Naval Sea Systems Command awards $12.3M contract for MK45 Mod-O 5.54 Gun Mounts to McNally Industries

Contract Overview

Contract Amount: $12,272,700 ($12.3M)

Contractor: Mcnally Industries, LLC

Awarding Agency: Department of Defense

Start Date: 2002-03-08

End Date: 2008-04-07

Contract Duration: 2,222 days

Daily Burn Rate: $5.5K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200206!021496!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002402C4065 !A!N! !N! !20020308!20040307!059677856!059677856!059677856!N!MCNALLY INDUSTRIES, INC !340 W BENSON AVE !GRANTSBURG !WI!54840!30450!013!55!GRANTSBURG !BURNETT !WISCONSIN !+000002981061!N!N!000000000000!1020!GUNS, OVER 125 MM THROUGH 150 MM !A5 !WEAPONS !2EBJ!MK45 MOD-O 5.54 GUN MOUNT !332995!E! !3! ! ! ! ! !99990909!B! ! !A! !C!U!J!1!001!N!1B!A!N!F! ! !N!B!N!N! ! !A! !A!A!000!A!B!Y!D! ! ! ! ! !0001!

Place of Performance

Location: GRANTSBURG, BURNETT County, WISCONSIN, 54840

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to MCNALLY INDUSTRIES, LLC for work described as: 200206!021496!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002402C4065 !A!N! !N! !20020308!20040307!059677856!059677856!059677856!N!MCNALLY INDUSTRIES, INC !340 W BENSON AVE !GRANTSBURG !WI!54840!30450!013!55!GRANTSBURG !BURNE… Key points: 1. Contract awarded for critical naval weapon systems, indicating a need for specialized manufacturing capabilities. 2. The award follows a competed action, suggesting a competitive process was used to select the contractor. 3. Fixed-price contract type suggests cost certainty for the government, though potential for contractor profit is present. 4. The duration of the contract (over 6 years) implies a long-term need for these weapon systems or associated support. 5. The contractor, McNally Industries, is based in Wisconsin, potentially indicating regional economic impact. 6. The specific item, MK45 Mod-O 5.54 Gun Mount, points to a niche but essential component within naval defense.

Value Assessment

Rating: fair

The contract value of $12.3 million for the MK45 Mod-O 5.54 Gun Mount appears to be a significant investment in naval armament. Without specific benchmarks for this particular gun mount's components or manufacturing complexity, a direct value-for-money assessment is challenging. However, the fixed-price nature of the contract provides some cost control for the government. Further analysis would require comparing this award to similar procurements for comparable weapon systems or components, considering the contractor's historical performance and overhead.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded following a 'competed action,' indicating that the opportunity was likely advertised and multiple bids were considered. The specific level of competition (number of bidders) is not detailed in the provided data, but the 'full-and-open' designation suggests a broad solicitation. This competitive approach is generally expected to drive better pricing and innovation by allowing various qualified suppliers to present their offerings.

Taxpayer Impact: A competed award generally benefits taxpayers by fostering a market where prices are driven down through rivalry, ensuring the government receives the best possible value for its defense spending.

Public Impact

Naval forces will benefit from the continued availability and potential upgrades of the MK45 Mod-O 5.54 Gun Mount system. The contract supports the production or refurbishment of essential components for naval weapon platforms. The geographic impact is centered in Wisconsin, where McNally Industries is located, potentially creating or sustaining jobs in the region. The defense industrial base, specifically in ordnance manufacturing, is supported by this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for all production complexities.
Dependence on a single contractor for a critical component could pose supply chain risks.
Limited insight into the specific performance metrics or quality control measures beyond the contract award details.

Positive Signals

Award followed a competed process, suggesting a degree of market validation.
Fixed-price contract type offers budget predictability.
Contractor is an established entity, likely possessing relevant manufacturing expertise.
Long contract duration may indicate a stable, ongoing requirement and relationship.

Sector Analysis

This contract falls within the Defense sector, specifically related to ordnance manufacturing. The market for naval weapon systems is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and long development cycles. Spending in this area is driven by national security needs and naval modernization efforts. Comparable spending benchmarks would typically involve other large-scale procurements for naval gun systems or major weapon components, often involving significant R&D and production costs.

Small Business Impact

The provided data indicates that this was not a small business set-aside contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if McNally Industries engages them for specific parts or services. Without further information on subcontracting plans, the direct benefit to the small business ecosystem from this specific award is unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions, quality standards, and delivery schedules. Accountability measures are embedded within the contract's performance clauses and payment schedules. Transparency is facilitated through contract award databases, though detailed operational oversight specifics are usually internal to the agency and contractor.

Related Government Programs

Naval Gun Systems
Ordnance Manufacturing
Defense Procurement
Weapon System Components
Naval Sea Systems Command Contracts

Risk Flags

Potential for supply chain disruption if contractor faces production issues.
Risk of performance degradation if quality control is insufficient.
Long contract duration may mask underlying inefficiencies if not actively managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to MCNALLY INDUSTRIES, LLC. 200206!021496!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002402C4065 !A!N! !N! !20020308!20040307!059677856!059677856!059677856!N!MCNALLY INDUSTRIES, INC !340 W BENSON AVE !GRANTSBURG !WI!54840!30450!013!55!GRANTSBURG !BURNETT !WISCONSIN !+000002981061!N!N!000000000000!1020!GUNS, OVER 125 MM THROUGH 150 MM !A5 !WEAPONS !2EBJ!MK45 MOD-O 5.54 GUN MOUNT !332995!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is MCNALLY INDUSTRIES, 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 $12.3 million.

What is the period of performance?

Start: 2002-03-08. End: 2008-04-07.

What is McNally Industries' track record with similar naval weapon system contracts?

McNally Industries, LLC has a history of performing work related to defense manufacturing. While specific details on prior contracts for MK45 gun mounts are not immediately available in this dataset, their involvement in defense contracts suggests experience with the rigorous standards and requirements of the sector. Further investigation into their contract history with the Department of Defense, particularly with NAVSEA, would reveal the extent of their experience with comparable weapon systems, including performance metrics, past issues, and overall reliability in delivering complex defense hardware. Understanding their past performance on similar fixed-price contracts would provide valuable insight into their capability to manage costs and deliver quality products within budget and schedule.

How does the $12.3 million award compare to the cost of similar naval gun mount procurements?

Benchmarking the $12.3 million award for the MK45 Mod-O 5.54 Gun Mount against similar procurements is challenging without access to a comprehensive database of comparable contracts. The cost is influenced by factors such as the specific model, quantity, technological complexity, and the competitive landscape at the time of award. Generally, large-caliber naval gun systems and their components represent significant investments. To provide a robust comparison, one would need to identify contracts for similar gun mounts (e.g., other variants of the MK45, or comparable systems from other nations or manufacturers), analyze their award values, contract types, and durations, and adjust for inflation and any differences in scope of work. The 'competed action' status suggests a degree of market price discovery, but the exact value proposition requires detailed comparative analysis.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks associated with this contract include potential schedule delays in delivery, quality control issues that could impact weapon system performance, and cost overruns if the fixed-price contract does not adequately account for unforeseen production challenges. Given that this is a specific component for a naval weapon system, any defects or delays could have cascading effects on broader naval readiness and operational capabilities. Furthermore, reliance on a single contractor for critical components can introduce supply chain vulnerabilities. Ensuring robust oversight and performance monitoring by the Defense Contract Management Agency (DCMA) is crucial to mitigate these risks.

How effective is the MK45 Mod-O 5.54 Gun Mount system in current naval operations?

The MK45 Mod-O 5.54 Gun Mount is a standard medium-caliber naval artillery system used by the U.S. Navy and allied forces, primarily for shore bombardment and anti-surface warfare. Its effectiveness is generally considered proven, offering a balance of firepower, range, and reliability suitable for its intended roles. However, like any weapon system, its effectiveness is context-dependent, influenced by the specific mission, the platform it's mounted on, and the evolving threat environment. Modern naval warfare increasingly emphasizes missile-based systems, but gun mounts like the MK45 remain relevant for certain missions, particularly in littoral environments or where precision-guided munitions are not required or feasible. Ongoing upgrades and maintenance, supported by contracts like this, are essential to maintaining its operational effectiveness.

What are the historical spending patterns for MK45 gun mount components or related services?

Historical spending patterns for MK45 gun mount components and related services would likely show consistent investment by the Navy to maintain and modernize its fleet's artillery capabilities. This would include periodic procurements for new mounts, upgrades to existing systems (like the Mod-O to later variants), spare parts, and depot-level maintenance. Spending levels would fluctuate based on shipbuilding schedules, fleet modernization priorities, and budget allocations. Analyzing historical data would reveal trends in contract values, types (e.g., R&D, production, sustainment), and the primary contractors involved over time. This specific $12.3 million award represents a segment of that broader, ongoing investment in naval gunnery systems.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Other Ordnance and Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 340 W BENSON AVE, GRANTSBURG, WI, 54840

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline