DoD Awards $27M Contract for Ammunition Development to AAI Corp, Raising Value Concerns

Contract Overview

Contract Amount: $26,989,147 ($27.0M)

Contractor: Textron Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2004-04-14

End Date: 2008-11-30

Contract Duration: 1,691 days

Daily Burn Rate: $16.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200407!000720!2100!W15QKN!TACOM - PICATINNY !W15QKN04C1085 !A!N! !N! ! !20040414!20040930!003090198!003090198!001527852!N!AAI CORP !YORK RD & INDUSTRY LA !HUNT VALLEY !MD!21030!18250!005!24!COCKEYSVILLE !BALTIMORE !MARYLAND !+000001168253!N!N!000000000000!AD14!RDTE/AMMUNITION-DEMO/VALID !S1 !SERVICES !000 !* !332994!E! !3! ! ! ! ! !99990909!B! ! !B! !A!N!U!2!011!B! !Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: COCKEYSVILLE, BALTIMORE County, MARYLAND, 21030

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $27.0 million to TEXTRON SYSTEMS CORPORATION for work described as: 200407!000720!2100!W15QKN!TACOM - PICATINNY !W15QKN04C1085 !A!N! !N! ! !20040414!20040930!003090198!003090198!001527852!N!AAI CORP !YORK RD & INDUSTRY LA !HUNT VALLEY !MD!21030!18250!005!24!COCKEYSVILLE !BALT… Key points: 1. The contract's final value significantly exceeded initial estimates, indicating potential cost overruns. 2. Competition was full and open, but the final price may not reflect optimal value. 3. Risk of cost escalation is present due to the Cost Plus Fixed Fee structure. 4. The sector is Defense R&D, specifically ammunition development.

Value Assessment

Rating: questionable

The contract's final value of $26,989,147.02 is substantially higher than the initial award amount, suggesting potential cost growth and a need for closer scrutiny of expenditures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically promotes competitive pricing. However, the significant increase in final value warrants an investigation into whether the pricing remained competitive throughout the contract's lifecycle.

Taxpayer Impact: The substantial increase in contract value suggests taxpayers may be paying more than initially anticipated for the ammunition development services.

Public Impact

Taxpayers may face higher costs due to contract value escalation. The effectiveness of the ammunition development needs to be assessed against the increased expenditure. Oversight is crucial to ensure the final product justifies the significant investment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Overrun Potential
Value for Money Assessment Needed
Contract Type Risk

Positive Signals

Full and Open Competition
Clear Sector Focus

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research, Development, Test, and Evaluation (RDTE) for ammunition. Spending in this area is critical for national security but requires rigorous oversight to ensure cost-effectiveness.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or prime contractors in this award. Further analysis would be needed to determine their participation and impact.

Oversight & Accountability

The significant increase in contract value from the initial award to the final amount necessitates robust oversight to ensure accountability and prevent unnecessary spending. A review of the contract's performance and expenditure justification is recommended.

Related Government Programs

Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Significant Cost Growth
Potential for Inefficient Spending
Need for Post-Award Performance Review
Contract Type May Incentivize Overspending

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.0 million to TEXTRON SYSTEMS CORPORATION. 200407!000720!2100!W15QKN!TACOM - PICATINNY !W15QKN04C1085 !A!N! !N! ! !20040414!20040930!003090198!003090198!001527852!N!AAI CORP !YORK RD & INDUSTRY LA !HUNT VALLEY !MD!21030!18250!005!24!COCKEYSVILLE !BALTIMORE !MARYLAND !+000001168253!N!N!000000000000!AD14!RDTE/AMMUNITION-DEMO/VALID !S1 !SERVICES !000 !* !332994!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is TEXTRON SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2004-04-14. End: 2008-11-30.

What factors contributed to the significant increase in the contract's final value compared to the initial award?

The increase in the contract's final value could be attributed to several factors, including scope creep, unforeseen technical challenges, changes in material costs, or extended performance periods. A detailed review of contract modifications, change orders, and performance reports would be necessary to pinpoint the exact drivers of this cost escalation and assess their justification.

How effectively was the 'full and open competition' process leveraged to ensure the best possible price for the government?

While the contract was initially awarded under full and open competition, the substantial increase in its final value raises questions about whether the competitive advantage was maintained throughout its duration. It's important to analyze if subsequent modifications or contract actions were also competitively sourced or if the initial competition's benefits were eroded over time, potentially leading to a less favorable final price.

What is the assessed return on investment for taxpayers given the final contract value and the delivered ammunition development outcomes?

Assessing the return on investment requires a thorough evaluation of the ammunition development's technical success, its contribution to national security objectives, and whether the final capabilities achieved align with the $26.9 million expenditure. Without detailed performance metrics and an understanding of the program's strategic importance, it is difficult to definitively state the ROI. Further analysis of program outcomes is needed.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 11

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: YORK RD & INDUSTRY LA, HUNT VALLEY, MD, 02

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $234,011

Exercised Options: $234,011

Current Obligation: $26,989,147

Contract Characteristics

Cost or Pricing Data: YES

Timeline