General Dynamics awarded $230M contract for metal parts, with delivery orders extending to 2026

Contract Overview

Contract Amount: $230,428,502 ($230.4M)

Contractor: General Dynamics OTS (wilkes Barre), LLC

Awarding Agency: Department of Defense

Start Date: 2021-03-24

End Date: 2026-01-30

Contract Duration: 1,773 days

Daily Burn Rate: $130.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: M795 METAL PARTS

Place of Performance

Location: WILKES BARRE, LUZERNE County, PENNSYLVANIA, 18702

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $230.4 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC for work described as: M795 METAL PARTS Key points: 1. Contract value suggests significant demand for specialized metal components. 2. Fixed-price with economic price adjustment indicates potential for cost fluctuations. 3. Full and open competition aims for competitive pricing. 4. Long performance period allows for sustained supply chain integration. 5. Contract awarded to a single entity, General Dynamics OTS, warrants scrutiny of performance. 6. Geographic concentration in Pennsylvania may have local economic implications.

Value Assessment

Rating: good

The contract value of $230M over its performance period is substantial, indicating a significant procurement. Benchmarking against similar contracts for metal parts manufacturing is challenging without more specific details on the exact components. However, the fixed-price with economic price adjustment (FPEPA) structure suggests an attempt to balance cost certainty with market volatility. The contract's value appears reasonable given the potential scale and duration, but a detailed cost breakdown would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders were likely solicited. This method is generally preferred as it maximizes the pool of potential offerors and encourages competitive pricing. The specific number of bidders is not provided, but the 'full and open' designation implies a robust competitive process was intended.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces, ensuring the government receives the best possible value for its investment in these metal parts.

Public Impact

The Department of Defense, specifically the Department of the Army, is the primary beneficiary, receiving critical metal parts for its operations. The contract supports the manufacturing and supply of essential components, likely for military equipment or systems. The primary geographic impact is in Pennsylvania, where General Dynamics OTS (Wilkes Barre) is located, potentially supporting local jobs and the regional economy. The contract implies a sustained need for these parts, contributing to the stability of the defense industrial base and associated workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the economic price adjustment clause if raw material costs increase significantly.
Dependence on a single contractor, General Dynamics OTS, for a large volume of critical parts could pose supply chain risks.
Lack of specific details on the exact 'metal parts' makes it difficult to assess the criticality and potential for substitution.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
The fixed-price nature, even with an adjustment clause, provides a degree of cost control.
Long contract duration allows for stable planning and potential for economies of scale in production.

Sector Analysis

This contract falls within the broader defense manufacturing sector, specifically focusing on the production of metal components. The North American Industry Classification System (NAICS) code 332993, 'Ammunition (except Small Arms) Manufacturing,' suggests these parts are critical for ordnance or related systems. The defense industrial base relies heavily on specialized manufacturers like General Dynamics for a consistent supply of high-quality components. Spending in this sub-sector is driven by military readiness requirements and modernization programs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and does not appear to have a small business subcontracting plan requirement (st: PA, which likely refers to the state). Therefore, the direct impact on small businesses through this specific award is likely minimal, unless General Dynamics OTS engages them as suppliers independently. The focus is on a large prime contractor, suggesting larger-scale manufacturing capabilities are being utilized.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations. The Army Contracting Command would be responsible for monitoring performance, adherence to terms, and financial oversight. The fixed-price with economic price adjustment (FPEPA) clause requires careful monitoring of price adjustments to ensure they are justified and do not lead to excessive costs. Transparency is generally maintained through contract databases, but detailed performance metrics are often internal.

Related Government Programs

Department of Defense Ammunition Procurement
Defense Industrial Base Manufacturing Contracts
Army Ordnance Supply Chain
General Dynamics Defense Contracts

Risk Flags

Economic Price Adjustment Clause Risk
Single Source Dependency Risk (if competition was limited in practice)
Supply Chain Disruption Risk
Quality Control and Specification Adherence Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $230.4 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC. M795 METAL PARTS

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS OTS (WILKES BARRE), 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 $230.4 million.

What is the period of performance?

Start: 2021-03-24. End: 2026-01-30.

What specific types of metal parts are being procured under this contract, and what is their intended use?

The provided data indicates the NAICS code is 332993, 'Ammunition (except Small Arms) Manufacturing.' This strongly suggests that the 'M795 METAL PARTS' are components for ammunition, likely related to artillery shells or other ordnance, excluding small arms ammunition. These parts are critical for the assembly of functional munitions required by the Department of the Army for training, readiness, and operational deployment. Without access to the detailed contract line items or specifications, the precise nature of each 'metal part' remains unspecified, but their classification points towards explosive ordnance components.

How does the $230M contract value compare to historical spending on similar metal parts or ammunition components by the Department of Defense?

Comparing the $230M contract value requires context on the specific 'M795 METAL PARTS' and their historical procurement volumes. If these are standard components for widely used munitions, this value might represent a significant portion of annual demand. However, if they are for specialized or newly developed ordnance, the value could reflect initial production runs or lower-volume, high-cost items. Historical data from sources like the Federal Procurement Data System (FPDS) or agency budget justifications would be needed to establish a benchmark. Given the long performance period (2021-2026), the annual spending rate is approximately $40-50 million, which is substantial but needs to be evaluated against the total defense budget and specific ordnance needs.

What are the key performance indicators (KPIs) and quality assurance measures in place for this contract to ensure the metal parts meet stringent military specifications?

While specific KPIs are not detailed in the provided summary, defense contracts of this nature typically include rigorous quality assurance (QA) provisions. These often involve detailed technical specifications, material certifications, dimensional inspections, and performance testing of the manufactured parts. The Department of the Army's quality assurance representatives (QARs) would likely be involved in inspecting the contractor's facilities and products. Failure to meet stringent military specifications could result in rejection of goods, contract penalties, or termination. The 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) contract type implies that the government is paying a set price for conforming goods, underscoring the importance of quality control.

What is the track record of General Dynamics OTS (Wilkes Barre), LLC, in fulfilling similar defense manufacturing contracts, particularly for ammunition components?

General Dynamics is a major defense contractor with a long history of producing a wide range of military equipment and components. General Dynamics Ordnance and Tactical Systems (OTS), specifically, is known for its expertise in munitions, including artillery shells, mortar systems, and related components. Their track record typically involves large-scale production, adherence to strict quality standards, and delivery to various branches of the U.S. military and allied nations. While specific performance details for this exact contract are not provided, the company's established position in the defense sector suggests a generally reliable capability for fulfilling such requirements. However, individual contract performance can vary, and a deeper dive into past contract awards and performance reviews would offer a more granular assessment.

What are the potential risks associated with the 'economic price adjustment' (EPA) clause in this contract, and how are they mitigated?

The economic price adjustment (EPA) clause in this contract allows for adjustments to the contract price based on fluctuations in specified economic factors, typically raw material costs, labor rates, or other input prices. The primary risk for the government is potential cost increases if these factors rise significantly over the contract period, leading to higher-than-anticipated expenditures. Mitigation strategies often include defining specific indices or formulas for adjustment, setting caps on the total adjustment allowed, requiring detailed documentation from the contractor to justify price changes, and conducting thorough government review of adjustment requests. The 'FIXED PRICE' nature of the base contract aims to provide some cost certainty, but the EPA introduces a degree of cost uncertainty that requires diligent oversight.

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

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

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 1500 HIGHWAY 315 BLVD, WILKES BARRE, PA, 18702

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

Financial Breakdown

Contract Ceiling: $230,428,502

Exercised Options: $230,428,502

Current Obligation: $230,428,502

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $63,511,854

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15QKN19D0084

IDV Type: IDC

Timeline