DoD awards $31M for mortar cartridges, with limited competition and a 1307-day duration

Contract Overview

Contract Amount: $30,987,132 ($31.0M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-09-24

End Date: 2018-04-23

Contract Duration: 1,307 days

Daily Burn Rate: $23.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 120MM RIFLED ILLUM MORTAR CARTRIDGES

Place of Performance

Location: HAMPTON, CALHOUN County, ARKANSAS, 71744

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $31.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: 120MM RIFLED ILLUM MORTAR CARTRIDGES Key points: 1. Contract awarded to a single vendor, raising questions about price competitiveness. 2. Long contract duration suggests a sustained need for these specific munitions. 3. The fixed-price contract type shifts some risk to the contractor. 4. Ammunition manufacturing is a critical defense sector with specialized capabilities. 5. The contract falls under the 'Ammunition (except Small Arms)' manufacturing NAICS code. 6. Awarded by the Department of the Navy, indicating a specific military requirement.

Value Assessment

Rating: fair

The contract value of $30.99 million for 120MM RIFLED ILLUM MORTAR CARTRIDGES over approximately 3.5 years (1307 days) appears to be a significant investment. Without specific per-unit cost data or comparable contract benchmarks, it is difficult to definitively assess value for money. However, the 'NOT COMPETED' status suggests potential for higher pricing than if full and open competition had been pursued. The firm fixed-price structure provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government compared to a competitively awarded contract. The absence of competition suggests potential barriers to entry for other manufacturers or a specific, urgent need that precluded a broader solicitation process.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these mortar cartridges, as there was no market pressure to drive down costs.

Public Impact

The primary beneficiaries are the U.S. military units requiring 120mm illumination mortar rounds for tactical operations. The contract delivers essential ammunition, contributing to the readiness and operational capability of naval forces. The geographic impact is primarily within the defense supply chain, with potential for manufacturing and distribution activities in Arkansas, where the contractor is located. Workforce implications include employment at the contractor's facility for manufacturing and quality control of these specialized munitions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration (over 3 years) may indicate a lack of readily available alternatives or a sustained demand that wasn't proactively planned for competitive bidding.
Lack of transparency in the justification for sole-source award.
Potential for vendor lock-in due to specialized nature of munitions.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contract awarded to a known entity in defense ordnance manufacturing.
Ensures supply of critical munitions for military operations.

Sector Analysis

The defense sector, specifically ammunition manufacturing, is characterized by high barriers to entry due to specialized technology, stringent quality control, and significant capital investment. This contract for illumination mortar cartridges fits within the broader category of ordnance production, a critical component of military logistics. Comparable spending benchmarks are difficult to ascertain without detailed market analysis, but the sustained demand for such munitions is typical in defense procurement.

Small Business Impact

This contract was not set aside for small businesses, and the contractor, GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC., is a large business. There is no indication of subcontracting plans specifically for small businesses within the provided data. This award does not appear to directly benefit the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. 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 limited due to the sole-source nature of the award, with justifications for such awards usually available through specific government contracting portals, though not detailed here. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Naval Ordnance and Munitions
Illumination Munitions
Mortar Systems Components

Risk Flags

Sole-source award
Limited competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.0 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. 120MM RIFLED ILLUM MORTAR CARTRIDGES

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.0 million.

What is the period of performance?

Start: 2014-09-24. End: 2018-04-23.

What is the historical spending pattern for 120mm RIFLED ILLUM MORTAR CARTRIDGES by the Department of Defense?

Analyzing historical spending for this specific munition requires access to comprehensive federal procurement databases. However, general trends in defense spending indicate a consistent need for various types of ammunition, including mortar rounds, to maintain military readiness. The duration of this contract (1307 days) suggests a significant and ongoing requirement. Without specific historical data for this item, it's challenging to pinpoint exact spending patterns, but it's reasonable to assume that similar contracts, potentially with different vendors or under different contract types, have existed to meet past demands. The sole-source nature of this award might imply that previous procurements were also limited in competition or that this is a new, specialized requirement.

What are the specific performance requirements and quality standards for these mortar cartridges?

The provided data does not detail the specific performance requirements or quality standards for the 120MM RIFLED ILLUM MORTAR CARTRIDGES. Typically, such specifications would be outlined in the contract's Statement of Work (SOW) or technical exhibits. These would include parameters such as illumination duration, intensity, color, reliability, safety features, shelf life, and environmental resistance. Quality standards would likely adhere to military specifications (Mil-Spec) and rigorous testing protocols to ensure mission effectiveness and safety. The contractor, GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC., would be contractually obligated to meet these stringent requirements, with potential penalties for non-compliance.

What is the justification for awarding this contract on a sole-source basis?

The specific justification for awarding this contract on a sole-source basis is not provided in the abbreviated data. Common reasons for sole-source procurements include the existence of only one responsible source capable of meeting the requirement, urgent and compelling needs that preclude full and open competition, or specific national security concerns. For specialized munitions like these mortar cartridges, it's possible that only a limited number of manufacturers possess the necessary technical capabilities, production facilities, and security clearances. A formal justification document, often required by federal acquisition regulations, would typically detail the rationale and be available through government contracting portals.

How does the unit cost of these mortar cartridges compare to similar items or market rates?

The provided data does not include the unit cost for these 120MM RIFLED ILLUM MORTAR CARTRIDGES, making a direct comparison to similar items or market rates impossible. The total contract value is $30,987,131.86 over a duration of 1307 days, with the number of units not specified. To assess value for money, one would need to know the quantity purchased to derive a per-unit cost and then benchmark this against prices from other suppliers, historical data for similar items, or industry pricing standards. The sole-source nature of this award suggests that such a benchmark comparison may not have been feasible or prioritized in the procurement process.

What is the track record of GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. in fulfilling defense contracts, particularly for ammunition?

GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. (GD-OTS) is a well-established entity within the defense industry, known for its production of a wide range of ordnance and tactical systems, including ammunition. They have a significant history of supplying munitions to the U.S. military and allied nations. Their track record generally includes the ability to meet stringent military specifications and production demands. While specific performance details for every contract are not publicly available, GD-OTS is considered a major player in this market segment. Their experience suggests a capability to handle complex manufacturing processes and quality control required for items like illumination mortar cartridges.

What are the potential risks associated with a sole-source contract for critical defense supplies?

Sole-source contracts for critical defense supplies carry several potential risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from market-driven cost reductions. Secondly, it can foster vendor dependency, making the government reliant on a single supplier and potentially vulnerable to supply chain disruptions if that supplier faces issues. Thirdly, it may stifle innovation, as there is less incentive for alternative providers to develop competing technologies or more efficient production methods. Finally, sole-source awards can sometimes raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or inefficiency if not properly justified.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785414R7402

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 11399 16TH CT N STE 200, SAINT PETERSBURG, FL, 33716

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: $30,987,132

Exercised Options: $30,987,132

Current Obligation: $30,987,132

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline