DoD awards $13.3M for Small Arms Ammunition, highlighting potential cost concerns

Contract Overview

Contract Amount: $17,119,776 ($17.1M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2005-09-16

End Date: 2011-10-27

Contract Duration: 2,232 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200512!A06109!1700!N00164!CRANE DIVISION NAVAL SURFACE !N0016405C0026 !A!N! !N! ! !20050916!20060315!133851175!133851175!618705925!N!ALLIANT INTEGRATED DEFENSE COM!4700 NATHAN LN N !MINNEAPOLIS !MN!55442!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000000301445!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332992!E! !3! ! ! ! ! !20200930!B! ! !A! !A!Y!J!2!003!B! !Z!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!B!N! ! ! ! !1724!N00164!0001! !

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $17.1 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: 200512!A06109!1700!N00164!CRANE DIVISION NAVAL SURFACE !N0016405C0026 !A!N! !N! ! !20050916!20060315!133851175!133851175!618705925!N!ALLIANT INTEGRATED DEFENSE COM!4700 NATHAN LN N !MINNEAPOLIS !MN!55442!51730!053!27!PLYMOUTH !HENN… Key points: 1. Contract awarded for ammunition manufacturing, a critical defense component. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. The contract duration is substantial, spanning over 6 years. 4. The sector is defense manufacturing, with specific focus on ammunition. 5. Potential for cost overruns or inefficiencies exists given the contract value and duration.

Value Assessment

Rating: fair

The contract value of $13.3 million for ammunition manufacturing appears reasonable for a multi-year definitive contract. However, without specific unit cost data or benchmarks for similar ammunition types, a precise valuation is difficult. The fixed-price nature offers some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically drives competitive pricing. The use of a definitive contract suggests a clear scope of work, allowing bidders to price accurately. However, the final price is influenced by the specific requirements and market conditions at the time of award.

Taxpayer Impact: The use of full and open competition is generally beneficial for taxpayers as it aims to secure the best value. The $13.3 million award represents a significant but necessary expenditure for defense readiness.

Public Impact

Ensures supply of essential small arms ammunition for military operations. Supports defense industrial base and manufacturing capabilities. Potential impact on readiness if supply chain is disrupted. Price fluctuations in raw materials could affect long-term cost-effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 70 / 10

Warning Flags

Long contract duration may lead to price escalation.
Lack of detailed unit cost data for comparison.
Potential for scope creep or change orders over time.

Positive Signals

Full and open competition should drive value.
Firm fixed price contract provides cost certainty.
Established contractor with experience in defense.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. Spending in this area is driven by military readiness requirements and geopolitical factors. Benchmarks for ammunition contracts vary widely based on type, quantity, and technological sophistication.

Small Business Impact

The contract was awarded to a large business, Alliant Integrated Defense Company. There is no indication of small business participation or subcontracting requirements in the provided data. This suggests limited direct benefit to small businesses from this specific prime contract.

Oversight & Accountability

The Department of Defense, through its contracting agencies like the Defense Contract Management Agency, is responsible for oversight. The definitive contract structure and firm fixed-price terms provide a framework for accountability. However, ongoing monitoring of performance and cost is crucial.

Related Government Programs

Small Arms Ammunition Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to long contract duration.
Lack of detailed unit cost data for robust price analysis.
Dependence on a single large contractor for a critical supply.
Risk of price volatility in raw materials impacting fixed price.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.1 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. 200512!A06109!1700!N00164!CRANE DIVISION NAVAL SURFACE !N0016405C0026 !A!N! !N! ! !20050916!20060315!133851175!133851175!618705925!N!ALLIANT INTEGRATED DEFENSE COM!4700 NATHAN LN N !MINNEAPOLIS !MN!55442!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000000301445!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332992!E! !3! ! ! ! ! !202

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.1 million.

What is the period of performance?

Start: 2005-09-16. End: 2011-10-27.

What is the unit cost of the ammunition and how does it compare to industry benchmarks for similar products?

The provided data does not include specific unit cost information for the ammunition. The total contract value is $13.3 million over a duration of 2232 days (approximately 6 years). Without knowing the exact quantity of ammunition procured, it is impossible to calculate a unit cost or compare it against industry benchmarks. Further analysis would require detailed quantity breakdowns and pricing per unit.

What are the primary risks associated with a long-term, firm-fixed-price contract for ammunition?

A primary risk is that market prices for raw materials or manufacturing could increase significantly over the contract's multi-year duration, potentially leading to the contractor absorbing losses or seeking costly change orders. Conversely, if prices decrease, the government might overpay. Inflationary pressures and unforeseen production challenges also pose risks to the fixed price.

How effectively does this contract ensure the government receives high-quality ammunition at a fair price over its lifespan?

The contract's effectiveness hinges on the initial price negotiation and ongoing oversight. Full and open competition is a positive indicator for fair pricing. However, the long duration and lack of detailed unit cost data make it challenging to definitively assess long-term value. The firm-fixed-price structure provides cost certainty but could lead to suboptimal value if market conditions shift unfavorably.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 4700 NATHAN LN N, PLYMOUTH, MN, 55442

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline