Department of Defense awards $351M for guided missile manufacturing to Alliant Techsystems

Contract Overview

Contract Amount: $351,258,061 ($351.3M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2019-07-29

End Date: 2026-12-31

Contract Duration: 2,712 days

Daily Burn Rate: $129.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AGM-88E AARGM ALL UP ROUND (AUR)

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $351.3 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: AGM-88E AARGM ALL UP ROUND (AUR) Key points: 1. Contract awarded as a definitive contract with a firm fixed price, indicating clear cost expectations. 2. The contract is for guided missile and space vehicle manufacturing, a critical defense sector. 3. Alliant Techsystems Operations LLC is the sole contractor, raising questions about competition. 4. The contract duration is over 2700 days, suggesting a long-term need for these munitions. 5. The contract is not set aside for small businesses, implying a focus on large prime contractors. 6. The contract is classified under NAICS code 336414, specifying Guided Missile and Space Vehicle Manufacturing.

Value Assessment

Rating: fair

Benchmarking the value for this specific contract is challenging without comparable sole-source awards for the AGM-88E AARGM ALL UP ROUND (AUR). However, the total award amount of $351,258,060.84 over its duration suggests a significant investment in advanced missile technology. The firm fixed price contract type provides some cost certainty, but the lack of competition limits the opportunity for price discovery and potential savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source is available or authorized by statute. The lack of competition means that the Department of the Navy did not solicit bids from multiple vendors, potentially limiting the opportunity to secure the best possible price through a competitive bidding process.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that can arise from a competitive bidding environment. The absence of multiple bids means there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Navy warfighters who will receive advanced guided missiles. The contract delivers critical components and assembled missiles essential for air defense and strike missions. The geographic impact is primarily within the United States, where manufacturing and assembly will likely occur. The contract supports a specialized workforce in the aerospace and defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential taxpayer savings.
Long contract duration may indicate potential for cost overruns if not closely managed.
Lack of small business set-aside may limit opportunities for smaller specialized firms in the supply chain.

Positive Signals

Firm fixed price contract provides cost certainty for the government.
Award to a known entity (Alliant Techsystems) suggests reliance on established capabilities.
Focus on advanced missile technology supports critical defense modernization efforts.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector (NAICS 336414) is a highly specialized and critical segment of the aerospace and defense industry. This contract for the AGM-88E AARGM ALL UP ROUND (AUR) fits within this sector, focusing on the production of advanced air-to-ground munitions. The market 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 national security needs and military modernization programs, with major defense contractors dominating the landscape.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary contract is awarded to a large defense contractor, Alliant Techsystems Operations LLC. While this ensures the capability to produce complex defense systems, it may limit direct opportunities for small businesses to participate in this specific prime contract, although they might be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by 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 may be limited due to the sole-source nature of the award, but contract performance data and financial reporting are typically subject to government review and potentially Inspector General oversight.

Related Government Programs

AGM-88 HARM Missile Program
Advanced Precision Munitions
Naval Air Systems Command Contracts
Defense Production Act Investments

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $351.3 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. AGM-88E AARGM ALL UP ROUND (AUR)

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 $351.3 million.

What is the period of performance?

Start: 2019-07-29. End: 2026-12-31.

What is the track record of Alliant Techsystems Operations LLC with the Department of Defense, particularly in missile manufacturing?

Alliant Techsystems Operations LLC, now part of Northrop Grumman, has a long and extensive history of supplying defense products and services to the Department of Defense. They are a major defense contractor with significant experience in aerospace and defense manufacturing, including missile systems. Their portfolio includes a wide range of munitions, propulsion systems, and advanced materials. The company has been involved in numerous large-scale defense contracts, demonstrating a capacity to handle complex production requirements and meet stringent military specifications. Their track record generally indicates a strong capability in delivering sophisticated defense hardware, though specific performance metrics for individual contracts would require deeper analysis of historical contract data and performance reviews.

How does the value of this contract compare to similar missile system procurements by the Navy?

Comparing the value of this $351 million contract for AGM-88E AARGM ALL UP ROUND (AUR) to similar missile system procurements requires access to detailed historical contract data for comparable systems. The AGM-88E is an advanced, anti-radiation missile, and its cost is influenced by its sophisticated targeting and guidance systems, as well as its specific application for naval aviation. Without direct comparisons to other sole-source or competed contracts for similar advanced air-to-ground or anti-radiation missiles procured by the Navy or other services, it's difficult to definitively benchmark the value. However, given the complexity and advanced nature of such munitions, the awarded amount appears to be within the expected range for high-technology defense systems, though a competitive process could potentially yield a lower price.

What are the primary risks associated with a sole-source contract for critical defense munitions?

The primary risks associated with a sole-source contract for critical defense munitions like the AGM-88E AARGM ALL UP ROUND (AUR) revolve around cost, innovation, and supply chain resilience. Without competition, there is a reduced incentive for the sole contractor to minimize costs, potentially leading to higher prices for the government and taxpayers. The lack of multiple bidders can also stifle innovation, as there is less pressure to develop more cost-effective or technologically superior alternatives. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; any disruption in the sole contractor's operations could significantly impact the availability of these critical munitions, posing a risk to national security readiness.

What is the expected program effectiveness or impact of the AGM-88E AARGM ALL UP ROUND (AUR) for the Department of Defense?

The AGM-88E AARGM ALL UP ROUND (AUR) is an advanced anti-radiation missile designed to detect, target, and destroy enemy air-defense systems. Its effectiveness lies in its ability to engage threats that emit radar signals, thereby suppressing or destroying enemy air defenses, which is crucial for enabling friendly aircraft to operate more safely in contested airspace. The 'ALL UP ROUND' configuration implies that the missile is fully assembled and ready for immediate use, enhancing operational readiness. The program's impact is significant for the Department of Defense, particularly the Navy and Marine Corps, as it provides a vital capability for SEAD (Suppression of Enemy Air Defenses) and DEAD (Destruction of Enemy Air Defenses) missions, enhancing survivability and mission success rates in modern warfare scenarios.

How has spending on guided missile manufacturing evolved over the past five years, and where does this contract fit?

Spending on guided missile manufacturing within the Department of Defense has generally seen consistent, high levels due to ongoing modernization efforts and global security challenges. While specific aggregate data for 'Guided Missile and Space Vehicle Manufacturing' (NAICS 336414) across the entire DoD isn't readily available in a summarized format, it's understood to be a multi-billion dollar category annually. This $351 million contract for the AGM-88E AARGM represents a significant, but not unprecedented, investment within this broader category. It reflects the DoD's continued commitment to acquiring advanced munitions to maintain technological superiority. The trend is towards more sophisticated, networked, and precision-guided munitions, which this contract aligns with.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001918R0049

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 9401 CORBIN AVE, NORTHRIDGE, CA, 91324

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: $360,344,529

Exercised Options: $351,258,061

Current Obligation: $351,258,061

Actual Outlays: $26,127,008

Subaward Activity

Number of Subawards: 118

Total Subaward Amount: $116,688,478

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline