DoD awards $87.1M for 155mm artillery shells, with 91.8% of contract value to General Dynamics OTS

Contract Overview

Contract Amount: $87,104,697 ($87.1M)

Contractor: General Dynamics OTS (wilkes Barre), LLC

Awarding Agency: Department of Defense

Start Date: 2023-07-25

End Date: 2026-02-28

Contract Duration: 949 days

Daily Burn Rate: $91.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: MANUFACTURE AND DELIVERY OF 155MM M795 METAL PARTS FOR DOD STOCKPILE REPLENISHMENT OF UKRAINE SUPPLIES.

Place of Performance

Location: WILKES BARRE, LUZERNE County, PENNSYLVANIA, 18702

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $87.1 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC for work described as: MANUFACTURE AND DELIVERY OF 155MM M795 METAL PARTS FOR DOD STOCKPILE REPLENISHMENT OF UKRAINE SUPPLIES. Key points: 1. Contract focuses on replenishing U.S. stocks of 155mm artillery shells, crucial for supporting Ukraine. 2. Significant portion of the contract value is concentrated with a single contractor, General Dynamics OTS. 3. The contract type, Fixed Price with Economic Price Adjustment, introduces potential for cost fluctuations. 4. Delivery is scheduled over a 949-day period, indicating a sustained production requirement. 5. The ammunition manufacturing sector is critical for national defense and international security. 6. This award represents a substantial investment in maintaining and expanding munition reserves.

Value Assessment

Rating: good

The contract value of $87.1 million for 155mm M795 metal parts appears reasonable given the scale and strategic importance of munition production. Benchmarking against similar large-scale ammunition manufacturing contracts would provide further context, but the fixed-price nature with economic adjustments suggests an effort to manage costs while accounting for material and labor volatility. The significant portion awarded to General Dynamics OTS indicates their established capacity and role in this specialized manufacturing sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the data shows that the vast majority of the contract value, 91.8% ($80.0M out of $87.1M), was awarded to General Dynamics OTS (Wilkes Barre), LLC. This suggests that while competition was allowed, General Dynamics OTS was the most competitive or capable bidder for this specific requirement, potentially due to specialized manufacturing capabilities or existing production lines.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a competitive process. However, the concentration of the award value with one entity warrants attention to ensure ongoing market health and prevent future sole-source situations.

Public Impact

The primary beneficiaries are the U.S. Department of Defense and allied nations requiring artillery support, particularly in the context of the conflict in Ukraine. The contract delivers essential metal parts for 155mm artillery shells, contributing directly to munition stockpile replenishment. The manufacturing will occur in Wilkes Barre, Pennsylvania, supporting the industrial base in that region. This contract supports jobs in the defense manufacturing sector, specifically within ammunition production facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to costs exceeding initial projections if market prices for raw materials or labor increase significantly.
High concentration of award value to a single contractor may limit future competitive opportunities if other manufacturers do not develop comparable capabilities.
Long delivery period (949 days) could be impacted by supply chain disruptions or unforeseen production challenges.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process initially.
Contract addresses a critical national defense need for artillery ammunition.
Fixed-price elements provide some cost certainty for a portion of the contract value.

Sector Analysis

The defense manufacturing sector, particularly for munitions, is a critical component of national security. The market for 155mm artillery shells is influenced by geopolitical events and sustained demand from military operations. While specific market size data for 155mm shell parts is not readily available, the overall defense industrial base for munitions is substantial, with significant government investment. This contract fits within the broader category of ammunition manufacturing, a specialized niche within the broader metal fabrication industry.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the specialized nature of ammunition manufacturing and the large contract value, it is likely that larger, established defense contractors are the primary participants. There is no explicit information on subcontracting plans for small businesses, but it is common for large defense contracts to include provisions for small business participation, which would need to be verified through the contract details.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army, a component of the Department of Defense. Accountability measures are typically embedded within the contract terms, including delivery schedules, quality control standards, and payment milestones. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

DoD Ammunition Procurement
Ukraine Security Assistance Initiative
Artillery Systems Manufacturing
Defense Industrial Base Modernization

Risk Flags

Potential for cost overruns due to economic price adjustment.
High concentration of award value to a single contractor.
Dependence on specific raw material supply chains.
Long production and delivery timeline.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $87.1 million to GENERAL DYNAMICS OTS (WILKES BARRE), LLC. MANUFACTURE AND DELIVERY OF 155MM M795 METAL PARTS FOR DOD STOCKPILE REPLENISHMENT OF UKRAINE SUPPLIES.

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 $87.1 million.

What is the period of performance?

Start: 2023-07-25. End: 2026-02-28.

What is the historical spending trend for 155mm artillery shell components by the Department of Defense?

Analyzing historical spending on 155mm artillery shell components requires access to detailed procurement data over several fiscal years. Generally, spending in this category can fluctuate based on global security needs, operational tempo, and strategic stockpile objectives. Periods of heightened conflict or perceived threats often lead to increased procurement to replenish or expand reserves. The current award of $87.1 million suggests a significant current need, potentially driven by recent geopolitical events. Without specific historical data, it's difficult to establish a precise trend, but such awards are typically part of a larger, ongoing effort to maintain munition readiness.

How does the unit cost of these 155mm M795 metal parts compare to similar contracts or market benchmarks?

Determining the precise unit cost for the metal parts of the 155mm M795 shells is challenging without knowing the exact quantity of parts being procured for the $87.1 million. The contract is for 'metal parts,' not complete rounds, and the total number of parts is not specified. If we assume a certain number of parts per shell and a typical shell production cost, we could attempt a rough estimate. However, without explicit unit pricing or a breakdown of the total quantity, a direct comparison to market benchmarks or similar contracts is not feasible. The economic price adjustment clause also introduces variability, making a fixed unit cost comparison difficult.

What is General Dynamics OTS's track record in fulfilling large-scale ammunition manufacturing contracts for the DoD?

General Dynamics Ordnance and Tactical Systems (OTS) has a long-standing and significant track record in manufacturing various munitions for the U.S. Department of Defense, including artillery shells. They are a major supplier for many critical defense programs. Their history includes producing components and complete rounds for various calibers, often under large, multi-year contracts. While specific performance metrics for every contract are not publicly detailed, their continued selection for substantial awards like this one indicates a generally reliable performance history and established capability in meeting the DoD's demanding production and quality requirements for munitions.

What are the primary risks associated with the 'Fixed Price with Economic Price Adjustment' contract type for this ammunition order?

The primary risk associated with a Fixed Price with Economic Price Adjustment (FPEPA) contract for ammunition manufacturing lies in cost escalation. While the base price is fixed, the economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specified economic factors, typically related to labor and material costs. If the cost of raw materials (like steel) or labor increases significantly beyond anticipated levels during the contract period (949 days), the total cost to the government could rise above the initially estimated $87.1 million. This introduces a degree of cost uncertainty for the DoD compared to a firm fixed-price contract.

How does this contract contribute to the DoD's overall strategy for munitions stockpile readiness and modernization?

This contract directly addresses the DoD's strategy for munitions stockpile readiness by focusing on the replenishment of 155mm artillery shells. These shells are in high demand globally, and maintaining adequate reserves is crucial for both current operational support and future contingency planning. The award signifies a commitment to bolstering production capacity and ensuring that the U.S. and its allies have sufficient quantities of essential munitions. It supports the broader goal of modernizing and sustaining the defense industrial base necessary to meet long-term security requirements.

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

Solicitation ID: W15QKN17R0018

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: $87,104,697

Exercised Options: $87,104,697

Current Obligation: $87,104,697

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $14,617,016

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