Department of Defense awards $133.8M contract for ammunition advanced technology development to Alliant Integrated Defense Com

Contract Overview

Contract Amount: $138,987,224 ($139.0M)

Contractor: Alliant Techsystems Inc

Awarding Agency: Department of Defense

Start Date: 2004-12-01

End Date: 2019-02-13

Contract Duration: 5,187 days

Daily Burn Rate: $26.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 200510!500526!2100!W15QKN!TACOM - PICATINNY !W15QKN05C1171 !A!N! !N! ! !20041201!20081201!133851175!133851175!618705925!N!ALLIANT INTEGRATED DEFENSE COM!4700 NATHAN LN N !MINNEAPOLIS !MN!55442!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000032000000!N!N!000063394088!AD13!RDTE/AMMUNITION-ADV TECH DEV !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !A!U!V!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $139.0 million to ALLIANT TECHSYSTEMS INC for work described as: 200510!500526!2100!W15QKN!TACOM - PICATINNY !W15QKN05C1171 !A!N! !N! ! !20041201!20081201!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 research, development, testing, and evaluation of advanced ammunition technologies. 2. Significant funding allocated to a single contractor, raising questions about competition and cost-effectiveness. 3. Contract duration spans over 14 years, indicating a long-term investment in technology development. 4. The contract falls under the 'Ammunition' sector, a critical area for defense readiness. 5. Performance-based contract type suggests incentives for achieving specific development milestones.

Value Assessment

Rating: fair

The total award amount of $133.8 million over a 14-year period represents a substantial investment. Benchmarking this against similar R&D contracts for advanced ammunition technologies is challenging due to the specialized nature of the work. However, the extended duration and cost-plus incentive fee structure warrant scrutiny to ensure value for money is achieved and that costs remain controlled throughout the contract lifecycle. The absence of a clear ceiling or more defined cost controls could lead to cost overruns if not managed diligently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the data does not specify the number of bids received or the evaluation process. A full and open competition is generally favorable for price discovery, but the long-term nature and specialized R&D focus might limit the pool of highly qualified bidders.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it theoretically drives down costs through market forces. However, the long-term R&D nature of this contract means that the true value for taxpayers will depend on the successful development of advanced technologies that enhance defense capabilities and potentially reduce future procurement costs.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, which will receive advancements in ammunition technology. Services delivered include research, development, testing, and evaluation of new ammunition concepts and prototypes. The geographic impact is primarily national, supporting defense readiness across the United States. Workforce implications include employment opportunities for scientists, engineers, and technicians involved in defense R&D.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration of over 14 years could lead to scope creep or evolving requirements that are not fully accounted for in the initial pricing.
Cost-plus incentive fee contracts can sometimes incentivize contractors to incur higher costs if the incentive structure is not perfectly aligned with desired outcomes.
Lack of specific performance metrics or milestones in the provided data makes it difficult to assess the contractor's progress and ensure accountability.
The specialized nature of advanced ammunition R&D may limit the ability to benchmark costs effectively against comparable projects.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield reasonable pricing.
The contract focuses on critical R&D for defense, potentially leading to significant technological advancements and improved military capabilities.
The contractor, Alliant Integrated Defense Com, is a known entity in the defense sector, implying a level of established expertise.
The use of an incentive fee structure indicates a desire to align contractor performance with specific program goals.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on Research, Development, Testing, and Evaluation (RDTE) for ammunition. The market for defense R&D is characterized by long development cycles, high technical barriers to entry, and significant government investment. Spending in this area is driven by the need for technological superiority and evolving battlefield requirements. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of advanced technology development, but overall defense R&D spending is in the tens of billions annually.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the award was made to a large prime contractor and there is no indication of small business set-asides. While large prime contractors often utilize small business subcontractors, the specific subcontracting plan and its impact on the small business ecosystem are not detailed here. Further analysis would be needed to determine the extent of small business involvement and its economic benefits.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, potentially involving the Defense Contract Management Agency (DCMA) for performance monitoring and the Defense Contract Audit Agency (DCAA) for financial oversight. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is generally maintained through contract awards databases, but detailed project progress and financial breakdowns may be less publicly accessible due to the sensitive nature of defense R&D.

Related Government Programs

Defense Research and Development
Ammunition Procurement
Advanced Weapons Technology
Military Technology Development
Department of Defense Contracts

Risk Flags

Long contract duration may increase risk of obsolescence or changing requirements.
Cost-plus contracts can lead to higher costs if not managed tightly.
Specialized R&D area may limit competitive benchmarking.
Lack of specific performance metrics in summary data hinders assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $139.0 million to ALLIANT TECHSYSTEMS INC. 200510!500526!2100!W15QKN!TACOM - PICATINNY !W15QKN05C1171 !A!N! !N! ! !20041201!20081201!133851175!133851175!618705925!N!ALLIANT INTEGRATED DEFENSE COM!4700 NATHAN LN N !MINNEAPOLIS !MN!55442!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000032000000!N!N!000063394088!AD13!RDTE/AMMUNITION-ADV TECH DEV !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS 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 $139.0 million.

What is the period of performance?

Start: 2004-12-01. End: 2019-02-13.

What is the track record of Alliant Integrated Defense Com (and its predecessors/related entities) in fulfilling similar advanced technology development contracts for the Department of Defense?

Alliant Integrated Defense Com, often associated with Alliant Techsystems Inc. (ATK), has a significant history of working with the Department of Defense on various defense programs, including ammunition development and advanced technologies. ATK, prior to its acquisition by Northrop Grumman, was a major player in munitions and aerospace. Analyzing their past performance on cost-plus incentive fee contracts, particularly those involving R&D, would be crucial. This includes examining their history of meeting cost targets, schedule milestones, and performance specifications. A review of past contract awards, performance reviews, and any documented issues or successes would provide a clearer picture of their capabilities and reliability in executing complex, long-term R&D projects for the DoD.

How does the awarded amount of $133.8 million compare to the typical investment in advanced ammunition technology development by the DoD?

The $133.8 million awarded to Alliant Integrated Defense Com for advanced ammunition technology development over a period of approximately 14 years represents a substantial, but not necessarily outlier, investment. The DoD consistently invests billions annually in Research, Development, Testing, and Evaluation (RDTE) across all defense domains. Specific programs for advanced munitions can range from tens of millions to hundreds of millions of dollars, depending on the scope, complexity, and technological maturity targeted. This particular contract's value should be assessed in the context of its specific objectives: is it for foundational research, prototype development, or scaling up mature technologies? Without more detail on the program's goals, direct comparison is difficult, but it falls within the expected range for significant, long-term R&D initiatives in a critical defense area.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for advanced R&D, and how are they mitigated in this case?

Cost Plus Incentive Fee (CPIF) contracts carry inherent risks, primarily that the contractor may have less incentive to control costs compared to fixed-price contracts, as the government ultimately bears the cost. The 'incentive' aspect aims to mitigate this by rewarding the contractor for meeting or exceeding targets for cost, schedule, or performance. However, poorly defined targets or incentive structures can lead to unintended consequences, such as contractors focusing on easily achievable metrics rather than true innovation or cost savings. For this contract, the specific incentive targets, sharing ratios between government and contractor, and the ceiling price are critical for risk mitigation. Effective government oversight, rigorous performance monitoring, and clear communication are essential to ensure the CPIF structure drives the desired outcomes without excessive cost escalation.

Given the 14-year duration, what mechanisms are in place to ensure the developed technologies remain relevant and meet future defense needs?

The extended 14-year duration of this contract necessitates robust mechanisms for adapting to evolving defense requirements and technological advancements. Key mechanisms likely include: 1) Phased development with regular reviews: The contract should incorporate periodic reviews (e.g., annually or at key milestones) where the program's direction, technological relevance, and alignment with current and projected threats are reassessed. 2) Flexibility clauses: The contract should contain provisions allowing for modifications to scope, objectives, or technical approaches based on changing requirements or new discoveries. 3) Continuous market and threat analysis: The government program office must actively monitor technological trends and geopolitical shifts to guide the contractor's efforts. 4) Milestone-based funding: Tying funding releases to the achievement of specific, relevant milestones ensures that progress is made and that the project remains on a viable path towards meeting future needs.

What is the significance of the NAICS code 332993 (Ammunition (except Small Arms) Manufacturing) in the context of this contract?

The North American Industry Classification System (NAICS) code 332993, 'Ammunition (except Small Arms) Manufacturing,' precisely categorizes the industrial output related to this contract. This code signifies that the contract's objective is focused on the development and potentially the future manufacturing of ammunition types that are not small arms – this could include artillery shells, mortar rounds, missiles, rockets, and related components. For the Department of Defense, this classification is crucial for tracking spending within specific industrial sectors, understanding market dynamics, and identifying key capabilities within the defense industrial base. It helps ensure that procurement and R&D efforts are aligned with national defense requirements for ordnance beyond standard infantry weapons.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) 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: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 4700 NATHAN LN N, MINNEAPOLIS, 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