DoD Awards $68.9M Ammunition Contract to Poongsan Corporation, Not Competed

Contract Overview

Contract Amount: $68,900,000 ($68.9M)

Contractor: Poongsan Corporation

Awarding Agency: Department of Defense

Start Date: 2023-01-06

End Date: 2024-03-31

Contract Duration: 450 days

Daily Burn Rate: $153.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD FOR JPEO AA.

Plain-Language Summary

Department of Defense obligated $68.9 million to POONGSAN CORPORATION for work described as: AWARD FOR JPEO AA. Key points: 1. Significant award value of $68.9 million for ammunition manufacturing. 2. Sole-source award to Poongsan Corporation raises questions about competition. 3. Risk of inflated pricing due to lack of competitive bidding. 4. Ammunition manufacturing sector is critical for national defense.

Value Assessment

Rating: questionable

The contract value of $68.9 million for ammunition manufacturing is substantial. Without competitive bidding, it's difficult to assess if this price is fair or if it represents a premium compared to what could be achieved through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This significantly limits price discovery and may lead to higher costs for taxpayers as there was no market pressure to drive down the price.

Taxpayer Impact: The lack of competition for this $68.9 million contract means taxpayers may be paying more than necessary for essential ammunition.

Public Impact

Ensures supply of critical ammunition for the Department of the Army. Potential for higher costs due to non-competitive award. Impacts the defense industrial base and supplier diversity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of price competition
Potential for overpayment

Positive Signals

Ensures supply of critical defense material
Firm Fixed Price contract type limits cost overruns

Sector Analysis

This award falls within the defense sector, specifically ammunition manufacturing. Spending in this area is crucial for national security, but competitive procurement is vital to ensure cost-effectiveness.

Small Business Impact

The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small businesses were considered or had the capability to compete for this specific requirement.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price paid is reasonable and that future procurements are competed whenever possible.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition.
Potential for non-competitive pricing.
Lack of transparency in price justification.
Dependency on a single supplier.
No small business participation indicated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.9 million to POONGSAN CORPORATION. AWARD FOR JPEO AA.

Who is the contractor on this award?

The obligated recipient is POONGSAN CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $68.9 million.

What is the period of performance?

Start: 2023-01-06. End: 2024-03-31.

What is the justification for the sole-source award of this $68.9 million ammunition contract?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, urgent needs, or specific technical requirements. Without further details, it's difficult to ascertain the precise reason, but it necessitates a review to ensure it aligns with federal procurement regulations and best practices.

What is the estimated cost savings if this contract had been competed?

Estimating cost savings from a hypothetical competition is challenging without market research data. However, competitive bidding typically drives prices down by 10-30% or more, depending on the market. For a $68.9 million contract, this could translate to millions in potential savings for the government and taxpayers.

How does this award impact the readiness and supply chain for the Department of the Army's ammunition needs?

Awarding this contract ensures a specific supply of ammunition, contributing to the Army's readiness. However, relying on a sole-source provider for a significant portion of ammunition needs could create supply chain vulnerabilities if that provider faces production issues or geopolitical challenges. Diversifying suppliers through competition can mitigate such risks.

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

Solicitation ID: W15QKN23R0023

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 134 PYEONGTAEKHANG-RO 156BEON-GIL, POSEUNG-EUP, PYEONGTAEK

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $151,580,000

Exercised Options: $68,900,000

Current Obligation: $68,900,000

Actual Outlays: $68,900,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline