Day & Zimmermann Group Inc. awarded $29.4M contract for ammunition manufacturing, highlighting potential value and competition dynamics
Contract Overview
Contract Amount: $29,435,938 ($29.4M)
Contractor: DAY & Zimmermann Group Inc., the
Awarding Agency: Department of Defense
Start Date: 2001-12-07
End Date: 2008-12-15
Contract Duration: 2,565 days
Daily Burn Rate: $11.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200210!000117!2100!AE30 !TACOM - PICATINNY !DAAE3002C1004 !A!N! !N! !20011207!20021207!007913486!007913486!007913486!N!DAY & ZIMMERMANN GROUP INC !1818 MARKET ST FL 20 !PHILADELPHIA !PA!19103!35987!099!20!KANSAS ARMY AMMUNITI!LABETTE !KANSAS !+000004970006!N!N!000000000000!1315!AMMUNITION, 75 MM THROUGH 125 MM !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !332995!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!U!2!005!N!5A!Z!N!Z! ! !N!C!N! ! ! !A!C!A!A!000!A!A!Y! ! ! ! ! ! !0001!
Place of Performance
Location: PARSONS, LABETTE County, KANSAS, 67357
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $29.4 million to DAY & ZIMMERMANN GROUP INC., THE for work described as: 200210!000117!2100!AE30 !TACOM - PICATINNY !DAAE3002C1004 !A!N! !N! !20011207!20021207!007913486!007913486!007913486!N!DAY & ZIMMERMANN GROUP INC !1818 MARKET ST FL 20 !PHILADELPHIA !PA!19103!35987!099!20!KANSAS ARMY AMMUNITI!LABET… Key points: 1. Contract value of $29.4M suggests a significant procurement for ammunition. 2. The contract was awarded under full and open competition after exclusion of sources, indicating a competitive process. 3. The duration of 2565 days (approximately 7 years) points to a long-term need for these services. 4. The contract's focus on specific ammunition calibers (75mm-125mm) indicates specialized production requirements. 5. The award to a single contractor, Day & Zimmermann Group Inc., warrants scrutiny of pricing and performance. 6. The contract's geographic location in Kansas may have implications for regional economic impact and workforce.
Value Assessment
Rating: fair
The contract value of $29.4 million for ammunition manufacturing over approximately seven years needs further benchmarking against similar contracts. Without specific details on the quantity and type of ammunition, a precise per-unit cost comparison is difficult. However, the duration suggests a substantial commitment. The fixed-price nature of the contract implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the price is competitive.
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.' While this indicates a competitive process was initiated, the 'exclusion of sources' clause suggests that certain potential bidders may have been disqualified or excluded based on specific criteria. The number of bidders is not explicitly stated in the provided data, but the competitive nature of the award is a positive sign for price discovery.
Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down prices through market forces. However, the exclusion of sources warrants a review to ensure it did not unduly limit competition and result in a higher-than-necessary price.
Public Impact
The primary beneficiaries are the U.S. Army and potentially other branches of the Department of Defense requiring ammunition in the specified calibers. The contract delivers essential ammunition, crucial for military readiness and operational capabilities. The geographic impact is concentrated in Kansas, specifically at the Labette facility, potentially creating or sustaining jobs in the region. Workforce implications include the need for skilled labor in manufacturing, quality control, and logistics within the ammunition sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for limited competition if 'exclusion of sources' was overly restrictive.
- Risk of price escalation if the fixed-price contract was negotiated without sufficient market data.
- Dependence on a single contractor for a critical defense supply chain component.
Positive Signals
- Awarded through a competitive process, suggesting potential for good value.
- Long contract duration provides stability for supply and planning.
- Fixed-price contract shifts cost overrun risk to the contractor.
Sector Analysis
The defense industrial base relies heavily on contractors for the manufacturing of munitions. This contract falls within the 'Other Ordnance and Accessories Manufacturing' sector, a critical component of national security. The market for ammunition is characterized by high barriers to entry due to specialized knowledge, capital investment, and stringent quality control requirements. This specific contract for 75mm through 125mm ammunition addresses a niche but vital segment of the defense supply chain.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this specific award. However, the prime contractor, Day & Zimmermann Group Inc., may engage small businesses as subcontractors, which would require further investigation.
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 penalizes the contractor for cost overruns. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed pricing might be considered sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Ammunition Procurement
- Ordnance Manufacturing Contracts
- Army Sustainment Command Contracts
- Defense Logistics Agency Contracts
Risk Flags
- Potential for limited competition due to 'exclusion of sources'.
- Long-term contract duration requires ongoing performance monitoring.
- Dependence on a single contractor for critical ordnance.
Tags
defense, department-of-the-army, ammunition, manufacturing, firm-fixed-price, full-and-open-competition, kansas, ordnance, large-contract, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.4 million to DAY & ZIMMERMANN GROUP INC., THE. 200210!000117!2100!AE30 !TACOM - PICATINNY !DAAE3002C1004 !A!N! !N! !20011207!20021207!007913486!007913486!007913486!N!DAY & ZIMMERMANN GROUP INC !1818 MARKET ST FL 20 !PHILADELPHIA !PA!19103!35987!099!20!KANSAS ARMY AMMUNITI!LABETTE !KANSAS !+000004970006!N!N!000000000000!1315!AMMUNITION, 75 MM THROUGH 125 MM !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !332995!E! !3! ! ! ! ! !99990909!B
Who is the contractor on this award?
The obligated recipient is DAY & ZIMMERMANN GROUP INC., THE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $29.4 million.
What is the period of performance?
Start: 2001-12-07. End: 2008-12-15.
What is the historical spending pattern for this specific type of ammunition (75mm-125mm) by the Department of the Army?
Analyzing historical spending for 75mm through 125mm ammunition by the Department of the Army is crucial for understanding the context of this $29.4 million award. Without access to detailed historical procurement data, it's challenging to provide precise figures. However, such ammunition calibers are typically used in artillery systems, vehicle-mounted cannons, and potentially some mortar systems. Spending in this category can fluctuate based on operational tempo, inventory levels, modernization programs, and geopolitical factors. A significant award like this suggests either a replenishment of stocks, support for ongoing operations, or a new program requirement. Comparing this award's value to previous contracts for similar ammunition types over similar durations would reveal whether this represents an increase, decrease, or stable level of investment in this specific ordnance category.
How does the per-unit cost of this ammunition compare to industry benchmarks or similar government contracts?
Determining the per-unit cost benchmark for this contract is challenging without knowing the exact quantity and specific type of ammunition procured. The contract value is $29.4 million over a period of approximately seven years. If, for example, the contract was for 1 million rounds of a specific 105mm artillery shell, the implied per-unit cost would be $29.40. However, if it were for a smaller quantity of a more complex munition, the per-unit cost could be significantly higher. To assess value-for-money, this implied per-unit cost would need to be benchmarked against publicly available data for similar ammunition types procured by the DoD or other government agencies, as well as against commercial market rates if applicable. Factors like production volume, material costs, and technological complexity heavily influence per-unit pricing in the defense sector.
What specific risks are associated with Day & Zimmermann Group Inc.'s performance on this contract?
Risks associated with Day & Zimmermann Group Inc.'s performance on this ammunition manufacturing contract could include production delays, quality control failures, supply chain disruptions, and cost overruns (though mitigated by the fixed-price nature). Given the critical nature of ammunition for military readiness, any failure to meet delivery schedules or quality standards could have significant operational consequences. The company's track record with previous DoD contracts, particularly those involving munitions or complex manufacturing, would be a key indicator of potential performance risks. Furthermore, reliance on specific raw material suppliers or specialized manufacturing processes could introduce vulnerabilities. A thorough risk assessment would involve reviewing past performance evaluations, any incurred penalties, and the company's demonstrated capacity to manage large-scale defense production.
What is the strategic importance of this contract for the Department of the Army's ammunition readiness?
This contract is strategically important for the Department of the Army as it ensures the continued availability of specific ammunition calibers (75mm-125mm) essential for various combat platforms, likely including artillery and armored vehicles. Maintaining adequate stocks of these munitions is vital for sustained combat operations, training exercises, and overall force projection capabilities. The long duration of the contract (approx. 7 years) suggests a commitment to long-term readiness and potentially the phasing out or modernization of older systems, requiring specific ammunition types. By securing this supply through a competitive process, the Army aims to balance cost-effectiveness with the critical need for reliable ammunition sources, thereby supporting its operational readiness and strategic objectives.
How does the 'exclusion of sources' clause in the competition impact the potential for innovation and cost savings?
The 'exclusion of sources' clause in a 'full and open competition after exclusion of sources' award means that while the competition was broadly open, certain potential offerors were specifically excluded from bidding. The reasons for exclusion are typically based on factors like security clearances, technical capabilities, past performance issues, or specific government requirements that only a subset of potential contractors can meet. This can limit the pool of innovative solutions and potentially reduce competitive pressure if the excluded sources represented significant competition. While the government aims to ensure only capable and responsible contractors participate, an overly broad or unjustified exclusion could inadvertently lead to higher prices or less innovative approaches compared to a truly unrestricted competition. Understanding the rationale behind the exclusion is key to assessing its impact on innovation and cost savings.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Other Ordnance and Accessories Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1818 MARKET ST FL 20, PHILADELPHIA, PA, 90
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2001-12-07
Current End Date: 2008-12-15
Potential End Date: 2008-12-15 00:00:00
Last Modified: 2008-10-03
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