DoD Awards $48.3M for 40mm HV HEDP-AB XM1176 Cartridge Production
Contract Overview
Contract Amount: $48,315,012 ($48.3M)
Contractor: Rdzm, LLC
Awarding Agency: Department of Defense
Start Date: 2019-06-28
End Date: 2026-09-30
Contract Duration: 2,651 days
Daily Burn Rate: $18.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NEW CONTRACT FOR THE ENGINEERING AND MANUFACTURING DEVELOPMENT (EMD), LOW RATE INITIAL PRODUCTION (LRIP) AND FULL RATE PRODUCTION (FRP) OF THE 40MM HV HEDP-AB XM1176 CARTRIDGE.
Place of Performance
Location: COLLEGE STATION, BRAZOS County, TEXAS, 77845
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $48.3 million to RDZM, LLC for work described as: NEW CONTRACT FOR THE ENGINEERING AND MANUFACTURING DEVELOPMENT (EMD), LOW RATE INITIAL PRODUCTION (LRIP) AND FULL RATE PRODUCTION (FRP) OF THE 40MM HV HEDP-AB XM1176 CARTRIDGE. Key points: 1. Contract covers Engineering, Manufacturing Development, Low Rate Initial Production, and Full Rate Production. 2. RDZM, LLC is the contractor for this ammunition manufacturing effort. 3. The contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 4. Competition was 'Full and Open After Exclusion of Sources', suggesting limited initial competition. 5. The sector is Ammunition Manufacturing, a critical component of defense readiness.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee contract type can lead to higher costs than fixed-price contracts if not managed carefully. The award amount of $48.3M for a multi-year production effort needs further benchmarking against similar ammunition contracts to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The competition method 'Full and Open After Exclusion of Sources' implies that while the process was open, specific sources were initially excluded, potentially limiting the competitive landscape and price discovery.
Taxpayer Impact: Taxpayer funds are allocated for the development and production of specialized ammunition, supporting military readiness. The cost-plus nature warrants close oversight to ensure efficient use of funds.
Public Impact
Ensures supply of critical 40mm high-velocity ammunition for military operations. Supports defense industrial base and manufacturing capabilities. Potential for follow-on contracts based on performance and future needs. Impacts readiness and operational effectiveness of forces utilizing this ammunition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type
- Limited competition after source exclusion
- Long contract duration with potential for scope creep
Positive Signals
- Addresses a specific military requirement for advanced ammunition
- Supports domestic manufacturing capabilities
- Definitive contract structure provides a framework for production
Sector Analysis
This contract falls within the Ammunition (except Small Arms) Manufacturing sector, a specialized area within defense industrial production. Benchmarks for similar ammunition development and production contracts are crucial for assessing cost-effectiveness.
Small Business Impact
The contract data indicates that neither Small Business Set-Aside nor Small Business concerns were primary factors in this award. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses.
Oversight & Accountability
The Cost Plus Fixed Fee structure necessitates robust oversight from the Department of the Army to monitor costs, ensure performance, and prevent inefficiencies. Regular audits and performance reviews are critical for accountability.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Cost overruns due to Cost Plus Fixed Fee structure
- Potential for limited innovation due to source exclusion
- Long-term sustainment and obsolescence management challenges
- Dependence on a single contractor for critical ammunition production
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.3 million to RDZM, LLC. NEW CONTRACT FOR THE ENGINEERING AND MANUFACTURING DEVELOPMENT (EMD), LOW RATE INITIAL PRODUCTION (LRIP) AND FULL RATE PRODUCTION (FRP) OF THE 40MM HV HEDP-AB XM1176 CARTRIDGE.
Who is the contractor on this award?
The obligated recipient is RDZM, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $48.3 million.
What is the period of performance?
Start: 2019-06-28. End: 2026-09-30.
What is the projected per-unit cost of the XM1176 cartridge at full rate production, and how does it compare to similar munitions?
The provided data does not include a per-unit cost breakdown. To assess value, a detailed analysis comparing the projected per-unit cost at full rate production against industry benchmarks for similar 40mm High Velocity High Explosive Dual Purpose Armor Piercing (HV HEDP-AB) cartridges is necessary. This comparison should consider factors like material costs, manufacturing complexity, and R&D amortization.
What specific factors led to the exclusion of certain sources in the 'Full and Open Competition After Exclusion of Sources' process?
The rationale behind excluding specific sources requires further investigation. Typically, such exclusions are based on technical capabilities, past performance, security clearances, or proprietary technology requirements. Understanding these reasons is crucial to evaluate whether the competition was truly optimized for best value and to identify potential risks associated with a narrowed bidder pool.
How will the effectiveness and reliability of the XM1176 cartridge be validated throughout the EMD and LRIP phases?
Validation of the XM1176 cartridge's effectiveness and reliability will occur through rigorous testing and evaluation during the Engineering and Manufacturing Development (EMD) and Low Rate Initial Production (LRIP) phases. This includes developmental testing, operational testing, and quality assurance checks to ensure the ammunition meets all specified performance requirements before full-rate production commences.
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: TWO STEP
Solicitation ID: W15QKN19R0014
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 17575 IOWA 79, MIDDLETOWN, IA, 52638
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $53,127,502
Exercised Options: $48,315,012
Current Obligation: $48,315,012
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-06-28
Current End Date: 2026-09-30
Potential End Date: 2026-12-24 12:12:00
Last Modified: 2025-09-30
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)