DoD Awards $234M for Ammunition Production Acceleration to Armtec Defense Products
Contract Overview
Contract Amount: $234,319,625 ($234.3M)
Contractor: Armtec Defense Products CO.
Awarding Agency: Department of Defense
Start Date: 2023-09-25
End Date: 2026-06-30
Contract Duration: 1,009 days
Daily Burn Rate: $232.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: UKRAINE: UNDEFINITIZED CONTRACT ACTION (UCA) DELIVERY ORDER IS FOR THE MACS M231/M232-SERIES (M232A2) COMBUSTIBLE CASE ASSEMBLIES AND PRODUCTION ACCELERATION/RAMP UP COSTS.
Place of Performance
Location: COACHELLA, RIVERSIDE County, CALIFORNIA, 92236
Plain-Language Summary
Department of Defense obligated $234.3 million to ARMTEC DEFENSE PRODUCTS CO. for work described as: UKRAINE: UNDEFINITIZED CONTRACT ACTION (UCA) DELIVERY ORDER IS FOR THE MACS M231/M232-SERIES (M232A2) COMBUSTIBLE CASE ASSEMBLIES AND PRODUCTION ACCELERATION/RAMP UP COSTS. Key points: 1. Significant investment in ammunition production ramp-up. 2. Sole-source award raises questions about price discovery. 3. Focus on critical defense supplies for Ukraine. 4. Potential for long-term supply chain implications.
Value Assessment
Rating: questionable
The $234.3M award is for production acceleration, making direct price comparisons difficult. However, the lack of competition for such a substantial amount warrants scrutiny regarding potential overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning no other vendors were considered. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition may result in a higher price than if multiple vendors had bid, impacting taxpayer funds.
Public Impact
Ensures continued supply of critical ammunition for Ukraine. Supports domestic defense manufacturing capabilities. Potential for job creation within the defense sector. Highlights reliance on specific manufacturers for defense needs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- Production acceleration costs
Positive Signals
- Critical defense supply
- Supports allied nation
- Domestic manufacturing investment
Sector Analysis
This contract falls under Ammunition (except Small Arms) Manufacturing. Spending in this sector is often driven by geopolitical events and national security priorities, with significant government investment.
Small Business Impact
This contract was awarded to Armtec Defense Products Co., a large business. There is no indication of small business participation in this specific award.
Oversight & Accountability
The Department of the Army awarded this delivery order. Oversight will be crucial to ensure the funds are used effectively for production ramp-up and that costs remain reasonable despite the sole-source nature.
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 inflated costs due to lack of bidding.
- Dependency on a single supplier for critical defense items.
- Urgency of need may bypass standard procurement scrutiny.
- Long-term contract duration could mask cost overruns.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $234.3 million to ARMTEC DEFENSE PRODUCTS CO.. UKRAINE: UNDEFINITIZED CONTRACT ACTION (UCA) DELIVERY ORDER IS FOR THE MACS M231/M232-SERIES (M232A2) COMBUSTIBLE CASE ASSEMBLIES AND PRODUCTION ACCELERATION/RAMP UP COSTS.
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 $234.3 million.
What is the period of performance?
Start: 2023-09-25. End: 2026-06-30.
What is the justification for the sole-source award and how will the government ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs. The government should employ robust cost analysis and negotiation strategies to ensure fair pricing, even without competitive bids. Regular performance reviews and audits are essential to monitor expenditures and verify the necessity of production acceleration costs.
What are the long-term risks associated with relying on a single supplier for critical ammunition components?
Long-term reliance on a single supplier creates significant supply chain vulnerability. Disruptions due to the supplier's operational issues, geopolitical factors affecting their resources, or even their financial stability could halt production. This dependence also reduces leverage for future price negotiations and can stifle innovation from potential competitors.
How will the effectiveness of this production ramp-up be measured to ensure taxpayer value?
Effectiveness will be measured by the contractor's ability to meet agreed-upon production targets and delivery schedules within the allocated budget. Key performance indicators should include increased output volume, reduced lead times, and adherence to quality standards. The government should conduct regular reviews of production metrics and financial expenditures to ensure the investment is yielding the desired results.
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: $234,319,625
Exercised Options: $234,319,625
Current Obligation: $234,319,625
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $7,863,641
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
Start Date: 2023-09-25
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2025-04-22
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