DoD awards $30M contract for flares, with KILGORE FLARES COMPANY LLC securing the deal

Contract Overview

Contract Amount: $30,054,153 ($30.1M)

Contractor: Kilgore Flares Company LLC

Awarding Agency: Department of Defense

Start Date: 2016-09-29

End Date: 2025-04-01

Contract Duration: 3,106 days

Daily Burn Rate: $9.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MJU-61A/B

Place of Performance

Location: TOONE, HARDEMAN County, TENNESSEE, 38381

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $30.1 million to KILGORE FLARES COMPANY LLC for work described as: MJU-61A/B Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm fixed price, which shifts cost risk to the contractor. 3. The contract duration is substantial, spanning over 3100 days, indicating a long-term need. 4. The awardee, KILGORE FLARES COMPANY LLC, is a specialized manufacturer in the chemical products sector. 5. The contract falls under the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' NAICS code. 6. The contract is a definitive contract, often used for ongoing or indefinite requirements.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific unit cost data or comparable contract details. The total award amount of approximately $30 million over a multi-year period suggests a steady demand for these specialized chemical products. However, without knowing the quantity of flares or specific types procured, a precise value-for-money assessment is difficult. The firm fixed-price nature of the contract provides cost certainty for the government, but the overall value depends on the efficiency and pricing of the sole awardee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a degree of competition, though the exact number of potential bidders in this specialized market is unknown. A competitive process is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for the required flares. Full and open competition increases the likelihood that multiple companies vied for the contract, potentially driving down costs.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, which will receive essential pyrotechnic devices. The services delivered involve the manufacturing and supply of miscellaneous chemical products, likely flares for military signaling or illumination. The geographic impact is primarily centered around the contractor's location in Tennessee (TN), but the end-use of the flares will be within military operations globally. Workforce implications include job creation and maintenance at KILGORE FLARES COMPANY LLC and its supply chain, particularly in Tennessee.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential price increases over time if not managed effectively.
Reliance on a single awardee for a critical item could pose supply chain risks if the contractor faces production issues.
Limited visibility into the specific types and quantities of flares procured makes it hard to assess the true value.
The specialized nature of the product might limit the pool of potential competitors in future solicitations.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract shifts cost overrun risks to the contractor.
The contractor is based in Tennessee, potentially supporting regional economic activity.
The contract is for a definitive period, providing clear expectations for delivery and duration.

Sector Analysis

The chemical manufacturing sector, particularly the segment focused on specialized pyrotechnics and defense-related products, is characterized by high barriers to entry due to technical expertise, safety regulations, and specialized equipment. This contract falls within the Miscellaneous Chemical Product and Preparation Manufacturing industry. The market size for such specialized defense components is driven by military readiness requirements and technological advancements in signaling and illumination. Comparable spending benchmarks would typically involve analyzing other contracts for similar pyrotechnic devices or chemical defense supplies.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false) and the awardee is not identified as a small business (sb: false). Therefore, there are no direct subcontracting implications or benefits for small businesses stemming from a set-aside provision in this specific award. The focus is on larger, established manufacturers capable of meeting the defense requirements.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Pyrotechnic Devices
Chemical Manufacturing
Defense Procurement
Naval Supplies
Illumination Flares

Risk Flags

Long contract duration
Specialized chemical product
Potential for supply chain disruption

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.1 million to KILGORE FLARES COMPANY LLC. MJU-61A/B

Who is the contractor on this award?

The obligated recipient is KILGORE FLARES COMPANY 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 $30.1 million.

What is the period of performance?

Start: 2016-09-29. End: 2025-04-01.

What is the historical spending pattern for this specific type of flare or similar pyrotechnic devices by the Department of Defense?

Analyzing historical spending for similar pyrotechnic devices by the Department of Defense requires access to detailed procurement data beyond this single contract. Typically, the DoD procures such items through various contract vehicles, including indefinite-delivery/indefinite-quantity (IDIQ) contracts, sole-source awards for highly specialized items, and competitive solicitations. Spending patterns can fluctuate based on geopolitical events, changes in military doctrine, and technological obsolescence of existing equipment. For instance, increased operational tempo in conflict zones or the introduction of new platforms requiring updated signaling capabilities could lead to surges in demand and spending. Conversely, budget constraints or the phasing out of older systems might reduce procurement. Without specific historical data on this contract's predecessors or comparable items, it's difficult to establish a precise trend, but the sustained nature of this award suggests a consistent, long-term requirement.

How does the per-unit cost of these flares compare to industry benchmarks or previous contracts?

Determining the per-unit cost and comparing it to industry benchmarks or previous contracts is challenging with the provided data. The contract value is a total award amount ($30,054,152.85) over a significant duration (3106 days), but the quantity of flares procured is not specified. To calculate a per-unit cost, we would need the total number of units to be delivered. Industry benchmarks for flares vary widely based on type (e.g., signal flares, illumination flares, decoy flares), specifications (e.g., burn time, intensity, color), and quantity. Without these details, any comparison would be speculative. The firm fixed-price nature of the contract implies that the contractor has factored in their costs and desired profit margin, and the government has agreed to this price. A thorough analysis would require access to the solicitation details, bid proposals, and potentially classified information regarding specific performance requirements.

What is KILGORE FLARES COMPANY LLC's track record with government contracts, particularly with the Department of Defense?

KILGORE FLARES COMPANY LLC has a history of securing contracts with the U.S. government, primarily within the defense sector. Publicly available data indicates they have been awarded numerous contracts, often for pyrotechnic devices and related chemical products, consistent with their specialization. Their track record with the Department of Defense (DoD) appears to be substantial, involving various branches and agencies. While this specific contract is a definitive contract for a significant amount, their past performance likely involved smaller, more frequent awards as well as larger, long-term agreements. Assessing their overall track record would involve reviewing their past performance evaluations, any contract disputes or terminations, and their ability to consistently meet delivery schedules and quality standards across multiple awards. The fact that they were awarded this substantial definitive contract suggests a positive assessment of their capabilities and past performance by the Department of the Navy.

What are the specific risks associated with a long-duration definitive contract for chemical products?

Long-duration definitive contracts for chemical products, like this one, carry several inherent risks. Firstly, there's the risk of price escalation over the contract's extended period. While the contract is firm fixed-price, unforeseen increases in raw material costs, labor, or energy prices could impact the contractor's profitability and potentially lead to requests for contract modifications or future pricing adjustments if not adequately hedged. Secondly, there's a risk related to product obsolescence or the emergence of superior technologies. Military requirements can evolve rapidly, and a product procured today might be less effective or superseded by newer technology before the contract expires. Thirdly, supply chain disruptions are a significant concern, especially for specialized chemical components. Geopolitical events, environmental regulations, or issues with sub-tier suppliers could impact the contractor's ability to deliver on time. Finally, maintaining consistent quality control and safety standards over many years for hazardous chemical products requires ongoing vigilance and robust oversight.

How does the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' NAICS code influence the competitive landscape for this contract?

The NAICS code 325998, 'All Other Miscellaneous Chemical Product and Preparation Manufacturing,' is broad and encompasses a wide array of chemical products that don't fit into more specific categories. For this contract, which involves flares, it suggests a niche within this broader classification. The competitive landscape within such a broad code can be varied. It might include companies specializing in pyrotechnics, industrial chemicals, adhesives, or other preparations. However, for a defense-specific item like flares, the actual pool of qualified bidders is likely much smaller, consisting of companies with the necessary security clearances, manufacturing capabilities, and experience in producing defense-grade pyrotechnics. The 'all other' designation means that while the code is broad, the specific product requirement narrows the field considerably, potentially leading to fewer, but highly specialized, competitors.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0010416RK079

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie Industrielle DE Delle

Address: 155 KILGORE DR, TOONE, TN, 38381

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,382,250

Exercised Options: $30,382,250

Current Obligation: $30,054,153

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline