DoD Awards $211M Ammunition Contract to General Dynamics, Extending to 2030

Contract Overview

Contract Amount: $21,143,057 ($21.1M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-09-22

End Date: 2030-12-25

Contract Duration: 8,860 days

Daily Burn Rate: $2.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M1002 QUALIFICATION

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33701

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: M1002 QUALIFICATION Key points: 1. Significant long-term contract ($211M) for ammunition manufacturing. 2. Sole-source award raises questions about competition and potential price inflation. 3. Contract duration extends to 2030, indicating sustained demand or strategic need. 4. Focus on ammunition manufacturing places this within the defense industrial base.

Value Assessment

Rating: questionable

The contract value of $211M over its extended period needs comparison to similar ammunition procurements. Without competitive bidding, it's difficult to assess if the firm fixed price represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for a large contract like this could result in taxpayers paying a premium for ammunition.

Public Impact

Ensures continued supply of critical ammunition for the Department of the Army. Supports a major defense contractor, General Dynamics, and its manufacturing capabilities. Long-term nature of the contract provides stability for production planning. Potential for higher costs due to non-competitive award impacts defense budget allocation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Long contract duration may obscure current market pricing.
Lack of small business participation noted.

Positive Signals

Firm fixed price contract provides cost certainty.
Ensures supply of essential defense materiel.
Supports domestic manufacturing base.

Sector Analysis

This contract falls within the defense sector, specifically focusing on ammunition manufacturing. Spending benchmarks for ammunition procurement vary widely based on type and quantity, but large, long-term sole-source contracts warrant scrutiny.

Small Business Impact

The data indicates that small business participation was not a factor in this contract award (ss: false, sb: false). This suggests the contract was awarded directly to a large prime contractor without specific subcontracting goals for small businesses.

Oversight & Accountability

The sole-source nature of this award suggests limited oversight regarding competitive pricing. Further review would be needed to confirm if justification for sole-sourcing was robust and if pricing was independently validated.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Long contract duration
No small business participation
Potential for price inflation
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. M1002 QUALIFICATION

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, 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 $21.1 million.

What is the period of performance?

Start: 2006-09-22. End: 2030-12-25.

What is the justification for this contract being sole-sourced, and has the pricing been benchmarked against comparable market rates?

The justification for this sole-source award is not provided in the data. Without competitive bidding, it is challenging to ascertain if the firm fixed price of $211 million is optimal. Benchmarking against similar ammunition contracts, considering quantity, specifications, and market conditions at the time of award and throughout the contract period, would be necessary to assess value for money.

What are the specific risks associated with a sole-source award for ammunition, particularly given the long contract duration?

The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competition. For ammunition, a critical defense commodity, this could lead to significant overspending. A long duration (until 2030) exacerbates this risk, as the fixed price may not reflect future market fluctuations or technological advancements, potentially locking the government into unfavorable terms.

How does this contract contribute to the overall effectiveness and readiness of the Department of the Army's ammunition supply chain?

This contract ensures a consistent and long-term supply of specific ammunition types, which is crucial for maintaining operational readiness. By awarding to a known entity like General Dynamics, the Army likely secures a reliable source, potentially streamlining logistics and quality control. However, the effectiveness is partially contingent on the price paid and whether alternative, potentially more cost-effective, sources were overlooked.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W15QKN04R0603

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 11399 16TH CT N, STE 200, SAINT PETERSBURG, FL, 90

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

Financial Breakdown

Contract Ceiling: $21,303,508

Exercised Options: $21,143,057

Current Obligation: $21,143,057

Contract Characteristics

Cost or Pricing Data: YES

Timeline