Department of the Army awards $29.7M for modular artillery charge systems to Armtec Defense Products Co

Contract Overview

Contract Amount: $29,668,418 ($29.7M)

Contractor: Armtec Defense Products CO.

Awarding Agency: Department of Defense

Start Date: 2021-03-10

End Date: 2023-09-30

Contract Duration: 934 days

Daily Burn Rate: $31.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER W15QKN21F0147 UNDER CONTRACT W15QKN-21-D-0005 IS TO PURCHASE MODULAR ARTILLERY CHARGE SYSTEMS (MACS) M231/M232-SERIES COMBUSTIBLE CASE ASSEMBLIES TO SUPPORT THE 155MM PROPELLING CHARGE. 2 CONTRACT ACTION REPORTS PROCESSED.

Place of Performance

Location: COACHELLA, RIVERSIDE County, CALIFORNIA, 92236

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $29.7 million to ARMTEC DEFENSE PRODUCTS CO. for work described as: DELIVERY ORDER W15QKN21F0147 UNDER CONTRACT W15QKN-21-D-0005 IS TO PURCHASE MODULAR ARTILLERY CHARGE SYSTEMS (MACS) M231/M232-SERIES COMBUSTIBLE CASE ASSEMBLIES TO SUPPORT THE 155MM PROPELLING CHARGE. 2 CONTRACT ACTION REPORTS PROCESSED. Key points: 1. Contract awarded for critical components of 155mm artillery systems, indicating a focus on maintaining and enhancing existing defense capabilities. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and the absence of competitive pressure. 3. A significant contract duration of 934 days suggests a substantial and ongoing need for these specialized ammunition components. 4. The procurement falls under the Ammunition (except Small Arms) Manufacturing sector, highlighting its importance in the defense industrial base. 5. The contract's value, while substantial, needs to be benchmarked against historical spending for similar systems to assess value for money.

Value Assessment

Rating: fair

The contract value of $29.7 million for modular artillery charge systems appears to be a significant investment. Without direct comparable contracts for the M231/M232-series combustible case assemblies, it is difficult to definitively benchmark the pricing. However, the absence of competition suggests a potential for higher costs than if the contract had been competed. Further analysis would require access to historical pricing data for these specific components or similar items from other manufacturers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that the Department of the Army did not benefit from a bidding process that could have potentially driven down prices and fostered innovation among multiple suppliers.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without alternative offers, there is less assurance that the price reflects the best possible value achievable in a competitive market.

Public Impact

The primary beneficiaries are the U.S. Army units requiring 155mm artillery capabilities, ensuring they have the necessary ammunition components for operational readiness. The contract delivers M231/M232-series combustible case assemblies, which are critical for the effective functioning of the 155mm artillery system. The geographic impact is primarily within the defense supply chain, with potential manufacturing and logistics activities centered around the contractor's facilities in California. Workforce implications may include sustained employment at Armtec Defense Products Co. and its suppliers, contributing to the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may stifle innovation and reduce market responsiveness for future procurements.
Dependence on a single supplier for critical defense components poses a supply chain risk.

Positive Signals

Contract ensures the availability of essential components for a key military artillery system.
Award to an established defense contractor suggests a degree of reliability in production and delivery.
Fixed-price contract type provides some cost certainty for the government, assuming the price was negotiated effectively.

Sector Analysis

The procurement of ammunition components falls within the broader defense manufacturing sector, specifically focusing on ordnance and explosives. This sector is characterized by high barriers to entry, stringent quality control requirements, and significant government investment. The market for such specialized components is often limited to a few key players capable of meeting military specifications. The value of this contract, approximately $29.7 million, is moderate within the context of large defense procurements, but significant for the specific niche of modular artillery charge systems.

Small Business Impact

This contract was awarded to Armtec Defense Products Co. and does not appear to have a small business set-aside component. There is no explicit information provided regarding subcontracting plans for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate directly in this specific contract, though they may be suppliers to the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The contract action reports provide a basic level of transparency regarding the award. However, the sole-source nature necessitates robust internal review and justification processes to ensure fair and reasonable pricing. The Inspector General's office within the Department of Defense may conduct audits or investigations if concerns regarding waste, fraud, or abuse arise.

Related Government Programs

155mm Artillery Systems
Modular Artillery Charge Systems (MACS)
Combustible Case Propelling Charges
Ammunition Manufacturing
Defense Ammunition Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.7 million to ARMTEC DEFENSE PRODUCTS CO.. DELIVERY ORDER W15QKN21F0147 UNDER CONTRACT W15QKN-21-D-0005 IS TO PURCHASE MODULAR ARTILLERY CHARGE SYSTEMS (MACS) M231/M232-SERIES COMBUSTIBLE CASE ASSEMBLIES TO SUPPORT THE 155MM PROPELLING CHARGE. 2 CONTRACT ACTION REPORTS PROCESSED.

Who is the contractor on this award?

The obligated recipient is ARMTEC DEFENSE PRODUCTS CO..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.7 million.

What is the period of performance?

Start: 2021-03-10. End: 2023-09-30.

What is the track record of Armtec Defense Products Co. in supplying similar defense components?

Armtec Defense Products Co. has a history of supplying defense products, including ammunition components. As a known entity in the defense industrial base, they are likely experienced in meeting the stringent requirements of military contracts. However, specific details regarding their performance on contracts for M231/M232-series combustible case assemblies would require a deeper dive into contract performance databases and historical award data. Their ability to secure this sole-source award suggests they possess the necessary capabilities and potentially proprietary knowledge or manufacturing processes for these specific charge systems.

How does the awarded price compare to market rates for similar ammunition components?

Benchmarking the awarded price of $29.7 million for the M231/M232-series combustible case assemblies against market rates is challenging due to the specialized nature of the components and the sole-source award. Typically, competitive bidding allows for price discovery and comparison. In the absence of competition, it is difficult to ascertain if the price is optimal. A thorough value analysis would involve comparing this price to historical contracts for the same or similar items, considering inflation, quantity, and any technological advancements. Without such comparative data, assessing the value for money remains speculative.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract include potential price inflation due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a heightened supply chain risk stemming from reliance on a single supplier. If Armtec Defense Products Co. experiences production issues or faces financial difficulties, the Department of the Army could face significant delays or disruptions in obtaining these critical ammunition components. Furthermore, the absence of competition limits the government's leverage in future negotiations.

How effective is the Department of the Army in ensuring value for money on sole-source procurements?

The effectiveness of the Department of the Army in ensuring value for money on sole-source procurements relies heavily on robust internal processes, including thorough cost and price analysis, negotiation strategies, and market research to justify the sole-source determination. Regulations often require detailed justification and approval for sole-source awards. However, the inherent lack of competition means that the government's ability to secure the best possible price is diminished compared to competed contracts. Continuous monitoring of contractor performance and periodic re-evaluation of the market are crucial for mitigating risks and ensuring value.

What are the historical spending patterns for modular artillery charge systems?

Historical spending patterns for modular artillery charge systems are not readily available in the provided data. This specific contract action report (W15QKN21F0147) is one of two processed for this delivery order under a larger contract. To understand historical spending, one would need to analyze previous contracts awarded for the M231/M232-series or similar combustible case assemblies over several fiscal years. This would involve searching federal procurement databases for relevant contract awards, considering factors like quantity, unit price, and contract type to identify trends and significant spending fluctuations.

What is the strategic importance of the M231/M232-series combustible case assemblies for the U.S. Army?

The M231/M232-series combustible case assemblies are strategically important as they are essential components for the 155mm artillery system, a cornerstone of U.S. Army firepower. These assemblies facilitate the safe and efficient firing of artillery rounds by containing the propellant charge. Ensuring a reliable supply of these components is critical for maintaining the operational readiness and combat effectiveness of artillery units, which are vital for both offensive and defensive operations. Their availability directly impacts the Army's ability to project power and support ground forces.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 85901 AVE 53, COACHELLA, CA, 92236

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: $29,668,418

Exercised Options: $29,668,418

Current Obligation: $29,668,418

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN21D0005

IDV Type: IDC

Timeline