Department of Defense awards $16M contract for crowd dispersal munitions, with no competition

Contract Overview

Contract Amount: $16,049,048 ($16.0M)

Contractor: Defense Technology, LLC

Awarding Agency: Department of Defense

Start Date: 2006-07-28

End Date: 2030-12-25

Contract Duration: 8,916 days

Daily Burn Rate: $1.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M1029, 40MM NON-LETHAL CROWD DISPERSAL

Place of Performance

Location: CASPER, NATRONA County, WYOMING, 82601, UNITED STATES OF AMERICA

State: Wyoming Government Spending

Plain-Language Summary

Department of Defense obligated $16.0 million to DEFENSE TECHNOLOGY, LLC for work described as: M1029, 40MM NON-LETHAL CROWD DISPERSAL Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. Long contract duration (over 24 years) suggests a potential for price escalation and reduced flexibility. 3. The specific product, non-lethal crowd dispersal munitions, has significant public safety implications. 4. Lack of competition limits opportunities for other vendors and potentially stifles innovation. 5. The contract's value, while substantial, needs benchmarking against similar non-lethal munition procurements. 6. Performance context is limited due to the sole-source nature and lack of comparative data.

Value Assessment

Rating: questionable

The contract value of $16.05 million for crowd dispersal munitions is difficult to assess without comparable data due to its sole-source nature. The long duration of the contract, spanning over 24 years, also raises concerns about potential price increases over time and whether the government is securing the best possible value. Benchmarking against similar non-lethal munition contracts would be necessary to determine if the pricing is competitive. Without this information, it's challenging to definitively state the value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. This indicates that the Department of Defense likely identified a single vendor, DEFENSE TECHNOLOGY, LLC, as the only source capable of meeting the requirement. The lack of competition means there were no other bids to compare against, which can lead to higher prices and less favorable terms for the government.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the absence of competitive bidding. Without multiple offers, the government has less leverage to negotiate lower prices, potentially resulting in a less efficient use of public funds.

Public Impact

The primary beneficiaries are law enforcement and military units requiring non-lethal crowd control capabilities. The contract delivers essential munitions for managing public gatherings and potential civil unrest. The geographic impact is national, as these munitions can be deployed by federal agencies across the United States. Workforce implications are likely limited to the manufacturing and supply chain of DEFENSE TECHNOLOGY, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to higher costs for taxpayers.
Extended contract duration (over 24 years) increases risk of price escalation and obsolescence.
Lack of transparency in the procurement process due to no-bid award.
Potential for vendor lock-in given the long-term nature of the contract.
Limited opportunities for small businesses to participate as subcontractors without a competitive process.

Positive Signals

Ensures a consistent supply of critical non-lethal crowd dispersal munitions.
The contract is with a known entity, potentially reducing initial onboarding risks.
Long duration provides stability for the supplier, potentially ensuring continued availability.
Fixed-price contract type offers some cost certainty for the government.

Sector Analysis

The defense industrial base includes a wide array of specialized manufacturers producing munitions and defense equipment. This contract falls within the small arms ammunition manufacturing sector, specifically focusing on non-lethal crowd dispersal agents. The market for such specialized munitions is often characterized by a limited number of qualified suppliers due to stringent regulatory requirements and technical expertise needed. Comparable spending benchmarks are difficult to establish without more specific product details and competitive data.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific procurement. The impact on the small business ecosystem is likely minimal, as the primary contract is with a single, presumably larger, entity.

Oversight & Accountability

Oversight mechanisms for this contract would primarily fall under the Department of Defense's contract management and inspection processes. Accountability measures would be tied to the delivery of specified munitions according to the contract terms. Transparency is limited due to the sole-source award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Munitions Procurement
Non-Lethal Weapons Systems
Law Enforcement Equipment Contracts
Small Arms Ammunition Manufacturing

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for price escalation
Technology obsolescence risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.0 million to DEFENSE TECHNOLOGY, LLC. M1029, 40MM NON-LETHAL CROWD DISPERSAL

Who is the contractor on this award?

The obligated recipient is DEFENSE TECHNOLOGY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $16.0 million.

What is the period of performance?

Start: 2006-07-28. End: 2030-12-25.

What is the specific type and capability of the non-lethal crowd dispersal munitions being procured?

The data indicates the contract is for '40MM NON-LETHAL CROWD DISPERSAL' munitions. While the specific chemical agents or delivery mechanisms are not detailed, 40mm non-lethal rounds are commonly used by law enforcement and military for crowd control. These can include projectiles that deploy irritant chemicals (like tear gas or pepper spray), kinetic impact rounds, or marking rounds. The exact payload and intended use case would determine the specific capabilities and effectiveness, which are not fully elaborated in the provided data.

How does the $16 million contract value compare to historical spending on similar crowd dispersal munitions by the Department of Defense?

Direct comparison of the $16.05 million contract value to historical spending on similar crowd dispersal munitions is challenging without more granular data on specific munition types and quantities procured in the past. The provided data indicates this is a sole-source award with a long duration (ending in 2030), suggesting it might be a significant, long-term supply agreement. To establish a benchmark, one would need to analyze past solicitations and awards for 40mm non-lethal rounds, factoring in inflation, quantity variations, and different contract types. The absence of competition in this current award makes direct price-to-price comparisons difficult.

What are the primary risks associated with a sole-source contract of this duration for crowd dispersal munitions?

The primary risks associated with this sole-source contract include: 1) **Price Inflation:** Without competition, DEFENSE TECHNOLOGY, LLC may not have incentives to offer the lowest possible price, and the long duration increases the risk of price increases over time. 2) **Lack of Innovation:** The absence of competitive pressure could stifle innovation in non-lethal munition technology. 3) **Vendor Lock-in:** The government becomes dependent on a single supplier, making it difficult to switch even if better alternatives emerge. 4) **Quality Control Concerns:** While not inherent, sole-source awards can sometimes lead to less rigorous quality assurance if oversight is not robust. 5) **Potential for Unnecessary Procurement:** The long duration might encourage the purchase of more munitions than immediately needed.

What is DEFENSE TECHNOLOGY, LLC's track record in supplying non-lethal munitions to the government?

The provided data identifies DEFENSE TECHNOLOGY, LLC as the contractor. To assess their track record, further research would be required into their past performance on government contracts, particularly those involving non-lethal munitions. This would involve reviewing contract databases (like FPDS or SAM.gov) for previous awards, performance evaluations (e.g., CPARS reports), and any documented issues or successes. Without this external data, it's impossible to comment on their specific track record beyond their ability to secure this current sole-source award.

How does the contract's fixed-price nature mitigate or exacerbate risks for the government?

The contract is awarded as 'FIRM FIXED PRICE' (FFP). This contract type is generally advantageous for the government as it shifts the risk of cost overruns to the contractor. The government knows the total price it will pay, provided the contractor meets all terms and conditions. For the government, this mitigates the risk of unexpected cost increases during contract performance. However, in a sole-source scenario, the 'firm' price might be set at a higher baseline than it would be in a competitive environment. Therefore, while FFP provides cost certainty, it doesn't guarantee the *best* price.

What are the potential implications of awarding a contract for crowd dispersal munitions that extends until December 2030?

A contract extending until December 2030, covering over 24 years from the award date, has several implications. Firstly, it ensures a long-term, stable supply of these munitions for the Department of Defense, which could be crucial for readiness. Secondly, it provides significant business certainty for DEFENSE TECHNOLOGY, LLC. However, it also carries risks: technology obsolescence is a major concern, as non-lethal munition technology could evolve significantly over two decades. Furthermore, the government locks itself into potentially outdated specifications and pricing. The long duration also makes it harder to adapt to changing tactical needs or budget constraints.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W15QKN06R0104

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Maui Acquisition Corp. (UEI: 078602866)

Address: 1855 S LOOP AVE, CASPER, WY, 82601

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

Financial Breakdown

Contract Ceiling: $16,049,048

Exercised Options: $16,049,048

Current Obligation: $16,049,048

Contract Characteristics

Cost or Pricing Data: YES

Timeline