DoD Awards $59M for Small Arms Ammunition Manufacturing, Raising Value Concerns
Contract Overview
Contract Amount: $59,039,849 ($59.0M)
Contractor: Conco, Inc.
Awarding Agency: Department of Defense
Start Date: 2004-09-24
End Date: 2010-06-09
Contract Duration: 2,084 days
Daily Burn Rate: $28.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200412!001407!2100!W15QKN!TACOM - PICATINNY !W15QKN04C1139 !A!N! !N! ! !20040924!20080930!623757762!623757762!623757762!N!CONCO, INC !4000 OAKLAWN DRIVE !LOUISVILLE !KY!40219!48000!111!21!LOUISVILLE !JEFFERSON !KENTUCKY !+000009700162!N!N!000000000000!J066!MAINT & REPAIR OF EQ/INSTRUMENTS & LAB EQUIPMENT !A8C!CONTAINERS AND HANDLING EQUIPMENT !000 !* !332992!E! !3! ! ! ! ! !99990909!B! ! !B! !A!N!J!2!003!B! !Z!N!Z! ! !N!B!N!N! ! !A! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !
Place of Performance
Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40201
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $59.0 million to CONCO, INC. for work described as: 200412!001407!2100!W15QKN!TACOM - PICATINNY !W15QKN04C1139 !A!N! !N! ! !20040924!20080930!623757762!623757762!623757762!N!CONCO, INC !4000 OAKLAWN DRIVE !LOUISVILLE !KY!40219!48000!111!21!LOUISVILLE !JEFF… Key points: 1. Contract awarded for Small Arms Ammunition Manufacturing, a critical defense sector. 2. High contract value of $59M warrants scrutiny for potential overspending. 3. Full and open competition was utilized, suggesting a competitive bidding process. 4. The contract duration of 2084 days indicates a long-term need for these services.
Value Assessment
Rating: questionable
The contract value of $59M for small arms ammunition manufacturing appears high given the reported base value of $48,000 and a potential ceiling of $62.3M. Further analysis is needed to understand the cost drivers and if this represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically promotes price discovery and competitive pricing. However, the significant difference between the initial award amount and the potential ceiling warrants investigation into the pricing structure.
Taxpayer Impact: The substantial value of this contract means taxpayers are funding a significant expenditure. Ensuring the price is competitive and reflects true market value is crucial for fiscal responsibility.
Public Impact
Ensures supply of essential small arms ammunition for military operations. Potential for cost overruns could impact overall defense budget allocation. Supports manufacturing jobs within the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value relative to initial award.
- Long contract duration.
- Potential for cost escalation.
Positive Signals
- Full and open competition.
- Critical defense supply chain.
Sector Analysis
This contract falls within the Defense sector, specifically related to ammunition manufacturing. Spending benchmarks in this area can vary widely based on quantity, type, and technological advancements. The $59M value is significant for this niche.
Small Business Impact
The contract does not indicate any specific set-asides for small businesses. While the prime contractor is CONCO, INC., further investigation would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The contract was awarded by the Department of the Army. Oversight would typically involve contract performance monitoring, quality assurance, and financial audits to ensure compliance and value for money.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- High contract ceiling value.
- Long contract duration.
- Potential for cost overruns.
- Lack of specific unit cost data for benchmarking.
- Risk of technological obsolescence.
Tags
small-arms-ammunition-manufacturing, department-of-defense, ky, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.0 million to CONCO, INC.. 200412!001407!2100!W15QKN!TACOM - PICATINNY !W15QKN04C1139 !A!N! !N! ! !20040924!20080930!623757762!623757762!623757762!N!CONCO, INC !4000 OAKLAWN DRIVE !LOUISVILLE !KY!40219!48000!111!21!LOUISVILLE !JEFFERSON !KENTUCKY !+000009700162!N!N!000000000000!J066!MAINT & REPAIR OF EQ/INSTRUMENTS & LAB EQUIPMENT !A8C!CONTAINERS AND HANDLING EQUIPMENT !000 !* !332992!E! !3! ! ! ! ! !999
Who is the contractor on this award?
The obligated recipient is CONCO, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $59.0 million.
What is the period of performance?
Start: 2004-09-24. End: 2010-06-09.
What factors justify the significant increase from the initial award amount to the contract's ceiling?
The substantial difference between the initial award of $48,000 and the ceiling of $62,375,776 suggests potential for significant future orders or escalation clauses. Understanding the specific terms, such as quantity variations, material cost adjustments, or the inclusion of options, is crucial to justifying this wide range and ensuring it aligns with anticipated needs and market conditions.
How does the per-unit cost of this ammunition compare to industry benchmarks?
Without specific unit quantities and detailed cost breakdowns, a direct per-unit cost comparison is challenging. However, given the overall contract value and the nature of small arms ammunition, a thorough analysis would involve benchmarking against similar government contracts and commercial pricing for comparable ammunition types to identify any anomalies or potential inefficiencies.
What is the risk of obsolescence or technological displacement for this ammunition over the contract's duration?
The contract spans from 2004 to 2010, a period where military technology can evolve. The risk of obsolescence depends on the specific type of ammunition and the pace of technological advancement in small arms. If newer, more effective, or standardized ammunition types emerge, the procured ammunition could become less relevant, impacting its long-term utility and value.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
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
Address: 4000 OAKLAWN DRIVE, LOUISVILLE, KY, 03
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $12,447,872
Exercised Options: $12,447,872
Current Obligation: $59,039,849
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2004-09-24
Current End Date: 2010-06-09
Potential End Date: 2010-06-09 00:00:00
Last Modified: 2010-08-13
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