DoD awards $9.5M contract for explosives manufacturing to Pacific Scientific Energetic Materials Company

Contract Overview

Contract Amount: $9,518,663 ($9.5M)

Contractor: Pacific Scientific Energetic Materials Company (california LLC)

Awarding Agency: Department of Defense

Start Date: 2024-04-18

End Date: 2027-10-08

Contract Duration: 1,268 days

Daily Burn Rate: $7.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DODIC JL53

Place of Performance

Location: HOLLISTER, SAN BENITO County, CALIFORNIA, 95023

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $9.5 million to PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA LLC) for work described as: DODIC JL53 Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price efficiencies. 2. The contract duration of over three years suggests a sustained need for these specialized materials. 3. Performance risk appears moderate given the firm fixed-price structure, which shifts cost overruns to the contractor. 4. The award falls within the broader 'Explosives Manufacturing' sector, indicating a specific niche requirement. 5. Geographic concentration in California for the contractor may have implications for supply chain resilience. 6. Lack of competition limits opportunities for broader market engagement and potential cost savings.

Value Assessment

Rating: fair

The contract's value of $9.5 million over approximately 3.5 years needs further benchmarking against similar sole-source awards for explosives manufacturing. Without competitive bids, it is difficult to definitively assess if the pricing represents fair market value. The firm fixed-price (FFP) contract type is generally favorable for the government as it caps the contractor's potential profit and transfers cost overrun risk. However, the absence of competition means the government may not be benefiting from the most cost-effective solution available in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process. This can potentially lead to higher prices than if multiple companies had vied for the contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing offers, it's harder to ensure the government is receiving the best possible price for these essential explosives manufacturing services.

Public Impact

The Department of the Navy benefits from a dedicated supplier for critical energetic materials. This contract ensures the continued availability of specialized explosives for defense applications. The primary beneficiary is the Department of Defense, which relies on these materials for national security. The contract supports jobs and economic activity within the specialized explosives manufacturing sector in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the selection process due to sole-source nature.
Geographic concentration of the contractor in California could pose supply chain risks.
Limited visibility into alternative manufacturing capabilities or innovations due to no competition.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Contract duration provides stability and ensures a consistent supply of critical materials.
Contractor is located in California, potentially aligning with regional defense industrial base strategies.

Sector Analysis

The explosives manufacturing sector is a highly specialized niche within the broader defense industrial base. Companies operating in this space require significant expertise, stringent safety protocols, and often hold specific government certifications. The market is characterized by high barriers to entry and a limited number of qualified suppliers. This contract for energetic materials fits within this specialized segment, likely supporting specific ordnance or propulsion systems. Comparable spending benchmarks are difficult to establish without more detailed information on the specific type and quantity of explosives.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA LLC), is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within this award. This suggests that the primary benefits of this contract will flow to the prime contractor, with limited direct impact on the small business ecosystem unless the prime contractor voluntarily engages small businesses for support services or components.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is limited due to the sole-source nature of the award. Accountability measures are embedded in the firm fixed-price structure, which incentivizes the contractor to manage costs. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Ordnance Procurement
Energetic Materials Research and Development
Naval Weapons Systems Manufacturing
Defense Industrial Base Support

Risk Flags

Sole-source award raises concerns about price competitiveness.
Lack of competition limits market visibility and potential cost savings.
Geographic concentration may present supply chain vulnerabilities.
Specifics of explosives type and quantity not detailed, hindering granular analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.5 million to PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA LLC). DODIC JL53

Who is the contractor on this award?

The obligated recipient is PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA 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 $9.5 million.

What is the period of performance?

Start: 2024-04-18. End: 2027-10-08.

What is the specific type and quantity of explosives being manufactured under this contract?

The provided data indicates the contract is for 'Explosives Manufacturing' (NAICS 325920) and involves 'Energetic Materials'. However, the specific type, formulation, and precise quantities of explosives are not detailed in the summary data. This information is crucial for understanding the scope of the requirement, assessing the unit cost, and comparing it to market rates for similar materials. Without this specificity, the $9.5 million value is a total contract amount over its duration, making granular cost analysis challenging.

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

The data explicitly states the contract was 'NOT COMPETED' and is a 'SOLE SOURCE'. Federal procurement regulations typically require full and open competition unless specific exceptions apply. Common justifications for sole-source awards include that only one responsible source is available, or that a unique capability or urgent need exists that cannot be met through competition. A detailed justification document, usually found in the contract file, would outline the specific reasons why Pacific Scientific Energetic Materials Company was the only viable option for this requirement.

How does the firm fixed-price (FFP) structure impact risk and pricing for this contract?

A Firm Fixed Price (FFP) contract, as indicated for this award, means the contractor agrees to a total price that is not subject to adjustment based on the contractor's cost experience in performing the work. This structure places the primary risk of cost overruns on the contractor, which is generally favorable for the government. For pricing, the FFP structure incentivizes the contractor to be efficient and control costs to maximize profit. However, in a sole-source scenario, the absence of competition means the government lacks a benchmark to verify if the FFP amount itself represents a competitive market price.

What is the historical spending pattern for similar explosives manufacturing contracts by the Department of the Navy?

The provided data does not include historical spending patterns for similar contracts. To assess this, one would need to query federal procurement databases (like FPDS or USASpending) for contracts awarded by the Department of the Navy (or DoD more broadly) under NAICS code 325920 (Explosives Manufacturing) or related product/service codes over previous fiscal years. Analyzing these patterns would reveal the frequency, value, and competition levels of past awards, providing context for the current $9.5 million sole-source contract and identifying any trends in spending or contractor selection.

What is the track record of Pacific Scientific Energetic Materials Company with government contracts, particularly in explosives manufacturing?

The provided data identifies the contractor as 'PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA LLC)' and the contract type as 'DEFINITIVE CONTRACT'. While this confirms they are an active government contractor, it does not detail their specific track record, past performance evaluations, or history with explosives manufacturing contracts. A comprehensive assessment would require reviewing their contract history, including any past performance reviews, contract modifications, or disputes, to gauge their reliability and expertise in delivering similar products or services.

Are there any alternative suppliers or technologies for these energetic materials that were considered?

Given that this contract was awarded on a sole-source basis ('NOT COMPETED'), it strongly suggests that alternative suppliers or technologies were either not identified, not deemed capable, or not considered viable for this specific requirement at the time of award. The justification for sole-source procurement would typically detail why other options were ruled out. Without access to that justification, it's presumed that the government determined Pacific Scientific Energetic Materials Company possessed unique capabilities or was the only source meeting the stringent requirements.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0010421RK074

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Danaher Corporation

Address: 3601 UNION RD, HOLLISTER, CA, 95023

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

Financial Breakdown

Contract Ceiling: $9,518,663

Exercised Options: $9,518,663

Current Obligation: $9,518,663

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline