contractor. Without explicit set-aside provisions or mandated subcontracting plans, the direct impact on the small business defense ecosystem may be limited, though the prime contractor might engage small businesses as suppliers.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm-fixed-price nature shifts some risk to the contractor, but quality assurance and delivery schedule adherence remain key oversight areas. Transparency is generally maintained through contract databases like FPDS, though detailed performance metrics may not always be publicly disclosed.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance and Ammunition Manufacturing
Military Small Arms Ammunition
Tactical Vehicle Ammunition

Risk Flags

Sole-source award limits price competition.
Long contract duration without re-competition.
Potential for supply chain disruption if contractor faces issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.5 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC. 200012!2100!000964!AE30 !TACOM - PICATINNY !DAAE3000C1102 !A!*!* !20000921!20060930!003415650!003415650!003415650!N!99938!MEDICO INDUSTRIESINC !1500 HIGHWAY 315 !WILKES BARRE !PA!18711!85152!079!42!WILKES-BARRE !LUZERNE !PENN !0001!+000001977044!N!N!000000000000!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !1FFJ!60MM AMMUNITION ALL TYPES !8744!3!*!*!*!B!A!*!D !U!J!

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS OTS (WILKES BARRE), LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $24.5 million.

What is the period of performance?

Start: 2000-09-21. End: 2011-08-10.

What is the historical spending pattern for 60mm ammunition by the Department of Defense?

Analyzing historical spending on 60mm ammunition requires accessing detailed procurement data over multiple fiscal years. While this specific contract represents a significant outlay of $244.7 million, understanding the broader trend involves looking at prior awards for similar munitions. Factors influencing historical spending include changes in military doctrine, operational tempo, inventory levels, and the introduction of new weapon systems. Without a comprehensive historical dataset readily available for this specific caliber, it's challenging to provide precise figures. However, sustained military engagement and the need for infantry support weapons generally necessitate consistent, albeit fluctuating, procurement of such ammunition types.

How does the unit cost of this 60mm ammunition compare to similar contracts awarded in the last five years?

A direct comparison of the unit cost for this 60mm ammunition is not possible with the provided data, as the total award amount and contract duration are given, but not the specific quantity of rounds procured. To perform such a comparison, one would need to know the total number of units purchased under this $244.7 million contract and divide it by the total value to get an average unit price. Subsequently, this average unit price would need to be benchmarked against unit prices from other competitively awarded contracts for 60mm ammunition from the same or similar manufacturers over the past five years. The absence of this quantity data prevents a robust value-for-money assessment against market rates.

What are the specific performance metrics and quality assurance standards required under this contract?

The contract details provided do not specify the exact performance metrics or quality assurance standards. However, for ammunition procurement by the Department of Defense, stringent quality control is a standard requirement. This typically includes adherence to military specifications (Mil-Specs) for reliability, accuracy, shelf-life, and safety. Performance metrics would likely encompass on-time delivery schedules, defect rates (e.g., duds, misfires), and compliance with all technical data packages. The Defense Contract Management Agency (DCMA) would be responsible for overseeing adherence to these standards throughout the contract's lifecycle.

What is the track record of General Dynamics OTS (Wilkes Barre), LLC in fulfilling large-scale ammunition contracts?

General Dynamics Ordnance and Tactical Systems (OTS) has a long-standing reputation and extensive experience in manufacturing and supplying a wide range of munitions, including artillery, mortar, and tank rounds, as well as small-caliber ammunition. They are a significant defense contractor with numerous awards across various military branches. Their track record generally indicates a capability to produce large quantities of ordnance meeting rigorous military specifications. While specific performance details for every contract are not always public, their continued success in securing substantial government contracts suggests a history of reliable performance and quality.

What are the potential risks associated with a sole-source award for critical defense materiel like ammunition?

Sole-source awards for critical defense materiel carry several potential risks. Primarily, the lack of competition can lead to higher costs for taxpayers, as the government does not benefit from price reductions that often occur in competitive bidding environments. It can also reduce the incentive for the sole-source contractor to innovate or improve efficiency, as they face less market pressure. Furthermore, over-reliance on a single supplier can create vulnerabilities in the supply chain; if the contractor experiences production issues, quality control failures, or financial instability, it could significantly disrupt the availability of essential materiel. This also limits the government's options if performance issues arise.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1500 HIGHWAY 315, WILKES BARRE, PA, 08

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline