DoD awards $43.8M for 11,000 120mm Insensitive Munitions cartridges to General Dynamics

Contract Overview

Contract Amount: $43,824,598 ($43.8M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-12-20

End Date: 2016-10-19

Contract Duration: 1,765 days

Daily Burn Rate: $24.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACT AWARD FOR 11,000 120MM INSENSITIVE MUNITIONS HIGH EXPLOSIVE WITH TRACER (IM HE-T) CARTRIDGES.

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $43.8 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: CONTRACT AWARD FOR 11,000 120MM INSENSITIVE MUNITIONS HIGH EXPLOSIVE WITH TRACER (IM HE-T) CARTRIDGES. Key points: 1. Contract awarded for specialized ammunition, indicating a need for advanced ordnance capabilities. 2. The award to General Dynamics suggests a reliance on established defense contractors for critical supplies. 3. The firm-fixed-price contract type aims to control costs and provide predictability for the government. 4. The duration of the contract (over 4 years) implies a sustained requirement for these munitions. 5. The absence of competition raises questions about potential cost efficiencies and market exploration. 6. The specific nature of 'insensitive munitions' highlights a focus on safety and operational reliability in explosive ordnance.

Value Assessment

Rating: fair

The contract value of $43.8 million for 11,000 units equates to approximately $3,984 per cartridge. Benchmarking this against similar advanced munitions requires detailed market analysis, but the price appears within a reasonable range for specialized, high-explosive ordnance. Without competitive bids, it's difficult to definitively assess if this represents the best value, but the firm-fixed-price structure provides cost certainty.

Cost Per Unit: $3,984 per cartridge

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary capabilities, technology, or security clearances, or in situations where urgency or specific requirements preclude a full and open competition. The lack of competition limits the government's ability to leverage market forces to drive down prices and explore alternative solutions.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding, potentially leading to higher costs for this specialized ammunition.

Public Impact

The primary beneficiaries are the U.S. Army, which will receive advanced 120mm ammunition for its armored vehicles. The contract delivers 11,000 rounds of Insensitive Munitions High Explosive with Tracer (IM HE-T) cartridges, enhancing combat readiness and safety. The contract is being performed in Florida, supporting the defense industrial base in that state. This award supports jobs within General Dynamics Ordnance and Tactical Systems, contributing to the defense manufacturing workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may reduce incentives for innovation and efficiency from the contractor.
Long contract duration could lead to price increases if market conditions change significantly.

Positive Signals

Award to a known, experienced defense contractor like General Dynamics suggests reliability in delivery.
Focus on 'insensitive munitions' indicates a commitment to enhanced safety standards for personnel and equipment.
Firm-fixed-price contract provides budget certainty for the Department of Defense.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for advanced ordnance is characterized by high barriers to entry due to specialized technology, stringent quality control, and long development cycles. General Dynamics is a major player in this space. Comparable spending benchmarks would involve analyzing other awards for similar caliber, high-explosive, or insensitive munitions from various defense agencies.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. General Dynamics Ordnance and Tactical Systems is a large defense contractor. The absence of small business participation in this specific award means direct opportunities for small businesses are limited, though they may be involved further down the supply chain.

Oversight & Accountability

The contract is a definitive contract awarded by the Department of the Army, a component of the Department of Defense. Oversight would typically be managed by contracting officers and program managers within the Army. Accountability measures are inherent in the firm-fixed-price structure, requiring delivery of specified goods. Transparency is limited by the sole-source nature of the award, but contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Armored Vehicle Munitions
Insensitive Munitions Development Programs
Defense Ordnance Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competition
High per-unit cost without benchmark

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.8 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. CONTRACT AWARD FOR 11,000 120MM INSENSITIVE MUNITIONS HIGH EXPLOSIVE WITH TRACER (IM HE-T) CARTRIDGES.

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 $43.8 million.

What is the period of performance?

Start: 2011-12-20. End: 2016-10-19.

What is the track record of General Dynamics Ordnance and Tactical Systems in delivering similar ammunition contracts?

General Dynamics Ordnance and Tactical Systems (GD-OTS) has a long-standing reputation as a major supplier of munitions and ordnance systems to the U.S. military and allied nations. They are known for producing a wide range of ammunition, including artillery shells, tank rounds, and mortar systems. Their experience encompasses both standard and advanced munitions, including those with insensitive characteristics. GD-OTS has consistently been awarded significant contracts for various types of ammunition, demonstrating their capability to meet large-scale production demands and stringent quality specifications. Their history suggests a reliable capacity to fulfill complex ordnance requirements, making them a primary contractor for specialized items like the 120mm IM HE-T cartridges.

How does the per-unit cost of $3,984 compare to other 120mm ammunition contracts?

The per-unit cost of approximately $3,984 for these 120mm IM HE-T cartridges is difficult to benchmark precisely without access to specific, comparable contract data. However, advanced munitions, particularly those incorporating insensitive munitions (IM) technology for enhanced safety and reliability, typically command a premium over standard rounds. Factors such as the specific explosive fill, tracer element, lot testing requirements, and the complexity of the manufacturing process contribute to the unit price. While this figure may seem high, it is likely within the expected range for specialized, high-performance ordnance designed to meet rigorous military specifications. Further analysis would require comparing this price against other recent awards for similar 120mm IM rounds, considering factors like quantity, contract type, and specific performance characteristics.

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

The primary risks associated with a sole-source award for critical defense supplies like ammunition include potential overpricing due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a potential lack of supply chain resilience if the sole source faces production issues. Taxpayers may bear a higher cost than if the contract were competed. Furthermore, reliance on a single supplier can create strategic vulnerabilities if that supplier's capabilities are disrupted. While sole-source awards are sometimes necessary due to unique technical requirements or urgent needs, they necessitate robust oversight to ensure fair pricing and performance.

How effective is the firm-fixed-price (FFP) contract type in managing costs for ammunition procurement?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs in procurement scenarios where the scope of work is well-defined, such as the production of a specific quantity of ammunition. Under an FFP contract, the contractor assumes most of the risk and is obligated to deliver the goods at the agreed-upon price, regardless of their actual costs. This provides the buyer (the government) with cost certainty and predictability, making budgeting easier. For standardized or mature products like ammunition, where technical specifications are clear and production processes are established, FFP helps prevent cost overruns. However, if unforeseen technical challenges arise or if the initial price was not adequately negotiated due to limited competition, the government might still end up paying more than optimal.

What is the historical spending trend for 120mm ammunition within the Department of Defense?

Historical spending on 120mm ammunition within the Department of Defense has been substantial, driven by the operational requirements of U.S. Army armored forces, primarily equipped with Abrams tanks. Spending fluctuates based on deployment tempo, training needs, modernization programs, and inventory replenishment strategies. Over the past decade, significant investments have been made not only in standard rounds but also in advanced variants like the Insensitive Munitions (IM) versions, reflecting a strategic emphasis on crew safety and survivability. While specific annual figures vary, the consistent fielding of 120mm-capable platforms ensures a sustained demand and associated budgetary allocation for this critical munition type across multiple fiscal years.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 11399 16TH CT N STE 200, SAINT PETERSBURG, FL, 33716

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: $43,824,598

Exercised Options: $43,824,598

Current Obligation: $43,824,598

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline