DoD awards $6.3M contract for Minuteman III missile battery components, with limited competition

Contract Overview

Contract Amount: $6,334,098 ($6.3M)

Contractor: Eaglepicher Technologies LLC

Awarding Agency: Department of Defense

Start Date: 2016-04-14

End Date: 2025-12-05

Contract Duration: 3,522 days

Daily Burn Rate: $1.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SETUP, QUALIFICATION, TESTING AND DELIVERY OF 360 MK21 ARMING AND FUZING ASSEMBLY BATTERIES FOR THE MINUTE MAN III MISSILE.

Place of Performance

Location: JOPLIN, JASPER County, MISSOURI, 64801

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $6.3 million to EAGLEPICHER TECHNOLOGIES LLC for work described as: SETUP, QUALIFICATION, TESTING AND DELIVERY OF 360 MK21 ARMING AND FUZING ASSEMBLY BATTERIES FOR THE MINUTE MAN III MISSILE. Key points: 1. Contract focuses on critical components for the Minuteman III missile system. 2. Sole-source award raises questions about price competitiveness and potential for cost overruns. 3. Long contract duration (over 9 years) suggests a need for sustained supply chain support. 4. The contractor has a history of supplying batteries for defense applications. 5. Primary battery manufacturing is a niche sector with limited suppliers. 6. The contract type (Cost Plus Fixed Fee) may incentivize cost increases.

Value Assessment

Rating: questionable

The contract value of $6.3 million for 360 units of arming and fuzing assembly batteries is difficult to benchmark without more specific cost breakdowns. Given the sole-source nature of the award, it's challenging to assess if the pricing represents fair market value. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D or uncertain cost environments, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed diligently. Further analysis of the fixed fee and the estimated costs would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to EAGLEPICHER TECHNOLOGIES LLC. There is no indication that other potential bidders were considered or solicited. This limited competition approach suggests that either the government determined EAGLEPICHER TECHNOLOGIES LLC was the only capable source, or there were specific circumstances (e.g., urgent need, proprietary technology) that precluded a broader competition. The lack of competition means that price discovery through market forces was not utilized.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. This could lead to higher costs than if multiple companies had vied for the contract.

Public Impact

The primary beneficiaries are the Department of Defense and the personnel operating the Minuteman III missile system, ensuring operational readiness. The contract delivers essential battery components for the arming and fuzing assemblies of the Minuteman III. The geographic impact is primarily within Missouri, where the contractor is located, potentially supporting local jobs in battery manufacturing. Workforce implications include the need for specialized manufacturing skills in battery production and quality control within the defense supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize higher spending if not closely monitored.
Long contract duration may indicate potential for cost escalation over time.
Reliance on a single supplier for critical missile components poses supply chain risk.

Positive Signals

Contract ensures the continued operational readiness of a critical national defense asset.
The contractor, EAGLEPICHER TECHNOLOGIES LLC, has established expertise in battery manufacturing for defense applications.
The award supports domestic manufacturing capabilities for essential defense components.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of specialized components for strategic missile systems. The market for such highly specialized batteries is likely concentrated among a few key suppliers capable of meeting stringent defense specifications. Benchmarking comparable spending is difficult due to the unique nature of the Minuteman III components and the limited competition. However, spending on strategic weapon system sustainment is a significant portion of the defense budget.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the awardee, EAGLEPICHER TECHNOLOGIES LLC, is a large business. There is no information provided regarding subcontracting plans for small businesses. The lack of a set-aside or explicit subcontracting requirements may limit opportunities for small businesses within this specific contract's scope.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded within the contract terms, including reporting requirements and performance standards. Transparency is limited due to the sole-source nature and the specific technical details of the components. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Minuteman III Sustainment Program
Strategic Nuclear Deterrent Programs
Defense Industrial Base Manufacturing
Aerospace Battery Manufacturing

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Critical component dependency
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.3 million to EAGLEPICHER TECHNOLOGIES LLC. SETUP, QUALIFICATION, TESTING AND DELIVERY OF 360 MK21 ARMING AND FUZING ASSEMBLY BATTERIES FOR THE MINUTE MAN III MISSILE.

Who is the contractor on this award?

The obligated recipient is EAGLEPICHER TECHNOLOGIES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $6.3 million.

What is the period of performance?

Start: 2016-04-14. End: 2025-12-05.

What is the historical spending pattern for these specific arming and fuzing assembly batteries for the Minuteman III missile?

Historical spending data for these specific components is not readily available in the provided information. However, the Minuteman III missile system has been in service for decades, implying a long-term need for sustainment and component replacement. The current contract, awarded in 2016 and extending to 2025, represents a significant investment over its duration. Analyzing past contracts for similar components, if they exist and were competed, could provide a benchmark. Without prior competitive data, it's difficult to establish a historical trend or identify significant deviations in cost or volume.

How does the per-unit cost of these batteries compare to similar components used in other missile systems or defense applications?

A direct per-unit cost comparison is challenging without detailed cost breakdowns and specifications for the MK21 arming and fuzing assembly batteries. The unique requirements of the Minuteman III system, including its age and operational environment, likely necessitate specialized and potentially costly components. If EAGLEPICHER TECHNOLOGIES LLC supplies similar batteries to other programs, a comparison could be made. However, the sole-source nature of this award and the lack of public cost data make external benchmarking difficult. The complexity and criticality of the component suggest a higher cost than standard commercial batteries.

What are the specific risks associated with relying on a single supplier for such critical missile components?

The primary risk of relying on a single supplier (sole-source) for critical missile components like these batteries is supply chain vulnerability. Any disruption at EAGLEPICHER TECHNOLOGIES LLC, whether due to production issues, financial instability, natural disasters, or geopolitical events, could directly impact the operational readiness of the Minuteman III system. This dependency also reduces the government's leverage in price negotiations and could lead to price increases over time. Furthermore, it limits the incentive for the supplier to innovate or improve efficiency if they face no direct competition.

What is EAGLEPICHER TECHNOLOGIES LLC's track record with defense contracts, particularly those involving critical components?

EAGLEPICHER TECHNOLOGIES LLC has a significant track record in supplying batteries and power solutions for various defense and aerospace applications. They are known for producing specialized batteries, including those for missiles, aircraft, and space missions. While specific performance details on past contracts are not provided, their continued engagement with the Department of Defense suggests a level of capability and reliability. However, like any long-term supplier, they may have faced challenges or scrutiny on specific contracts, which would require a deeper dive into contract performance databases.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and potential overruns for this specific contract?

The Cost Plus Fixed Fee (CPFF) contract type means the government pays the contractor's actual allowable costs plus a predetermined fixed fee. This structure provides the contractor with less incentive to control costs compared to fixed-price contracts, as their profit (the fixed fee) remains constant regardless of the final cost. While it can be suitable for research, development, or situations with high cost uncertainty, it places a greater burden on the government to meticulously audit and control the contractor's costs to prevent overruns. For a long-duration contract like this, effective government oversight is crucial to manage potential cost escalations.

Industry Classification

NAICS: Manufacturing › Other Electrical Equipment and Component Manufacturing › Primary Battery Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: C & PORTER STREETS, JOPLIN, MO, 64802

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: $12,622,503

Exercised Options: $6,714,748

Current Obligation: $6,334,098

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline