Navy awards $37M for 12 Searanger gun systems, spares, and training to American Rheinmetall Systems LLC

Contract Overview

Contract Amount: $37,007,915 ($37.0M)

Contractor: American Rheinmetall Systems LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-29

End Date: 2026-12-30

Contract Duration: 1,918 days

Daily Burn Rate: $19.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 20MM SEARANGER GUN SYSTEMS (QTY: 12), SPARES, TRAINING, HAT TEST

Place of Performance

Location: BIDDEFORD, YORK County, MAINE, 04005

State: Maine Government Spending

Plain-Language Summary

Department of Defense obligated $37.0 million to AMERICAN RHEINMETALL SYSTEMS LLC for work described as: 20MM SEARANGER GUN SYSTEMS (QTY: 12), SPARES, TRAINING, HAT TEST Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract includes significant provisions for spares and training, indicating a focus on long-term operational readiness. 3. The duration of the contract (over 5 years) suggests a sustained need for these systems. 4. The firm-fixed-price structure aims to control costs for the government. 5. The procurement is for small arms, ordnance, and accessories, a niche manufacturing sector. 6. The contract is being performed in Maine, potentially impacting the local economy and workforce.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable sole-source procurements for similar specialized weapon systems. The total award of approximately $37 million for 12 systems, spares, and training suggests a significant per-unit cost, but without detailed specifications or market data for these specific Searanger gun systems, a definitive value-for-money assessment is difficult. The firm-fixed-price contract type is generally favorable for cost control, but the absence of competition limits the government's ability to ensure the lowest possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific product or service is only available from a single source, or when there are compelling reasons to bypass the competitive process, such as urgent needs or unique capabilities. The lack of competition means that the government did not benefit from the price discovery and potential cost savings that a competitive bidding process could have provided.

Taxpayer Impact: Taxpayers may have paid a higher price than they would have in a competitive environment. The absence of multiple bids limits the government's leverage to negotiate the best possible terms and pricing.

Public Impact

The U.S. Navy benefits from the acquisition of advanced Searanger gun systems, enhancing its maritime defense capabilities. The contract delivers 12 specialized gun systems, along with essential spares and training, ensuring operational readiness. The geographic impact is concentrated in Maine, where the contractor is located, potentially creating or sustaining jobs in the region. The procurement supports the defense manufacturing sector, contributing to the industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the sole-source justification makes it difficult to assess necessity.
High per-unit cost for specialized weapon systems requires careful justification and oversight.
Long contract duration necessitates ongoing monitoring of performance and cost.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Inclusion of spares and training indicates a comprehensive approach to system sustainment and readiness.
Contract awarded to a known entity (American Rheinmetall Systems LLC) suggests a potentially established relationship and understanding of requirements.

Sector Analysis

The defense manufacturing sector, specifically focusing on small arms, ordnance, and accessories, is characterized by high technological barriers to entry and specialized production capabilities. This contract fits within the broader defense procurement landscape, where the U.S. military invests heavily in advanced weaponry to maintain its technological edge. Comparable spending benchmarks are difficult to establish due to the proprietary nature of such systems and the limited number of qualified manufacturers. However, the overall defense budget represents a significant portion of federal spending, with substantial allocations for weapon system acquisition and sustainment.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the prime contractor is American Rheinmetall Systems LLC, a known entity in the defense industry. There is no explicit information provided regarding subcontracting plans or opportunities for small businesses within this specific award. Therefore, the direct impact on the small business ecosystem from this prime contract is likely minimal, unless specific subcontracting requirements are mandated and fulfilled by the prime contractor.

Oversight & Accountability

Oversight for this contract would 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 mechanisms. Transparency is limited due to the sole-source nature of the award. Accountability measures would be tied to the firm-fixed-price terms and performance requirements outlined in the contract. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Surface Warfare
Ordnance and Ammunition Procurement
Maritime Weapon Systems
Defense Industrial Base
Foreign Military Sales (if applicable)

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for high per-unit cost
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.0 million to AMERICAN RHEINMETALL SYSTEMS LLC. 20MM SEARANGER GUN SYSTEMS (QTY: 12), SPARES, TRAINING, HAT TEST

Who is the contractor on this award?

The obligated recipient is AMERICAN RHEINMETALL SYSTEMS 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 $37.0 million.

What is the period of performance?

Start: 2021-09-29. End: 2026-12-30.

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

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this determination is not detailed in the provided data. Typically, sole-source justifications are based on factors such as the existence of only one responsible source capable of providing the required supplies or services, urgent and compelling needs that preclude full and open competition, or specific circumstances authorized by law or regulation. Without the official justification document, it is impossible to ascertain the precise rationale. This lack of transparency can raise concerns about whether competition was genuinely precluded or if alternative solutions were adequately explored.

How does the per-unit cost of the Searanger gun systems compare to similar systems in the market or historical Navy procurements?

A precise per-unit cost comparison is not feasible with the provided data. The total award is $37,007,914.89 for 12 Searanger gun systems, plus spares and training. This yields a nominal system cost of approximately $3,083,992.91 per unit before accounting for the additional costs of spares and training. However, 'spares' and 'training' are often bundled into a single line item, making it difficult to isolate the exact cost of the gun systems themselves. Furthermore, the Searanger gun system is a specialized piece of equipment, and direct comparisons to other weapon systems may not be appropriate due to differences in capabilities, technology, and intended use. Without access to detailed specifications, performance metrics, and pricing data for comparable systems, a robust benchmark analysis cannot be performed.

What are the key performance indicators (KPIs) and delivery milestones outlined in the contract?

The provided data does not specify the key performance indicators (KPIs) or detailed delivery milestones for this contract. It does indicate a start date of September 29, 2021, and an end date of December 30, 2026, with a duration of 1918 days. This suggests a phased delivery and training schedule over the contract period. Typically, contracts of this nature would include specific requirements for system performance, reliability, acceptance testing, and delivery schedules for the gun systems, spares, and training modules. These details are usually found in the contract's statement of work (SOW) or performance work statement (PWS), which are not included in the summary data.

What is the track record of American Rheinmetall Systems LLC in delivering similar defense systems to the U.S. military?

American Rheinmetall Systems LLC is part of the global Rheinmetall AG, a defense contractor with a long history of supplying military equipment. While specific details on their track record for the 'Searanger gun systems' are not provided, the company is known for producing a range of defense products, including weapon systems, ammunition, and vehicle components. Their involvement in defense contracts suggests they have experience meeting military specifications and delivery requirements. However, a thorough assessment would require reviewing their past performance evaluations, any contract disputes or terminations, and their success rate in delivering comparable complex weapon systems on time and within budget to various branches of the U.S. military.

What are the potential risks associated with the long-term sustainment and maintenance of these Searanger gun systems?

Potential risks associated with the long-term sustainment and maintenance of these Searanger gun systems include the availability and cost of spare parts, the need for specialized technical expertise for repairs, and the potential for obsolescence of technology over the system's lifecycle. Since the contract includes provisions for spares and training, it suggests an awareness of these sustainment needs. However, the sole-source nature of the initial procurement could extend to future sustainment contracts, potentially limiting competition for maintenance and repair services as well. Ensuring long-term cost-effectiveness will depend on proactive inventory management of spares, ongoing technical training for Navy personnel or authorized technicians, and potential upgrade paths to mitigate technological obsolescence.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0017421R0013

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: American Rheinmetall Defense, Inc.

Address: 15 MORIN ST STE B, BIDDEFORD, ME, 04005

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $37,222,432

Exercised Options: $37,007,915

Current Obligation: $37,007,915

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline