Department of Defense awarded $116.6M to Alliant Techsystems Inc. for ammunition manufacturing

Contract Overview

Contract Amount: $116,596,608 ($116.6M)

Contractor: Alliant Techsystems Inc

Awarding Agency: Department of Defense

Start Date: 2007-03-29

End Date: 2011-05-31

Contract Duration: 1,524 days

Daily Burn Rate: $76.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UCA EXECUTED

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $116.6 million to ALLIANT TECHSYSTEMS INC for work described as: UCA EXECUTED Key points: 1. Contract awarded at a significant value, requiring careful assessment of cost-effectiveness. 2. Sole-source award indicates limited competition, potentially impacting price discovery. 3. Long contract duration (1524 days) necessitates ongoing performance monitoring. 4. Fixed-price contract type shifts risk to the contractor, but requires clear scope definition. 5. Ammunition manufacturing is a critical defense sector, subject to specific regulatory and supply chain considerations. 6. Contract awarded to a single, established prime contractor, with no explicit small business set-aside.

Value Assessment

Rating: fair

The contract value of $116.6 million over approximately four years for ammunition manufacturing is substantial. Without specific benchmarks for similar ammunition types and quantities, a precise value-for-money assessment is challenging. However, the fixed-price nature suggests an expectation of cost control by the contractor. Further analysis would require comparing unit costs to industry standards or other government contracts for comparable munitions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Alliant Techsystems Inc., was solicited. This approach is typically used when there is a lack of competition, unique capabilities required, or for follow-on work to an existing system. The absence of multiple bidders limits the government's ability to leverage competitive pricing and may result in higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Sole-source awards can mean taxpayers may not be getting the best possible price due to the lack of competitive pressure. This necessitates strong oversight to ensure the awarded price is fair and reasonable.

Public Impact

The primary beneficiary is the Department of the Defense, receiving essential ammunition supplies. Services delivered include the manufacturing of ammunition (except small arms). The contract's geographic impact is tied to the contractor's manufacturing facilities, primarily in Minnesota (ST: MN). Workforce implications include employment at Alliant Techsystems' manufacturing sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of small business participation noted, as the contract was not set aside and no small business subcontracting information is readily available.
Long contract duration increases the risk of scope creep or performance degradation without diligent oversight.

Positive Signals

Award to a single, established contractor (Alliant Techsystems Inc.) may indicate reliability and proven capability in ammunition production.
Firm Fixed Price contract type provides cost certainty for the government, assuming the scope is well-defined.
The contract supports a critical defense capability, ensuring the availability of necessary munitions.

Sector Analysis

The defense sector, particularly ammunition manufacturing, is a specialized and critical area for national security. This contract falls under the broader manufacturing and defense industrial base. The market is often characterized by a limited number of large, experienced contractors due to high barriers to entry, including specialized knowledge, capital investment, and security requirements. Government contracts are a significant driver of demand in this sector.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of mandatory small business subcontracting goals. This suggests that the prime contractor, Alliant Techsystems Inc., is expected to fulfill the contract requirements directly or through its own facilities. The absence of small business involvement in this specific award means potential opportunities for smaller firms within the ammunition supply chain are not being directly leveraged through this contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a sole-source award, scrutiny on pricing and performance is crucial. Transparency is facilitated through contract databases, but detailed operational oversight rests with the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Defense Industrial Base Manufacturing Contracts
Alliant Techsystems Inc. Government Contracts
Fixed-Price Defense Contracts

Risk Flags

Sole-source award may result in higher costs.
Lack of competition limits price discovery.
Long contract duration requires sustained oversight.
No explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $116.6 million to ALLIANT TECHSYSTEMS INC. UCA EXECUTED

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 $116.6 million.

What is the period of performance?

Start: 2007-03-29. End: 2011-05-31.

What is the historical spending pattern for ammunition manufacturing by the Department of Defense?

The Department of Defense (DoD) consistently allocates significant funds towards ammunition procurement to maintain readiness and support ongoing operations. Historical spending data reveals a multi-billion dollar annual expenditure across various types of munitions, from small arms to large-caliber artillery and missiles. This spending is influenced by geopolitical factors, operational tempo, modernization efforts, and inventory management strategies. Major contractors like Alliant Techsystems Inc. (now part of RTX) are key players in this market. Analyzing trends over the past decade shows fluctuations tied to conflicts and strategic shifts, with a general emphasis on ensuring a robust domestic industrial base for critical munitions.

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

Benchmarking the unit cost of ammunition under this $116.6 million contract requires access to specific details about the type and quantity of munitions produced, which are not fully detailed in the provided data. However, as a sole-source award, there's an inherent risk that the price may not be as competitive as it would be in a fully competed scenario. Government agencies typically conduct price analyses, comparing proposed costs to historical prices, other contract awards, or commercial price lists. Without that specific analysis or comparable contract data, it's difficult to definitively state if the unit cost is optimal. The firm fixed-price nature suggests the contractor bears the risk of cost overruns, which should be factored into their pricing.

What are the key performance indicators (KPIs) used to assess the performance of Alliant Techsystems Inc. on this contract?

For a contract of this nature, key performance indicators (KPIs) would likely focus on several critical areas. These would include on-time delivery rates, ensuring that ammunition is produced and delivered according to the schedule outlined in the contract. Quality control metrics are paramount, measuring defect rates and adherence to stringent military specifications. Production efficiency, potentially measured by output per labor hour or adherence to production targets, would also be important. Furthermore, compliance with safety and environmental regulations during the manufacturing process is a crucial KPI. The government contracting officer and quality assurance representatives would monitor these KPIs throughout the contract's duration.

What is the track record of Alliant Techsystems Inc. in fulfilling defense manufacturing contracts, particularly for ammunition?

Alliant Techsystems Inc. (ATK), prior to its acquisition by Orbital Sciences and subsequent integration into Northrop Grumman, and later its aerospace businesses becoming part of RTX, has a long and established history in defense manufacturing, including extensive experience in ammunition production. The company has been a significant supplier of various munitions to the U.S. military for decades. Their track record generally includes the capability to produce large quantities of ammunition and to meet demanding military specifications. While specific performance details for every contract are not publicly available, ATK has historically been considered a reliable, albeit sometimes costly, supplier in this sector. Any assessment of their performance on this specific contract would need to consider past performance reviews and any documented issues or successes.

What are the potential risks associated with a sole-source award for critical defense supplies like ammunition?

Sole-source awards for critical defense supplies like ammunition carry several potential risks. Firstly, the lack of competition can lead to higher prices for taxpayers, as the government does not benefit from the cost-saving pressures inherent in a competitive bidding process. Secondly, it can reduce innovation, as the sole contractor may have less incentive to invest in process improvements or new technologies if their market position is guaranteed. Thirdly, it creates a dependency on a single supplier, which can be problematic if that supplier experiences production issues, financial difficulties, or faces geopolitical sanctions. This dependency also makes it harder for the government to switch suppliers if performance is unsatisfactory. Finally, sole-source justifications must be rigorously scrutinized to ensure they are truly warranted and not simply a matter of convenience.

Industry Classification

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

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4700 NATHAN LN N, MINNEAPOLIS, MN, 90

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

Financial Breakdown

Contract Ceiling: $116,596,608

Exercised Options: $116,596,608

Current Obligation: $116,596,608

Contract Characteristics

Cost or Pricing Data: NO

Timeline