Army awards $133.8M contract for 75mm-125mm ammunition to Alliant Techsystems Inc

Contract Overview

Contract Amount: $50,021,545 ($50.0M)

Contractor: Alliant Techsystems Inc

Awarding Agency: Department of Defense

Start Date: 2006-03-29

End Date: 2013-10-06

Contract Duration: 2,748 days

Daily Burn Rate: $18.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200607!600629!2100!W15QKN!TACOM - PICATINNY !W15QKN06C0139 !A!N! !N! ! !20060329!20061130!133851175!133851175!618705925!N!ALLIANT TECHSYSTEMS INC !4700 NATHAN LN N !PLYMOUTH !MN!55442!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000010529310!N!N!000010529310!1315!AMMUNITION, 75 MM THROUGH 125 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !332993!E! !1! ! ! ! ! !99990909!B! ! !A! !C!U!J!2!001!N!3A!Z!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $50.0 million to ALLIANT TECHSYSTEMS INC for work described as: 200607!600629!2100!W15QKN!TACOM - PICATINNY !W15QKN06C0139 !A!N! !N! ! !20060329!20061130!133851175!133851175!618705925!N!ALLIANT TECHSYSTEMS INC !4700 NATHAN LN N !PLYMOUTH !MN!55442!51730!053!27!PLYMOUTH !HENN… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $133.8 million over approximately 7.5 years indicates significant investment in ammunition. 3. The fixed-price nature of the contract shifts some risk to the contractor. 4. Ammunition manufacturing is a critical component of defense readiness. 5. The contract duration of over 7 years suggests a long-term need for these specific ammunition types. 6. The award to a single contractor, Alliant Techsystems Inc., warrants a review of market concentration.

Value Assessment

Rating: good

The contract value of $133.8 million for ammunition manufacturing over 2748 days (approximately 7.5 years) appears reasonable given the scope. Without specific unit cost data or comparisons to similar contracts for this precise caliber range, a definitive value-for-money assessment is challenging. However, the duration and total value suggest a substantial procurement. Benchmarking against historical ammunition contracts of similar size and complexity would provide further insight into pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that multiple bidders were likely considered, but specific sources may have been excluded based on certain criteria. The fact that it was competed broadly is positive for price discovery. The number of bidders and the specific reasons for any exclusions would provide a clearer picture of the competitive landscape and its impact on the final price.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering lower prices and encouraging innovation among defense contractors.

Public Impact

The primary beneficiaries are the U.S. Army, ensuring a supply of critical ammunition for its operations. The contract delivers ammunition in the 75mm through 125mm caliber range, essential for various combat vehicles and systems. The geographic impact is primarily national, supporting U.S. military readiness, with potential for localized economic impact in areas where Alliant Techsystems Inc. operates. Workforce implications include potential job creation or retention within Alliant Techsystems Inc. and its supply chain, particularly in manufacturing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for over-reliance on a single supplier for this specific ammunition range.
Lack of detailed performance metrics in the provided data makes it difficult to assess contractor efficiency.
The exclusion of sources, even in a full and open competition, warrants scrutiny to ensure fairness and prevent market manipulation.

Positive Signals

Awarded through a competitive process, suggesting potential for good pricing.
The firm fixed-price contract type aligns incentives for cost control with the contractor.
Long-term contract duration indicates a stable demand and potential for economies of scale.

Sector Analysis

The defense sector, specifically ammunition manufacturing, is a critical but often consolidated industry. Companies like Alliant Techsystems Inc. (now part of Northrop Grumman) are major players. The market size for such specialized ammunition is driven by military demand and geopolitical factors. This contract fits within the broader category of ordnance and munitions manufacturing, a segment that requires significant capital investment and adherence to stringent quality and safety standards. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by the Department of Defense.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications mandated by a small business set-aside. However, Alliant Techsystems Inc., as a large prime contractor, may engage small businesses as subcontractors for components or services, contributing to the broader small business ecosystem. The extent of this subcontracting is not detailed in the provided information.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and potentially the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Ammunition Procurement
Army Ordnance and Munitions Programs
Defense Industrial Base - Ammunition Manufacturing
Tactical Vehicle Ammunition
Artillery and Cannon Ammunition

Risk Flags

Long-term sole-source potential after initial competition
Lack of detailed performance metrics
Potential for supply chain concentration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.0 million to ALLIANT TECHSYSTEMS INC. 200607!600629!2100!W15QKN!TACOM - PICATINNY !W15QKN06C0139 !A!N! !N! ! !20060329!20061130!133851175!133851175!618705925!N!ALLIANT TECHSYSTEMS INC !4700 NATHAN LN N !PLYMOUTH !MN!55442!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000010529310!N!N!000010529310!1315!AMMUNITION, 75 MM THROUGH 125 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !332993!E! !1! ! ! ! ! !999

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 $50.0 million.

What is the period of performance?

Start: 2006-03-29. End: 2013-10-06.

What is the historical spending pattern for this specific type of ammunition (75mm-125mm) by the Department of the Army?

Analyzing historical spending for 75mm-125mm ammunition requires accessing detailed procurement data over multiple fiscal years. This contract, awarded in 2006 for $133.8 million with an end date in 2013, represents a significant but singular data point. To establish a pattern, one would need to aggregate data on similar contracts, noting quantities, unit prices, and awardees. Factors influencing historical spending include operational tempo, inventory levels, modernization programs, and budget allocations. Without a broader dataset, it's difficult to determine if this $133.8 million award represents an increase, decrease, or stable level of investment compared to prior or subsequent periods for this specific caliber range.

How does the per-unit cost of this ammunition compare to market rates or similar government contracts?

Determining the per-unit cost requires knowing the total quantity of ammunition procured under this $133.8 million contract. The provided data specifies the caliber range (75mm-125mm) and the North American Industry Classification System (NAICS) code 332993 (Ammunition (except Small Arms) Manufacturing), but not the exact quantity or specific types of rounds. Without this quantity, a per-unit cost cannot be calculated. If the quantity were known, it could be compared to publicly available pricing data for similar munitions from other government contracts or commercial price lists, adjusted for volume and specific technical requirements. The 'cpu' field is marked N/A, indicating this benchmark was not readily available or calculable from the source data.

What is Alliant Techsystems Inc.'s track record in fulfilling large defense contracts, particularly for munitions?

Alliant Techsystems Inc. (ATK), prior to its acquisition by Northrop Grumman, had a substantial track record in defense manufacturing, including a significant presence in munitions. They were known for producing a wide range of ordnance, from small-caliber ammunition to larger systems. Their history includes numerous large contracts with the Department of Defense across various branches. Evaluating their performance on specific contracts like this one would involve reviewing past performance evaluations, on-time delivery rates, quality control metrics, and any contract disputes or modifications. Generally, ATK was considered a reliable, albeit sometimes costly, supplier in the defense sector.

What are the potential risks associated with a single award contract of this magnitude for critical defense supplies?

A single award contract, even if competed initially, carries inherent risks. These include potential supply chain disruptions if the sole contractor faces production issues, financial instability, or geopolitical challenges. It can also lead to reduced price competition in future procurements if the market becomes concentrated. For critical defense supplies like ammunition, reliance on a single source can create vulnerabilities in national security readiness. The government may mitigate these risks through robust contract oversight, maintaining strategic reserves, and encouraging diversification of the supplier base over the long term.

How does the duration of this contract (over 7 years) impact program effectiveness and cost control?

A long-duration contract like this one (2748 days) offers potential benefits for program effectiveness and cost control. It provides the contractor with stability and predictability, allowing for long-term planning, investment in production capabilities, and potentially achieving economies of scale. This can lead to more consistent supply and potentially lower unit costs over time compared to multiple short-term contracts. However, it also carries risks. Market conditions, technological advancements, or changes in military requirements could make the contracted items obsolete or less desirable during the contract's term. Without flexibility or appropriate price adjustment clauses, the government might be locked into unfavorable terms or acquire matériel that no longer meets evolving needs.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4700 NATHAN LN N, PLYMOUTH, MN, 03

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline