Department of Defense awards $40.6M contract for 60MM mortar cartridges to Day and Zimmermann, Inc

Contract Overview

Contract Amount: $40,653,909 ($40.7M)

Contractor: DAY and Zimmermann, Incorporated

Awarding Agency: Department of Defense

Start Date: 2017-09-27

End Date: 2022-08-31

Contract Duration: 1,799 days

Daily Burn Rate: $22.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LAP M1061 60MM HE MORTAR CARTRIDGE

Place of Performance

Location: PARSONS, LABETTE County, KANSAS, 67357

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $40.7 million to DAY AND ZIMMERMANN, INCORPORATED for work described as: LAP M1061 60MM HE MORTAR CARTRIDGE Key points: 1. Contract awarded for ammunition manufacturing, a critical component for military operations. 2. The contract spans nearly five years, indicating a long-term need for these munitions. 3. Awarded under full and open competition, suggesting a competitive bidding process. 4. The fixed-price contract type aims to control costs for the government. 5. The contractor, Day and Zimmermann, Inc., is a significant player in defense manufacturing. 6. The contract is for a specific type of mortar cartridge, highlighting specialized defense needs.

Value Assessment

Rating: good

The contract value of $40.6 million for approximately 1,800 days of supply appears reasonable for specialized ammunition. Benchmarking against similar contracts for mortar rounds is challenging without more specific technical details, but the firm fixed-price structure provides cost certainty. The number of bids received (3) suggests a moderate level of competition, which generally supports fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' While this indicates competition was sought, the exclusion of certain sources suggests specific technical or security requirements may have limited the pool of eligible bidders. Three bids were received, which is a moderate level of competition. This suggests that while the process was competitive, it may not have achieved the broadest possible market engagement.

Taxpayer Impact: The competitive nature, even with exclusions, likely helped secure a fair price for taxpayers. However, understanding the rationale for excluding other sources could reveal opportunities for broader competition in the future, potentially leading to further cost savings.

Public Impact

The primary beneficiaries are the U.S. Army units requiring 60MM mortar cartridges for training and operational readiness. The contract ensures the supply of essential ammunition for ground combat operations. The contract is being performed in Kansas (KS), supporting the regional economy and defense industrial base. This contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to specialized nature of ammunition and possible source exclusions.
Reliance on a single contractor for a critical defense item could pose supply chain risks if not managed carefully.
Fluctuations in raw material costs for ammunition components could impact long-term affordability if not adequately addressed in pricing.

Positive Signals

Award to an established defense contractor with a track record in munitions.
Firm fixed-price contract provides cost predictability for the government.
Contract duration of nearly five years allows for stable production planning and supply.
Performance in Kansas supports the domestic defense industrial base.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for military-grade ammunition is characterized by high barriers to entry due to stringent quality control, specialized manufacturing processes, and government procurement regulations. Spending in this category is driven by military readiness requirements and geopolitical factors. Comparable spending benchmarks would typically be found within the broader DoD budget for ordnance and munitions.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there is no explicit mention of small business set-asides. This suggests the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist within the supply chain for raw materials or components, but this is not detailed in the award information. The primary focus appears to be on large-scale production capabilities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Support Systems
Mortar Systems and Ammunition
Defense Industrial Base Manufacturing

Risk Flags

Potential for reduced competition due to source exclusions.
Supply chain vulnerability for critical munitions.
Long-term contract duration may not fully capture market price fluctuations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.7 million to DAY AND ZIMMERMANN, INCORPORATED. LAP M1061 60MM HE MORTAR CARTRIDGE

Who is the contractor on this award?

The obligated recipient is DAY AND ZIMMERMANN, INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $40.7 million.

What is the period of performance?

Start: 2017-09-27. End: 2022-08-31.

What is the historical spending trend for 60MM mortar cartridges by the Department of Defense?

Analyzing historical spending on 60MM mortar cartridges requires access to detailed procurement data over multiple fiscal years. While this specific contract award is for approximately $40.6 million over nearly five years, broader trends would reveal if this represents an increase, decrease, or stable level of investment in this munition. Factors influencing historical spending include operational tempo, inventory levels, modernization programs, and budget allocations. Without a longitudinal dataset, it's difficult to ascertain if this award aligns with past spending patterns or signifies a shift in procurement strategy. However, the duration and value suggest a sustained requirement.

How does the unit cost of these mortar cartridges compare to similar items procured by other military branches or allied nations?

Direct unit cost comparison is challenging without knowing the exact specifications and quantity per unit price for this $40.6 million contract. The data indicates 3 bids were received, suggesting some level of market pricing was established. However, to benchmark effectively, one would need to compare against contracts for identical or highly similar 60MM mortar cartridges procured by other DoD branches (e.g., Marine Corps) or allied nations. Factors like volume discounts, specific technological enhancements (e.g., proximity fuzes, advanced explosives), and differing contract types (fixed-price vs. cost-plus) can significantly influence unit costs. A comprehensive analysis would require a database of comparable munitions contracts.

What are the key performance metrics and quality assurance standards associated with this ammunition contract?

Key performance metrics for ammunition contracts typically revolve around on-time delivery, adherence to stringent quality specifications, and reliability. For 60MM mortar cartridges, this would include ensuring precise projectile weight, explosive fill consistency, fuze functionality, and shelf-life longevity. Quality assurance standards are governed by military specifications (Mil-Specs) and rigorous testing protocols, often involving destructive and non-destructive testing of sample lots. The contractor, Day and Zimmermann, Inc., is expected to maintain robust quality management systems to meet these demanding requirements. Failure to meet these standards can result in contract penalties or termination.

What is the track record of Day and Zimmermann, Inc. in fulfilling defense manufacturing contracts, particularly for munitions?

Day and Zimmermann, Inc. has a long-standing and significant presence in the defense manufacturing sector, with a particular expertise in munitions production. They are a major contractor for various types of ordnance, including artillery shells, mortar rounds, and small arms ammunition. Their track record generally includes successful delivery of large-volume contracts for the U.S. military and allied nations. While specific performance details for every contract are not publicly available, their continued selection for substantial awards like this one suggests a history of meeting contractual obligations regarding quality, delivery, and cost. They are recognized as a key player in the domestic defense industrial base for energetic materials and munitions.

What are the potential risks associated with the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type for this contract?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type presents specific risks. While it aims for competition, the exclusion of certain sources implies that only a subset of potential manufacturers was eligible. This could be due to proprietary technology, specific security clearances, or unique manufacturing capabilities required. The risk is that this limitation might have reduced the overall competitive pressure, potentially leading to a higher price than if the entire market had been engaged. It also raises questions about the justification for the exclusions and whether these exclusions were truly necessary or could be overcome through alternative means, potentially limiting future competition and innovation.

How does this contract contribute to the overall readiness and strategic posture of the U.S. Army?

This contract directly contributes to the U.S. Army's readiness by ensuring a consistent and adequate supply of 60MM mortar cartridges. These munitions are a fundamental component of indirect fire support, crucial for infantry units in various combat scenarios, from close-quarters engagements to supporting larger operations. Maintaining sufficient stockpiles of reliable ammunition is vital for training exercises, allowing soldiers to maintain proficiency, and for wartime contingencies, ensuring forces have the necessary firepower. The contract's duration suggests a commitment to sustaining these capabilities, thereby bolstering the Army's overall strategic posture and its ability to project power effectively.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W15QKN17R0041

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: DAY & Zimmermann Group Inc., the

Address: 23102 RUSH RD, PARSONS, KS, 67357

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: $41,208,501

Exercised Options: $40,653,909

Current Obligation: $40,653,909

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline