DoD awards $65.2M for M4/M4A1 carbines, with FN America LLC securing the contract
Contract Overview
Contract Amount: $65,252,132 ($65.3M)
Contractor: FN America LLC
Awarding Agency: Department of Defense
Start Date: 2019-02-22
End Date: 2020-08-31
Contract Duration: 556 days
Daily Burn Rate: $117.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DELIVERY ORDER COMPETITIVE AWARD M4 AND M4A1 CARBINES
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229
Plain-Language Summary
Department of Defense obligated $65.3 million to FN AMERICA LLC for work described as: DELIVERY ORDER COMPETITIVE AWARD M4 AND M4A1 CARBINES Key points: 1. Value for money assessed against comparable small arms procurements. 2. Competition dynamics indicate a single awardee for this specific delivery order. 3. Risk indicators include potential single-source reliance for future needs. 4. Performance context is tied to the ongoing sustainment and production of standard issue carbines. 5. Sector positioning within defense manufacturing, specifically small arms.
Value Assessment
Rating: good
The contract value of $65.2 million for M4 and M4A1 carbines appears reasonable when benchmarked against historical small arms procurements. While specific per-unit cost data is not provided, the firm-fixed-price nature of the contract suggests a degree of cost certainty for the Department of Defense. Comparisons with similar large-scale weapon system awards indicate that this contract falls within expected spending ranges for such critical equipment, reflecting the costs associated with advanced manufacturing and quality control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the data indicates a single delivery order award to FN America LLC. This implies that while the initial solicitation was broadly advertised, FN America LLC was selected as the most advantageous offer. The level of competition for this specific order, resulting in one awardee, warrants further examination to understand if it reflects specialized capabilities or market concentration.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through diverse bids. However, a single awardee in this instance means taxpayers may not have benefited from the full spectrum of potential price reductions that could arise from more intense bidding.
Public Impact
US Army personnel benefit from the continued supply of standard issue M4 and M4A1 carbines. Services delivered include the manufacturing and delivery of firearms essential for military operations. Geographic impact is primarily within the United States, supporting domestic defense manufacturing. Workforce implications include sustained employment at FN America LLC's manufacturing facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for increased reliance on a single supplier for critical small arms.
- Limited visibility into the competitive landscape for future carbine requirements.
- Dependence on FN America LLC's production capacity and supply chain.
Positive Signals
- Awarded under full and open competition, ensuring broad market access.
- Firm-fixed-price contract provides cost predictability for the government.
- FN America LLC is an established manufacturer with a proven track record for these specific weapon systems.
Sector Analysis
The defense sector, particularly small arms manufacturing, is characterized by specialized production capabilities and stringent quality requirements. This contract fits within the broader category of military equipment procurement, where spending is driven by operational needs and modernization efforts. Comparable spending benchmarks in this sub-sector often involve multi-year contracts for major weapon systems, with values ranging from tens to hundreds of millions of dollars, depending on quantity and system complexity.
Small Business Impact
This contract was not specifically set aside for small businesses, and the awardee, FN America LLC, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses within this specific delivery order. Therefore, the direct impact on the small business ecosystem from this particular award is likely minimal, though FN America LLC may engage small businesses in its broader supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. 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 Small Arms Procurement
- M16 Rifle Procurement
- Individual Combat Weapon Systems
- Tactical Firearm Manufacturing Contracts
Risk Flags
- Potential for single-source dependency
- Supply chain vulnerability
- Quality control assurance
Tags
defense, department-of-defense, department-of-the-army, small-arms, firearms, firm-fixed-price, delivery-order, full-and-open-competition, large-business, fn-america-llc, m4-carbine, m4a1-carbine
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $65.3 million to FN AMERICA LLC. DELIVERY ORDER COMPETITIVE AWARD M4 AND M4A1 CARBINES
Who is the contractor on this award?
The obligated recipient is FN AMERICA 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 $65.3 million.
What is the period of performance?
Start: 2019-02-22. End: 2020-08-31.
What is FN America LLC's track record with M4 and M4A1 carbine production for the US military?
FN America LLC has a long-standing and significant track record as a primary manufacturer of the M4 and M4A1 carbines for the U.S. military. They have been a key supplier for many years, producing these weapons under various contracts. Their established production lines, quality control processes, and familiarity with military specifications make them a consistent and reliable source for these critical firearms. This history suggests a deep understanding of the technical requirements and performance expectations associated with these platforms, contributing to their repeated selection for such awards.
How does the $65.2 million value compare to similar small arms procurements?
The $65.2 million value for this delivery order of M4 and M4A1 carbines appears to be within the expected range for large-scale firearms procurements. Historical data shows that contracts for similar quantities of standard-issue rifles and carbines awarded to major defense contractors can range from tens to over a hundred million dollars. Factors influencing the total value include the number of units ordered, specific configuration requirements, included accessories, and the duration of the delivery period. Without precise unit counts and detailed specifications for this order, a direct per-unit cost comparison is difficult, but the overall contract value aligns with industry benchmarks for equipping military forces.
What are the primary risks associated with this contract for the Department of Defense?
The primary risks associated with this contract include potential supply chain disruptions affecting FN America LLC's ability to meet delivery schedules, especially given global manufacturing complexities. There's also a risk of over-reliance on a single supplier for these critical weapons, which could limit future negotiation leverage and potentially lead to price increases in subsequent awards if competition diminishes. Furthermore, any unforeseen quality control issues or performance deficiencies in the delivered carbines could impact soldier readiness and require costly remediation efforts. Ensuring consistent adherence to stringent military specifications throughout the production run is paramount.
How effective is the firm-fixed-price contract type in managing costs for this carbine procurement?
The firm-fixed-price (FFP) contract type is generally considered effective for managing costs in procurements where the scope of work is well-defined, such as the production of standard M4 and M4A1 carbines. Under an FFP contract, the contractor assumes most of the risk for cost overruns, providing the government with cost certainty. This means the price is fixed regardless of the contractor's actual costs, incentivizing the contractor to control expenses efficiently. For the Department of Defense, this structure helps in budget predictability and avoids unexpected increases in expenditure, making it a preferred choice for acquiring standardized equipment like firearms.
What are the historical spending patterns for M4/M4A1 carbines by the Department of Defense?
Historical spending patterns for M4 and M4A1 carbines by the Department of Defense show consistent and substantial investment over the past two decades. The DoD has awarded numerous contracts, often in the tens to hundreds of millions of dollars annually, to various manufacturers, with FN America LLC being a dominant supplier. These procurements are driven by the need to equip new service members, replace aging inventory, and maintain operational readiness across all branches. Spending fluctuates based on overall defense budgets, strategic priorities, and the lifecycle of weapon systems, but the M4/M4A1 platform has remained a staple, ensuring sustained procurement activity.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Product/Service Code: WEAPONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Herstal SA (UEI: 770838464)
Address: 797 OLD CLEMSON RD, COLUMBIA, SC, 29229
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $65,252,132
Exercised Options: $65,252,132
Current Obligation: $65,252,132
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN15D0072
IDV Type: IDC
Timeline
Start Date: 2019-02-22
Current End Date: 2020-08-31
Potential End Date: 2020-08-31 12:08:00
Last Modified: 2020-06-23
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