Navy awards $21.6M for precision munitions, highlighting Alliant Techsystems' role in defense manufacturing

Contract Overview

Contract Amount: $21,647,307 ($21.6M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2012-08-30

End Date: 2015-07-07

Contract Duration: 1,041 days

Daily Burn Rate: $20.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DEVELOPMENT AND DELIVERY OF 42 PRECISION EXTENDED RANGE MUNITION ALL UP ROUNDS, 2 EXTRACTOR TOOLS, 2 PROJECTILE INTERFACE DEVICES, TEST SUPPORT AND CDRLS.

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442, UNITED STATES OF AMERICA

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $21.6 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: DEVELOPMENT AND DELIVERY OF 42 PRECISION EXTENDED RANGE MUNITION ALL UP ROUNDS, 2 EXTRACTOR TOOLS, 2 PROJECTILE INTERFACE DEVICES, TEST SUPPORT AND CDRLS. Key points: 1. Contract value represents a significant investment in advanced ordnance capabilities. 2. Full and open competition suggests a robust market for these specialized munitions. 3. The contract duration of over 1000 days indicates a long-term need for these items. 4. The specific nature of 'precision extended range munition' points to evolving military requirements. 5. Alliant Techsystems' selection underscores its established position in the defense supply chain. 6. The inclusion of extractor tools and interface devices suggests a comprehensive support package.

Value Assessment

Rating: good

The contract value of $21.6 million for 42 precision extended range munition all-up rounds appears reasonable given the specialized nature of the product and the inclusion of associated tools and test support. Benchmarking against similar advanced munition contracts is challenging due to proprietary data, but the per-unit cost, if calculated, would likely fall within a range expected for high-precision, long-range ordnance. The cost-plus-fixed-fee structure suggests that while the contractor has an incentive to control costs, the government bears some risk related to the final expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited and allowed to bid. The presence of four bidders (no=4) suggests a healthy level of competition for this specialized defense requirement. This competitive environment generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by leveraging market forces to secure the best possible price and value for these critical munitions.

Public Impact

The U.S. Navy benefits from enhanced precision strike capabilities, improving operational effectiveness. The contract supports the development and delivery of advanced munitions essential for national defense. The geographic impact is primarily national, supporting defense industrial base activities. Workforce implications include skilled manufacturing and engineering roles within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not closely monitored.
The long contract duration requires sustained oversight to ensure performance and quality.
Reliance on a single contractor for a critical munition type could pose supply chain risks.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
The contractor, Alliant Techsystems, is a known entity in defense manufacturing.
The contract includes not just munitions but also essential support equipment.
The contract duration suggests a stable, long-term requirement being met.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for advanced munitions is characterized by high barriers to entry due to technological complexity, stringent quality requirements, and significant R&D investment. Spending in this area is driven by military modernization efforts and geopolitical demands. Comparable spending benchmarks would typically be found within the broader DoD budget allocated to procurement of guided missiles and other ordnance.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (sb=false). While the prime contractor is a large entity, there may be opportunities for small businesses to participate as subcontractors in the supply chain for components or specialized services. The impact on the small business ecosystem would depend on the extent to which Alliant Techsystems engages with small business suppliers for this contract.

Oversight & Accountability

Oversight for this contract would be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Cost Plus Fixed Fee (CPFF) structure, requiring the contractor to justify costs and meet performance milestones. Transparency is facilitated through contract awards databases, though specific performance details and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of the Navy Munitions Procurement
Precision Guided Munitions Programs
Advanced Ordnance Development
Defense Industrial Base Support
Alliant Techsystems Defense Contracts

Risk Flags

Long contract duration requires sustained oversight.
CPFF structure necessitates careful cost monitoring.
Potential for supply chain disruptions in defense manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.6 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. DEVELOPMENT AND DELIVERY OF 42 PRECISION EXTENDED RANGE MUNITION ALL UP ROUNDS, 2 EXTRACTOR TOOLS, 2 PROJECTILE INTERFACE DEVICES, TEST SUPPORT AND CDRLS.

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $21.6 million.

What is the period of performance?

Start: 2012-08-30. End: 2015-07-07.

What is the historical spending trend for similar precision extended range munitions by the Department of the Navy?

Analyzing historical spending trends for similar precision extended range munitions by the Department of the Navy requires access to detailed procurement data over multiple fiscal years. Generally, spending in this category fluctuates based on strategic priorities, operational tempo, and budget allocations. Contracts for advanced munitions are often awarded through competitive processes, but specific program values can vary significantly based on quantity, technological sophistication, and contractor capabilities. The Navy, like other branches of the DoD, invests heavily in maintaining and modernizing its ordnance inventory to address evolving threats. Without specific historical contract data for comparable items, it's difficult to provide precise figures, but the overall trend indicates a sustained, significant investment in precision strike capabilities.

How does the per-unit cost of these munitions compare to other similar contracts awarded by the DoD?

Determining the precise per-unit cost requires dividing the total contract value ($21.6 million) by the number of 'all-up rounds' (42). This yields a per-unit cost of approximately $515,405. Comparing this to other similar contracts is challenging without direct access to proprietary pricing data for comparable advanced munitions. However, this figure is within the expected range for highly sophisticated, precision-guided munitions that incorporate advanced targeting, extended range capabilities, and potentially specialized warheads. Contracts for less complex or older generation munitions would likely have significantly lower per-unit costs, while cutting-edge or developmental systems could be even higher. The 'all-up round' designation suggests a complete, ready-to-fire munition, which typically commands a higher price than components or sub-assemblies.

What are the key performance indicators (KPIs) and quality assurance measures for this contract?

Key performance indicators (KPIs) and quality assurance measures for this contract would typically be detailed within the contract's Statement of Work (SOW) and the Quality Assurance Surveillance Plan (QASP). For munition production, critical KPIs often include adherence to strict technical specifications, reliability rates (e.g., probability of successful function), accuracy (e.g., circular error probable - CEP), and delivery schedules. Quality assurance measures would involve rigorous testing protocols, inspection of materials and manufacturing processes, and verification of compliance with defense standards (e.g., MIL-STD). The Cost Plus Fixed Fee (CPFF) contract type implies that the government will monitor costs and performance closely, with specific acceptance criteria for the delivered munitions and associated equipment.

What is Alliant Techsystems' track record with similar munition contracts for the Navy or DoD?

Alliant Techsystems (now part of Northrop Grumman) has a long and extensive track record of supplying munitions and defense systems to the U.S. Navy and the broader Department of Defense. They are a major player in the defense industrial base, known for producing a wide range of ordnance, including artillery shells, missile components, and advanced warheads. Their history includes numerous contracts for various types of munitions, often awarded through competitive processes. Given their established capabilities and past performance, their selection for this contract aligns with their demonstrated expertise in developing and manufacturing complex defense systems. Specific details on past performance metrics for similar contracts would typically be held within DoD source selection records.

What are the potential risks associated with the long duration and CPFF structure of this contract?

The long duration (1041 days, approx. 2.8 years) of this contract, combined with a Cost Plus Fixed Fee (CPFF) structure, presents several potential risks. For the government, there's a risk of cost escalation if the contractor's actual costs exceed initial estimates, although the fixed fee provides some predictability. Effective oversight is crucial to ensure costs are reasonable and allocable. The extended timeline increases the risk of technological obsolescence or shifts in military requirements during the contract period. For the contractor, managing resources and maintaining efficiency over a long period can be challenging. Both parties face risks related to supply chain disruptions, labor availability, and unforeseen production issues that could impact delivery schedules and final costs.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785411R6013

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 4700 NATHAN LN N, PLYMOUTH, MN, 55442

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

Financial Breakdown

Contract Ceiling: $21,647,307

Exercised Options: $21,647,307

Current Obligation: $21,647,307

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $28,061,739

Contract Characteristics

Cost or Pricing Data: NO

Timeline