DoD awards $34.6M contract for flares to Kilgore Flares Company LLC, with 2 years remaining

Contract Overview

Contract Amount: $34,611,030 ($34.6M)

Contractor: Kilgore Flares Company LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-16

End Date: 2025-04-30

Contract Duration: 1,687 days

Daily Burn Rate: $20.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MJU-53/B, NSN 1370-01-503-1455

Place of Performance

Location: TOONE, HARDEMAN County, TENNESSEE, 38381

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $34.6 million to KILGORE FLARES COMPANY LLC for work described as: MJU-53/B, NSN 1370-01-503-1455 Key points: 1. Contract value appears reasonable given the duration and nature of the product. 2. Full and open competition suggests a healthy market for this type of defense supply. 3. The contract is for a critical defense supply, indicating a need for reliable sourcing. 4. Performance context is tied to Air Force readiness and operational support. 5. This contract falls within the explosives manufacturing sector, a specialized defense industry segment.

Value Assessment

Rating: good

The contract's total value of $34.6 million over approximately 6.7 years (from Sept 2020 to April 2025) suggests an average annual spend of roughly $5.16 million. Benchmarking this against similar contracts for pyrotechnic devices or flares is challenging without more specific market data. However, the firm fixed-price structure indicates that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the price was competitive. The delivery order structure also implies flexibility in procurement, potentially optimizing value over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. The presence of two bidders (as suggested by 'no': 2) is a moderate level of competition. While more bidders could potentially drive prices lower, two bidders still provide a basis for price comparison and negotiation, suggesting a reasonable degree of market responsiveness.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for essential defense materiel. Full and open competition generally leads to more efficient use of funds compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other Department of Defense branches requiring illumination and signaling flares. The contract delivers essential pyrotechnic devices (flares) crucial for tactical operations, signaling, and training. Geographic impact is national, supporting military operations across various theaters. Workforce implications include supporting jobs in the explosives manufacturing sector, primarily in Tennessee where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single supplier for a critical component could pose supply chain risks.
Ensuring consistent quality control for explosive materials is paramount.

Positive Signals

Firm fixed-price contract structure shifts cost risk to the contractor.
Awarded under full and open competition, suggesting market viability and potential for future competition.
Contract duration provides a stable supply chain for a critical defense item.

Sector Analysis

The explosives manufacturing sector is a niche but critical part of the defense industrial base. Companies in this sector often require specialized facilities, stringent safety protocols, and adherence to strict regulatory compliance. Spending in this area is directly tied to military readiness and operational requirements. Comparable spending benchmarks are difficult to establish without detailed knowledge of specific flare types and quantities, but the annual spend of over $5 million is significant for a specialized product.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Kilgore Flares Company LLC is likely a large business. There is no explicit information on subcontracting plans for small businesses within this specific award, but large defense contractors often have established subcontracting programs to meet broader federal goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. The Air Force is the specific agency awarding the contract. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Air Force Aviation Support Equipment
Pyrotechnics and Signal Devices
Defense Industrial Base Manufacturing

Risk Flags

Potential for supply chain disruption if raw material costs increase significantly.
Dependence on a limited number of qualified manufacturers for specialized pyrotechnics.
Ensuring long-term quality and reliability of explosive materials.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.6 million to KILGORE FLARES COMPANY LLC. MJU-53/B, NSN 1370-01-503-1455

Who is the contractor on this award?

The obligated recipient is KILGORE FLARES COMPANY LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $34.6 million.

What is the period of performance?

Start: 2020-09-16. End: 2025-04-30.

What is the historical spending trend for flares or similar pyrotechnic devices by the Department of Defense?

Analyzing historical spending trends for flares and similar pyrotechnic devices by the Department of Defense requires access to comprehensive procurement data over multiple fiscal years. Generally, spending in this category fluctuates based on operational tempo, strategic priorities, and inventory management. Factors such as geopolitical events, new equipment fielding, and obsolescence of existing systems can drive demand. The DoD procures a wide variety of pyrotechnics, including illumination flares, signaling devices, and countermeasures. While specific figures for 'flares' alone are not readily available without detailed database queries, the overall defense budget allocated to munitions and related supplies provides a broader context. Trends often show sustained, albeit variable, investment to ensure adequate stocks for training and combat readiness. Recent years may reflect increased focus on modernization and diversification of supply chains.

How does the unit cost of these flares compare to commercially available or similar military-grade flares?

Determining the precise unit cost of the flares procured under this $34.6 million contract is not possible without knowing the exact quantity of flares delivered. The contract is for 'Explosives Manufacturing' and specifies 'MJU-53/B, NSN 1370-01-503-1455,' which refers to a specific type of flare. Commercial flares or even different military specifications can vary significantly in cost due to complexity, materials, performance characteristics (e.g., burn time, intensity, color), and required certifications. Military-grade pyrotechnics often incorporate specialized safety features, environmental resilience, and specific performance parameters that command a premium over commercial equivalents. Without the quantity, a direct per-unit comparison is speculative. However, the firm fixed-price nature suggests the price was deemed acceptable by the procuring agency after competition.

What are the primary risks associated with the supply chain for this specific type of flare?

The primary risks associated with the supply chain for the MJU-53/B flare (NSN 1370-01-503-1455) manufactured by Kilgore Flares Company LLC include: 1. **Single Source Dependence:** While awarded under full and open competition, if Kilgore is one of only a few manufacturers capable of producing this specific NSN to military specifications, future competition could be limited, leading to potential price increases or supply disruptions if their production is interrupted. 2. **Raw Material Availability:** Pyrotechnics rely on specific chemical compounds and raw materials. Disruptions in the supply of these precursor chemicals, whether due to geopolitical issues, environmental regulations, or other manufacturing challenges, can impact production. 3. **Regulatory Compliance:** The manufacturing of explosive materials is highly regulated. Changes in safety, environmental, or transportation regulations could affect production costs or timelines. 4. **Geographic Concentration:** If Kilgore's manufacturing facilities are concentrated in one region (Tennessee, in this case), natural disasters or localized disruptions could impact the entire supply chain for this specific item.

What is Kilgore Flares Company LLC's track record with Department of Defense contracts?

Kilgore Flares Company LLC has a significant history of contracting with the Department of Defense, primarily for the production of flares and other pyrotechnic devices. Publicly available data indicates numerous awards over several years, suggesting a sustained relationship and capability in meeting DoD requirements. Their contract portfolio often includes various types of flares (illumination, signaling, countermeasures) for different branches of the military, including the Air Force, Navy, and Army. The company's longevity and continued awards imply a generally positive track record in terms of product delivery and meeting specifications. However, a comprehensive assessment would require reviewing performance evaluations, any past disputes, or contract terminations, which are not detailed in this summary data.

How does the contract duration (1687 days) impact the overall value and risk for the government?

The contract duration of 1687 days (approximately 4.6 years, aligning with the Sept 2020 to April 2025 end date) provides a substantial period for the delivery of goods. For the government, a longer duration can offer supply chain stability, ensuring a consistent availability of critical items like flares without the need for frequent re-procurement actions. This stability can reduce administrative burden and the risk of stock-outs. From a value perspective, longer-term contracts, especially if awarded competitively, can sometimes secure more favorable pricing due to the supplier's ability to plan production and potentially achieve economies of scale. However, it also locks the government into a specific supplier and price for an extended period. If market prices for raw materials or competing technologies decrease significantly during the contract term, the government might be paying above-market rates. The firm fixed-price nature mitigates cost overrun risk for the government, but the risk of the price becoming uncompetitive over time remains.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA821319R3008

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie Industrielle DE Delle

Address: 155 KILGORE DR, TOONE, TN, 38381

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,611,030

Exercised Options: $34,611,030

Current Obligation: $34,611,030

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA821319D0012

IDV Type: IDC

Timeline