Air Force awards $37.5M contract for ammunition manufacturing to Grand Valley Manufacturing Co

Contract Overview

Contract Amount: $37,550,855 ($37.6M)

Contractor: Grand Valley Manufacturing CO

Awarding Agency: Department of Defense

Start Date: 2025-08-26

End Date: 2027-08-26

Contract Duration: 730 days

Daily Burn Rate: $51.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SEE ATTACHED DOCUMENTS FOR BLU-140 DESCRIPTION/SPECIFICATIONS/SOW

Place of Performance

Location: TITUSVILLE, CRAWFORD County, PENNSYLVANIA, 16354

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $37.6 million to GRAND VALLEY MANUFACTURING CO for work described as: SEE ATTACHED DOCUMENTS FOR BLU-140 DESCRIPTION/SPECIFICATIONS/SOW Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is for ammunition manufacturing, a critical component of defense readiness. 3. The duration of the contract is two years, indicating a medium-term need. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. The award amount of $37.5 million falls within a moderate spending range for defense procurement. 6. The North American Industry Classification System (NAICS) code 332993 points to specialized manufacturing capabilities.

Value Assessment

Rating: good

The contract's firm fixed price structure is a positive indicator for cost control. Benchmarking against similar ammunition manufacturing contracts would provide a clearer picture of value for money. Given the specialized nature of defense manufacturing, direct comparisons may be limited, but the competitive award process suggests a reasonable price was sought.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with five bids received. This indicates a healthy level of interest and a robust bidding environment for this type of defense procurement. The multiple bidders suggest that the government had options and was able to select a contractor based on best value, likely leading to more competitive pricing.

Taxpayer Impact: A competitive bidding process for ammunition manufacturing ensures that taxpayer dollars are used efficiently, as multiple companies vied for the contract, driving down costs.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other branches of the military requiring ammunition. The contract will deliver essential ammunition, contributing to national defense capabilities. The geographic impact is primarily centered around the contractor's facilities in Pennsylvania. The contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Reliance on a single contractor for a critical defense component could pose a risk if performance issues arise.

Positive Signals

Firm Fixed Price contract structure provides cost certainty.
Awarded through full and open competition, indicating a competitive market.
Contractor is based in Pennsylvania, potentially supporting domestic manufacturing.

Sector Analysis

The defense manufacturing sector, particularly ammunition production, is a critical but specialized area. This contract falls under the broader industrial base supporting national security. Spending in this sector is often driven by geopolitical factors and military readiness requirements. Comparable spending benchmarks would typically be found within the Department of Defense's overall procurement of munitions.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting plans for small businesses within the provided data. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms. Accountability will be managed through contract performance monitoring and adherence to the firm fixed price terms. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. The Inspector General's office would have jurisdiction over any allegations of fraud or mismanagement.

Related Government Programs

Department of Defense Ammunition Procurement
Air Force Munitions Contracts
Defense Industrial Base Manufacturing

Risk Flags

Potential supply chain vulnerabilities
Quality control assurance needed
Delivery schedule adherence monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.6 million to GRAND VALLEY MANUFACTURING CO. SEE ATTACHED DOCUMENTS FOR BLU-140 DESCRIPTION/SPECIFICATIONS/SOW

Who is the contractor on this award?

The obligated recipient is GRAND VALLEY MANUFACTURING CO.

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 $37.6 million.

What is the period of performance?

Start: 2025-08-26. End: 2027-08-26.

What is the historical spending pattern for Grand Valley Manufacturing Co. with the Department of Defense?

Analyzing historical spending for Grand Valley Manufacturing Co. with the Department of Defense requires access to a broader contract database. Without specific historical data, it's difficult to ascertain if this $37.5 million award represents a significant increase or a typical level of business. However, the fact that they were awarded this contract under full and open competition suggests they have the capabilities and potentially a track record that met the Air Force's requirements. Further investigation into past awards, contract types, and performance reviews would be necessary to establish a comprehensive spending pattern and assess their reliability as a long-term supplier.

How does the per-unit cost of the ammunition compare to industry benchmarks?

The provided data does not include specific details on the type or quantity of ammunition being procured, making a direct per-unit cost comparison impossible. The contract is for 'Ammunition (except Small Arms) Manufacturing,' which is a broad category. To benchmark the per-unit cost, one would need to know the exact specifications of the ammunition (e.g., caliber, type, explosive fill) and then compare it to publicly available pricing data for similar items from other defense contractors or government price lists. The firm fixed price nature of the contract implies that Grand Valley Manufacturing Co. has already factored in their costs and profit margins, but without the unit details, assessing value for money on a per-unit basis remains speculative.

What are the specific risks associated with Grand Valley Manufacturing Co.'s performance on this contract?

Potential risks associated with Grand Valley Manufacturing Co.'s performance include production delays, quality control issues, or failure to meet delivery schedules. Given that this is a firm fixed price contract, the contractor bears the financial risk of cost overruns, which could incentivize them to cut corners on quality or rush production, potentially impacting reliability. Another risk could be related to the supply chain for raw materials, which can be volatile in the defense sector. The Air Force will likely mitigate these risks through rigorous quality assurance inspections, performance metrics, and clear contractual remedies for non-performance.

What is the strategic importance of this ammunition contract for the Air Force?

This contract is strategically important as it ensures the continued supply of essential ammunition for Air Force operations and readiness. Ammunition is a consumable but critical resource for training, deployment, and combat. By securing a two-year supply through a competitive process, the Air Force is mitigating potential shortages and ensuring that its platforms and personnel are adequately equipped. The specific type of ammunition procured will dictate its precise role, but generally, such contracts are vital for maintaining operational capability and deterrence.

How does the competition level (5 bidders) impact the overall value for taxpayers?

A competition level of five bidders is generally considered healthy and suggests a robust market for this type of ammunition manufacturing. A higher number of bidders typically leads to more competitive pricing as companies strive to win the contract by offering the best value. For taxpayers, this means that the $37.5 million awarded is likely a more efficient use of funds compared to a sole-source or limited competition scenario where the government might have fewer options and potentially pay a premium. The competitive pressure encourages contractors to optimize their production processes and manage costs effectively.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA821325RB007

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 701 E SPRING ST, TITUSVILLE, PA, 16354

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

Financial Breakdown

Contract Ceiling: $37,550,855

Exercised Options: $37,550,855

Current Obligation: $37,550,855

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865622DA006

IDV Type: IDC

Timeline