DoD awards $25.8M for warhead cases, with a significant portion allocated to a single delivery order

Contract Overview

Contract Amount: $25,826,500 ($25.8M)

Contractor: Faxon Machining, LLC

Awarding Agency: Department of Defense

Start Date: 2024-10-10

End Date: 2026-04-10

Contract Duration: 547 days

Daily Burn Rate: $47.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER #7 FOR BLU-136/B NEXT GENERATION AREA ATTACK WARHEAD CASE. NSN: 1325-01-674-1609.

Place of Performance

Location: CINCINNATI, HAMILTON County, OHIO, 45240

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $25.8 million to FAXON MACHINING, LLC for work described as: DELIVERY ORDER #7 FOR BLU-136/B NEXT GENERATION AREA ATTACK WARHEAD CASE. NSN: 1325-01-674-1609. Key points: 1. The contract value represents a substantial investment in advanced munitions. 2. Competition dynamics suggest a focused procurement strategy for specialized components. 3. Delivery order structure may indicate phased production or specific mission requirements. 4. The fixed-price contract type aims to control costs and provide predictability. 5. Geographic concentration in Ohio for manufacturing warrants attention for supply chain resilience. 6. The NSN points to a specific, advanced component within the munitions category.

Value Assessment

Rating: good

The total award of $25.8 million for warhead cases appears reasonable given the specialized nature of the product. Benchmarking against similar advanced munitions components is challenging due to limited public data. However, the per-unit cost, while not explicitly stated, can be inferred from the total award and the number of units if known, which would be a key metric for value assessment. The firm fixed-price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded, potentially due to specific technical capabilities or prior performance. The exact number of bidders is not specified, but this type of competition suggests a limited pool of qualified contractors. This could lead to less aggressive pricing compared to unrestricted full and open competition.

Taxpayer Impact: The limited competition may result in higher prices for taxpayers compared to a scenario with broader participation from qualified vendors.

Public Impact

The Department of Defense benefits from the acquisition of advanced warhead components essential for national security. This contract supports the production of next-generation area attack warheads. Manufacturing is concentrated in Ohio, potentially creating or sustaining local jobs in the defense manufacturing sector. The delivery order structure implies a phased approach to equipping military assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could restrict price discovery and potentially lead to higher costs.
Reliance on a single contractor for this critical component raises supply chain risk.
The exclusion of sources, if not fully justified, could limit innovation and market access.

Positive Signals

The firm fixed-price contract provides cost certainty for the government.
The award supports the modernization of U.S. military capabilities.
Manufacturing is located within the United States, supporting domestic industrial capacity.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of advanced munitions. The market for such specialized components is typically characterized by high barriers to entry, stringent quality requirements, and a limited number of qualified suppliers. Spending in this area is driven by military modernization efforts and the need for cutting-edge weapon systems. Comparable spending benchmarks would likely be found within other advanced ordnance procurements by the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. However, the prime contractor, FAXON MACHINING, LLC, may engage small businesses as subcontractors, depending on their own supply chain needs and capabilities. The overall impact on the small business ecosystem is indirect and depends on the prime's subcontracting practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, which is the specific agency within the DoD awarding the delivery order. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Ordnance Manufacturing
Munitions Production
Defense Ammunition Procurement
Air Force Weapon Systems

Risk Flags

Limited competition may lead to higher costs.
Geographic concentration of manufacturing poses supply chain risk.
Exclusion of sources requires clear justification to ensure fair market access.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.8 million to FAXON MACHINING, LLC. DELIVERY ORDER #7 FOR BLU-136/B NEXT GENERATION AREA ATTACK WARHEAD CASE. NSN: 1325-01-674-1609.

Who is the contractor on this award?

The obligated recipient is FAXON MACHINING, 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 $25.8 million.

What is the period of performance?

Start: 2024-10-10. End: 2026-04-10.

What is the historical spending pattern for BLU-136/B warhead cases or similar advanced munitions components by the Department of Defense?

Analyzing historical spending for specific advanced munitions components like the BLU-136/B warhead case is challenging due to the classified or sensitive nature of such data. However, general trends in defense spending indicate a consistent investment in modernizing ordnance capabilities. The Department of Defense's budget typically allocates significant funds towards research, development, and procurement of advanced munitions to maintain technological superiority. Over the past decade, there has been a strategic focus on precision-guided munitions and area attack capabilities, suggesting sustained or increasing investment in components like these. Specific contract awards for similar items, when publicly available, often show multi-million dollar figures, reflecting the high cost of specialized manufacturing and advanced materials. Without access to detailed historical procurement data for this specific NSN or comparable items, a precise spending pattern cannot be definitively established, but the overall trend points to ongoing investment in advanced warhead technology.

How does the per-unit cost of this warhead case compare to industry benchmarks or similar government contracts?

Determining the precise per-unit cost for the BLU-136/B warhead case is not possible with the provided data, as the total award amount ($25,826,500) and the number of units procured are not directly correlated in the summary. To establish a per-unit cost, the total number of warhead cases delivered under this order would be required. Furthermore, direct comparison to industry benchmarks or similar government contracts is difficult due to the specialized nature of advanced munitions components. Such items often involve proprietary technologies, unique manufacturing processes, and stringent quality control, which can lead to significant cost variations. Government contracts for similar advanced ordnance components, when publicly disclosed, can serve as a rough comparison, but differences in specifications, quantities, and competition levels make direct benchmarking unreliable. Without specific unit quantities or access to classified pricing data, a definitive per-unit cost comparison cannot be made.

What are the specific risks associated with relying on FAXON MACHINING, LLC for this critical defense component, considering the contract type and competition level?

The primary risks associated with relying on FAXON MACHINING, LLC for this critical defense component stem from the limited competition and the potential for supply chain disruption. With a 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award, the pool of qualified manufacturers may be small, increasing dependence on this single contractor. If FAXON MACHINING, LLC experiences production issues, financial instability, or faces unforeseen operational challenges, it could significantly impact the delivery schedule of these essential warhead cases, potentially affecting military readiness. The firm fixed-price contract, while beneficial for cost control, places the risk of cost overruns on the contractor; however, if the contractor struggles to meet demand or quality standards, the government might face delays or the need to find alternative, potentially more expensive, solutions. The exclusion of other sources, if not thoroughly justified by unique capabilities, also represents a risk by limiting the government's options and potentially stifling competitive pressure that could drive down costs or improve innovation.

What is the expected performance or effectiveness of the BLU-136/B Next Generation Area Attack Warhead Case based on its designation and the contract details?

The designation 'BLU-136/B Next Generation Area Attack Warhead Case' strongly suggests that this component is part of an advanced munition designed for area effect or widespread impact, likely intended for use against dispersed targets or in scenarios requiring area denial. The 'Next Generation' aspect implies that it incorporates improved technologies, materials, or design features compared to previous warhead cases, potentially offering enhanced lethality, safety, or reliability. The 'Case' itself is the structural housing for the warhead's explosive payload and fusing mechanisms. Its design is critical for ensuring the safe handling, storage, and effective detonation of the munition. While the contract details do not specify performance metrics, the award by the Department of Defense signifies its perceived importance and suitability for current and future military operations. The firm fixed-price nature of the contract indicates that the contractor is expected to deliver a product meeting specific, pre-defined technical specifications and quality standards necessary for the warhead's intended effectiveness.

What are the implications of the contract being awarded in Ohio for the broader defense industrial base and supply chain resilience?

The concentration of this advanced warhead case manufacturing in Ohio has several implications for the broader defense industrial base and supply chain resilience. Firstly, it leverages existing expertise and infrastructure within Ohio's robust manufacturing sector, which has a significant presence in defense contracting. This can lead to efficiencies and potentially faster production cycles by utilizing a skilled workforce and established supply chains for raw materials and components. However, concentrating production in a single geographic location also introduces risks. A natural disaster, major transportation disruption, or localized labor issues in Ohio could severely impact the supply of these critical components to the Department of Defense. This highlights a potential vulnerability in the supply chain. For broader resilience, the DoD often seeks to diversify manufacturing locations for critical defense articles to mitigate such risks. While this specific award may be optimized for current capabilities, future strategies might involve encouraging or requiring production across multiple sites or regions.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11101 ADWOOD DR, CINCINNATI, OH, 45240

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

Financial Breakdown

Contract Ceiling: $25,826,500

Exercised Options: $25,826,500

Current Obligation: $25,826,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA868120D0001

IDV Type: IDC

Timeline