DoD Awards $34.8M for 31,200 120mm Shell Bodies, with Options for 55,000 More

Contract Overview

Contract Amount: $34,775,600 ($34.8M)

Contractor: General Dynamics Ordnance and Tactical Systems Inc

Awarding Agency: Department of Defense

Start Date: 2008-03-28

End Date: 2012-12-31

Contract Duration: 1,739 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: TAS::21 2020::TAS FIRM FIXED PRICE CONTRACT FOR THE PROCUREMENT OF 31,200 120MM M930/M983 IR SHELL BODY FOR THE BASE AWARD. CONTRACT INCLUDES BASIC PLUS 4 EVALUATED/PRICED OPTION YEARS, WITH A MAXIMUM QUANTITY OF 55,000 PER OPTION PERIOD.

Place of Performance

Location: SCRANTON, LACKAWANNA County, PENNSYLVANIA, 18505

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $34.8 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC for work described as: TAS::21 2020::TAS FIRM FIXED PRICE CONTRACT FOR THE PROCUREMENT OF 31,200 120MM M930/M983 IR SHELL BODY FOR THE BASE AWARD. CONTRACT INCLUDES BASIC PLUS 4 EVALUATED/PRICED OPTION YEARS, WITH A MAXIMUM QUANTITY OF 55,000 PER OPTION PERIOD. Key points: 1. Significant contract for ammunition manufacturing, indicating sustained defense needs. 2. General Dynamics is the sole awardee, raising questions about competition breadth. 3. Long-term contract structure with options suggests potential for substantial future spending. 4. The 'Ammunition (except Small Arms) Manufacturing' sector is critical for military readiness.

Value Assessment

Rating: fair

The contract value of $34.8M for 31,200 units suggests a per-unit cost of approximately $1,115. This price needs to be benchmarked against similar defense procurement contracts for shell bodies to assess value.

Cost Per Unit: $1,115 (estimated)

Competition Analysis

Competition Level: full-and-open

Despite being awarded to a single entity, the contract was initially competed under 'full and open' procedures. However, the long-term nature and specific product may limit subsequent competition.

Taxpayer Impact: Taxpayer funds are allocated for essential defense materiel. The long-term nature of the contract and potential for option year exercise warrant close monitoring of cost efficiency.

Public Impact

Ensures supply of critical components for artillery systems. Supports defense industrial base and manufacturing capabilities. Potential for extended production runs impacting long-term budget planning. Contract duration could influence market dynamics for related components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited visibility into long-term cost escalation with economic price adjustment.
Potential for sole-source follow-on contracts if competition is not actively pursued.
Dependence on a single supplier for a critical defense component.

Positive Signals

Secures a vital defense supply chain.
Awarded through a competitive process, indicating initial price discovery.
Long-term contract provides stability for production planning.

Sector Analysis

This contract falls within the Ammunition Manufacturing sector, a key part of the defense industrial base. Spending in this area is driven by military readiness requirements and geopolitical factors. Benchmarks are often tied to specific munition types and quantities.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as both 'ss' and 'sb' fields are false. There is no indication of subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The contract's long duration and option years necessitate ongoing oversight to ensure cost controls and adherence to specifications. The Department of the Army's contracting activity should monitor performance and pricing throughout the contract lifecycle.

Related Government Programs

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

Risk Flags

Potential for cost escalation due to economic price adjustment.
Limited visibility into long-term competition strategy beyond initial award.
Dependence on a single contractor for a critical defense item.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.8 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS INC. TAS::21 2020::TAS FIRM FIXED PRICE CONTRACT FOR THE PROCUREMENT OF 31,200 120MM M930/M983 IR SHELL BODY FOR THE BASE AWARD. CONTRACT INCLUDES BASIC PLUS 4 EVALUATED/PRICED OPTION YEARS, WITH A MAXIMUM QUANTITY OF 55,000 PER OPTION PERIOD.

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 $34.8 million.

What is the period of performance?

Start: 2008-03-28. End: 2012-12-31.

What is the historical cost trend for similar 120mm shell bodies, and how does the current per-unit cost compare to industry benchmarks?

Benchmarking the estimated $1,115 per-unit cost against historical data for similar 120mm shell bodies is crucial. Factors like material costs, manufacturing complexity, and inflation (addressed by economic price adjustment) influence these prices. A detailed analysis comparing this contract's pricing to other DoD awards or commercial equivalents would reveal if the government is receiving competitive value.

What specific risks are associated with the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' contract type for this long-term ammunition procurement?

The primary risk with FP-EPA is potential cost overruns due to fluctuating economic factors like raw material prices and labor costs. While it protects the contractor from unforeseen increases, it shifts some of that risk to the government. Effective oversight is needed to ensure price adjustments are justified and do not lead to excessive spending beyond the initial competitive assessment.

How effectively does the 'full and open competition' strategy ensure long-term cost savings and innovation for this specific ammunition manufacturing requirement?

While 'full and open competition' is the preferred method, its long-term effectiveness for specialized items like shell bodies can be limited. Initial competition drives price discovery, but the long contract duration and specific technical requirements might deter new entrants for subsequent option periods. The government must actively seek opportunities to re-compete or encourage innovation to maintain cost efficiency and technological relevance.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W15QKN07R0320

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 156 CEDAR AVE, SCRANTON, PA, 18505

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,777,565

Exercised Options: $34,775,600

Current Obligation: $34,775,600

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline