DoD awards $428M contract for explosives manufacturing to EaglePicher Technologies LLC

Contract Overview

Contract Amount: $4,282,400 ($4.3M)

Contractor: Eaglepicher Technologies LLC

Awarding Agency: Department of Defense

Start Date: 2023-12-19

End Date: 2026-11-30

Contract Duration: 1,077 days

Daily Burn Rate: $4.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DODIC: JN25

Place of Performance

Location: JOPLIN, JASPER County, MISSOURI, 64801

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $4.3 million to EAGLEPICHER TECHNOLOGIES LLC for work described as: DODIC: JN25 Key points: 1. Contract value of $428.24 million represents significant investment in critical defense materials. 2. Sole-source award after exclusion of sources suggests limited market options or specialized capabilities. 3. Fixed-price contract type aims to control costs and provide predictability for the government. 4. Contract duration of over 3 years indicates a sustained need for these explosives. 5. Performance location in Missouri highlights regional economic impact and specialized manufacturing base. 6. The award falls under the 'Explosives Manufacturing' NAICS code, indicating a specific industrial focus.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific per-unit cost data or comparable contract details. However, the substantial dollar amount suggests a significant procurement for specialized defense materials. The firm fixed-price structure is generally favorable for cost control, but the 'after exclusion of sources' competition type may limit the government's ability to secure the lowest possible price compared to a fully open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This designation implies that while the initial solicitation may have been open, specific circumstances led to the exclusion of certain sources, resulting in a de facto sole-source award. The exact reasons for exclusion are not detailed but could stem from unique technical requirements, proprietary technology, or national security considerations. The limited competition likely means fewer bidders were considered, potentially impacting price negotiation.

Taxpayer Impact: The limited competition for this essential defense material may result in higher costs for taxpayers compared to a scenario with broader market participation. It also suggests a reliance on a specific supplier for critical national security needs.

Public Impact

The Department of the Navy benefits from a secured supply of essential explosives for its operations. This contract ensures the continued production of explosives critical for national defense. The geographic impact is concentrated in Missouri, supporting local jobs and the regional manufacturing sector. Workforce implications include the potential for skilled labor employment in specialized manufacturing roles within Missouri.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pressure, potentially leading to higher prices.
Lack of transparency regarding source exclusion criteria raises questions about fairness.
Dependence on a single contractor for critical explosives poses supply chain risk.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Long-term contract duration ensures supply continuity for defense needs.
Award to an established company like EaglePicher suggests a focus on proven capabilities.

Sector Analysis

The defense industrial base relies heavily on specialized manufacturers for critical materials like explosives. This contract falls within the broader 'Chemical and Product Manufacturing' sector, specifically focusing on explosives. The market for such specialized defense components is often consolidated due to high barriers to entry, including stringent regulatory requirements, specialized equipment, and intellectual property. Comparable spending benchmarks would typically be found within other large, sole-source or limited-competition defense contracts for similar high-risk, high-demand materials.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). Given the specialized nature of explosives manufacturing and the likely limited number of qualified large contractors, subcontracting opportunities for small businesses may be limited. However, EaglePicher Technologies LLC might engage small businesses for support services or component supply, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified explosives. Transparency is somewhat limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Ammunition Procurement
Naval Ordnance Production
Explosives and Propellants Manufacturing
Defense Industrial Base Sustainment

Risk Flags

Sole-source award raises concerns about competition and potential price inflation.
Dependence on a single contractor for critical materials poses supply chain risk.
National security implications of explosives manufacturing require stringent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.3 million to EAGLEPICHER TECHNOLOGIES LLC. DODIC: JN25

Who is the contractor on this award?

The obligated recipient is EAGLEPICHER TECHNOLOGIES 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 $4.3 million.

What is the period of performance?

Start: 2023-12-19. End: 2026-11-30.

What is EaglePicher Technologies LLC's track record with the Department of Defense, particularly in explosives manufacturing?

EaglePicher Technologies LLC has a long-standing history of supplying critical components and materials to the U.S. military, including batteries, energetic materials, and other specialized products. Their involvement in explosives manufacturing is a key part of their defense portfolio. While specific details of past performance on explosives contracts are not provided here, the company's sustained presence as a DoD supplier suggests a generally positive track record. However, a deeper dive into contract performance reports, past performance questionnaires, and any documented issues or commendations would be necessary for a comprehensive assessment of their reliability and quality in this specific domain.

How does the $428.24 million contract value compare to historical spending on similar explosives manufacturing contracts?

Without access to a comprehensive database of historical explosives manufacturing contracts, a direct comparison is difficult. However, $428.24 million is a substantial sum, indicating a significant procurement likely addressing a critical or large-scale need for explosives. Large sole-source or limited-competition contracts for specialized defense materials often reach into the hundreds of millions of dollars due to the high cost of materials, specialized facilities, rigorous testing, and the limited number of qualified manufacturers. This award suggests a major commitment by the Navy to secure its supply chain for these specific energetic materials over the contract's duration.

What are the primary risks associated with a sole-source award for critical defense materials like explosives?

The primary risks associated with a sole-source award for critical defense materials include reduced price competition, potentially leading to higher costs for the government and taxpayers. There's also an increased reliance on a single supplier, which creates supply chain vulnerability; any disruption at the contractor's facility (e.g., production issues, natural disasters, labor disputes) could have significant national security implications. Furthermore, a lack of competition can sometimes stifle innovation, as the contractor may face less pressure to improve processes or develop more cost-effective solutions. Ensuring robust oversight and performance management becomes even more critical in sole-source situations.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply about the procurement process?

This designation suggests that the initial procurement strategy aimed for broad competition. However, specific criteria or circumstances led to the exclusion of certain potential bidders before the final award. This could occur if only one or a few companies possessed the unique technical capabilities, proprietary technology, security clearances, or specific certifications required for the explosives. It implies that while the government explored broader options, the market realities or specific requirements narrowed the field significantly, leading to a limited number of actual competitors or a single awardee. The justification for excluding sources would typically be documented.

How does the contract's firm fixed-price (FFP) structure benefit the government in this context?

A firm fixed-price (FFP) contract structure is generally advantageous for the government, especially in procurements where the scope of work is well-defined, as is often the case with manufacturing specific materials. Under an FFP contract, the contractor assumes most of the risk for cost overruns. This means the price is set at the outset and does not change unless the contract terms are formally modified. For the government, this provides budget certainty and predictability, as they know the exact cost of the explosives. It incentivizes the contractor to manage their costs efficiently to maximize profit, potentially leading to better value if they can control their expenses effectively.

What is the significance of the NAICS code 325920 (Explosives Manufacturing) in relation to this contract?

The North American Industry Classification System (NAICS) code 325920 specifically identifies establishments primarily engaged in the manufacturing of explosives, including ammunition and fireworks. Assigning this code to the contract signifies that the procurement is directly related to the core business activities of explosives production. It helps categorize this spending within the broader industrial landscape, allowing for comparisons with other companies and contracts within the same sector. This specificity ensures that the contract is being awarded to firms with the requisite expertise, facilities, and regulatory compliance necessary for handling and manufacturing hazardous explosive materials.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0010422RK093

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1215 W C ST, JOPLIN, MO, 64801

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: $4,282,400

Exercised Options: $4,282,400

Current Obligation: $4,282,400

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $645,721

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline