Department of Defense awards $14M contract for impulse cartridges, with Amtec Corp as the sole awardee

Contract Overview

Contract Amount: $14,041,232 ($14.0M)

Contractor: Amtec Corp

Awarding Agency: Department of Defense

Start Date: 2022-06-16

End Date: 2027-04-18

Contract Duration: 1,767 days

Daily Burn Rate: $7.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NO PLATFORM, BBU-35 A/B IMPULSE CARTRIDGE, NSN: 1377-01-642-1574

Place of Performance

Location: CLEAR LAKE, DEUEL County, SOUTH DAKOTA, 57226

State: South Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to AMTEC CORP for work described as: NO PLATFORM, BBU-35 A/B IMPULSE CARTRIDGE, NSN: 1377-01-642-1574 Key points: 1. Contract value of $14 million over its period of performance. 2. Awarded under full and open competition, indicating a broad search for qualified vendors. 3. The contract is for impulse cartridges, a critical component for various defense applications. 4. Amtec Corp, the contractor, has secured this significant award. 5. The contract duration spans nearly five years, suggesting a long-term need. 6. The fixed-price nature of the contract shifts cost risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific unit cost data or comparisons to similar impulse cartridge procurements. The total award amount of $14 million over approximately 4.8 years suggests an average annual spend of around $2.9 million. This figure needs to be assessed against the quantity and specifications of the BBU-35 A/B impulse cartridges to determine if it represents a competitive price point. The firm fixed-price contract structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the price is set appropriately.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning the Department of Defense solicited bids from all responsible sources. The data indicates there were 3 bids received. While the number of bidders is relatively low, the 'full and open' designation suggests an effort to maximize competition. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of this competition in driving down costs and ensuring the best value.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, generally offers better price discovery for taxpayers compared to sole-source or limited competition scenarios. It signals that the government sought the most advantageous offer available in the market.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive the impulse cartridges. These impulse cartridges are essential components for defense operations, likely supporting aircraft or ordnance systems. The contract is managed by the Department of Defense, indicating a national-level procurement. The workforce implications are likely within the manufacturing sector, specifically for Amtec Corp's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (3) in a full and open competition could indicate potential barriers to entry or a concentrated market.
Lack of detailed unit cost data makes it difficult to fully assess price reasonableness.
The specific application and quantity of cartridges are not detailed, hindering a precise value assessment.

Positive Signals

Awarded under full and open competition, suggesting an attempt to maximize market participation.
Firm fixed-price contract shifts cost risk to the contractor, potentially protecting the government from unexpected price increases.
The contract duration of nearly five years indicates a stable, long-term requirement, allowing for potential economies of scale in production.

Sector Analysis

The procurement of impulse cartridges falls within the broader defense manufacturing sector, specifically related to ordnance and explosives. This sector is characterized by high technical requirements, stringent quality control, and often long-term government contracts. The market size for such specialized components can be niche, with a limited number of qualified manufacturers. Benchmarking this contract's value would ideally involve comparing it to other government contracts for similar ordnance components, considering factors like quantity, specifications, and inflation.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor, Amtec Corp, is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this specific contract appears minimal, unless Amtec Corp voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Inspector General of the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse. Transparency is facilitated through contract award databases like FPDS, which provide basic details of the award. However, detailed performance metrics and spending breakdowns are typically not publicly available.

Related Government Programs

Ordnance Manufacturing
Ammunition Procurement
Defense Logistics Agency Contracts
Air Force Weapon Systems Support

Risk Flags

Limited number of bidders
Potential supply chain vulnerability
Specialized component with niche market

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to AMTEC CORP. NO PLATFORM, BBU-35 A/B IMPULSE CARTRIDGE, NSN: 1377-01-642-1574

Who is the contractor on this award?

The obligated recipient is AMTEC CORP.

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 $14.0 million.

What is the period of performance?

Start: 2022-06-16. End: 2027-04-18.

What is Amtec Corp's track record with the Department of Defense for similar impulse cartridges or ordnance components?

Amtec Corp has a history of contracting with the Department of Defense for various defense-related products. While specific details on their past performance with BBU-35 A/B impulse cartridges are not provided in this data snippet, their ability to secure this $14 million contract suggests they possess the necessary qualifications and experience. A deeper dive into their contract history would reveal the volume and value of previous awards, any performance issues or accolades, and their overall relationship with DoD agencies. This context is crucial for assessing the reliability and potential risks associated with awarding them this significant contract.

How does the awarded price compare to historical spending on BBU-35 A/B impulse cartridges or similar items?

Without historical data on the unit price or total spending for BBU-35 A/B impulse cartridges, a direct comparison is not possible. The current award of $14,041,231.89 over a period of approximately 4.8 years (from June 16, 2022, to April 18, 2027) provides a total contract value. To assess value, one would need to know the quantity of cartridges procured under this contract and compare the resulting unit cost to previous procurements, adjusting for inflation and any changes in specifications. The firm fixed-price nature suggests the price was agreed upon upfront, but its reasonableness hinges on the accuracy of the initial cost estimation and market conditions at the time of award.

What are the primary risks associated with this contract, considering the product and contractor?

Key risks for this contract include potential supply chain disruptions affecting Amtec Corp's ability to deliver the impulse cartridges on time, especially given the nearly five-year duration. Technical risks could arise if there are unforeseen issues with the performance or reliability of the BBU-35 A/B cartridges, although the firm fixed-price contract shifts some of this risk to the contractor. Market concentration is another potential risk; with only three bids received, there might be limited surge capacity or alternative suppliers if Amtec Corp faces significant production challenges. Finally, the specialized nature of ordnance components means that changes in military requirements or technology could render the procured items obsolete, though this is a longer-term consideration.

How effective is the 'full and open competition' strategy likely to be in ensuring program effectiveness for these impulse cartridges?

The 'full and open competition' strategy is designed to maximize the pool of potential suppliers, thereby increasing the likelihood of obtaining high-quality products at competitive prices, which contributes to program effectiveness. For these impulse cartridges, this approach suggests the Department of Defense sought the best available solution in the market. However, the effectiveness is moderated by the fact that only three bids were received. While this is better than a sole-source award, a larger number of bids would typically provide stronger assurance of optimal pricing and innovation. The program's effectiveness will ultimately depend on the reliability and performance of the delivered cartridges meeting operational needs.

What are the historical spending patterns for impulse cartridges or similar ordnance components by the Department of Defense?

Historical spending patterns for impulse cartridges and similar ordnance components by the Department of Defense are generally substantial, reflecting the ongoing need for munitions and related systems across various branches. These procurements often involve multi-year contracts with values ranging from millions to hundreds of millions of dollars, depending on the specific item, quantity, and technological sophistication. The DoD frequently utilizes competitive bidding processes, though the number of bidders can vary significantly based on market dynamics and the specialized nature of the components. Analyzing past spending trends can reveal fluctuations in demand, shifts in technology, and the typical price ranges for such items, providing context for current contract awards like the one to Amtec Corp.

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: FA821321R2028

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 47600 180TH ST, CLEAR LAKE, SD, 57226

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,041,232

Exercised Options: $14,041,232

Current Obligation: $14,041,232

Actual Outlays: $266,112

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA821322D0003

IDV Type: IDC

Timeline