DoD's $14.1M Small Arms Ammunition Delivery Order to UTM Limited Raises Questions on Competition and Value

Contract Overview

Contract Amount: $14,093,491 ($14.1M)

Contractor: UTM Limited

Awarding Agency: Department of Defense

Start Date: 2024-06-27

End Date: 2026-06-30

Contract Duration: 733 days

Daily Burn Rate: $19.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 5.56MM CCMCK OP3 DELIVERY ORDER 6

Plain-Language Summary

Department of Defense obligated $14.1 million to UTM LIMITED for work described as: 5.56MM CCMCK OP3 DELIVERY ORDER 6 Key points: 1. The contract was awarded on a sole-source basis, limiting potential cost savings through competitive bidding. 2. The fixed-price contract structure shifts performance risk to the contractor. 3. The duration of the contract (733 days) suggests a need for sustained supply. 4. The specific product code (332992) indicates a focus on small arms ammunition manufacturing. 5. The absence of small business set-aside flags suggests larger prime contractors are likely involved. 6. The contract's value is moderate within the context of defense procurement.

Value Assessment

Rating: questionable

Benchmarking the value of this $14.1 million delivery order is challenging without more specific details on the ammunition type and quantity. However, the sole-source award mechanism inherently limits the government's ability to ensure the best possible price through market competition. Compared to potentially competitively bid contracts for similar defense articles, this award may represent a higher cost to taxpayers. Further analysis would require comparing unit prices against industry benchmarks for comparable ammunition.

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 among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there was no opportunity for multiple bidders to offer their best prices, potentially leading to a less favorable outcome for the government in terms of cost.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding processes.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will receive essential small arms ammunition. The services delivered include the manufacturing and supply of ammunition critical for training and operational readiness. The geographic impact is likely national, supporting military operations and training across various locations. Workforce implications may include employment within UTM Limited and its supply chain, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency in pricing.
Dependence on a single supplier could create future supply chain risks.
The specific performance metrics and quality assurance measures are not detailed, posing a potential risk to end-user effectiveness.

Positive Signals

The fixed-price contract shifts cost overrun risk to the contractor.
The contract duration suggests a stable, long-term supply relationship.
The award supports the defense industrial base and ensures availability of critical munitions.

Sector Analysis

The defense sector, particularly ammunition manufacturing, is a critical component of national security. This contract falls within the broader category of defense procurement, specifically focusing on small arms ammunition. The market for such goods is often characterized by specialized manufacturing capabilities and long-standing relationships with government agencies. Comparable spending benchmarks would involve analyzing other sole-source or competitively awarded contracts for similar ammunition types and quantities issued by various branches of the U.S. military.

Small Business Impact

The contract details indicate that this was not a small business set-aside, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary contractor, UTM Limited, is likely a larger entity. The absence of specific small business provisions means there is no direct mandate for subcontracting opportunities to be allocated to small businesses, potentially limiting their participation in this specific contract's value chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Accountability measures are embedded in the contract terms, including delivery schedules and specifications. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance or execution.

Related Government Programs

Department of Defense Ammunition Procurement
Small Arms Manufacturing Contracts
Defense Logistics Agency Contracts
Tactical Ammunition Procurement

Risk Flags

Sole-source award limits price competition.
Lack of detailed unit cost data hinders value assessment.
Absence of small business subcontracting requirements.
Limited public information on performance standards and quality assurance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to UTM LIMITED. 5.56MM CCMCK OP3 DELIVERY ORDER 6

Who is the contractor on this award?

The obligated recipient is UTM LIMITED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.1 million.

What is the period of performance?

Start: 2024-06-27. End: 2026-06-30.

What is the specific type and quantity of small arms ammunition being procured under this delivery order?

The provided data indicates the product code is 332992, which corresponds to 'Small Arms Ammunition Manufacturing'. However, the specific caliber, type (e.g., training, ball, armor-piercing), and exact quantity of ammunition are not detailed in the provided data. This level of specificity is crucial for a comprehensive value assessment and for comparing unit costs against market benchmarks. Without this information, it is difficult to determine if the $14.1 million represents a fair price for the goods delivered.

What is UTM Limited's track record with the Department of Defense, particularly for similar ammunition contracts?

Information regarding UTM Limited's specific track record with the Department of Defense for similar ammunition contracts is not provided in the data. A thorough analysis would require reviewing past performance evaluations, contract history, and any reported issues or successes with this contractor on previous defense procurements. Understanding their history is key to assessing reliability and potential risks associated with this sole-source award. A positive track record could partially mitigate concerns arising from the lack of competition.

How does the unit cost of this ammunition compare to industry benchmarks or other government contracts?

The provided data does not include unit cost information, making a direct comparison to industry benchmarks or other government contracts impossible. To perform this analysis, the total contract value ($14.1 million) would need to be divided by the total quantity of ammunition procured. This unit price could then be benchmarked against publicly available pricing data for similar ammunition types from other defense contracts or commercial suppliers. The sole-source nature of this award suggests that such a benchmark comparison might reveal a less competitive price.

What are the specific performance standards and quality assurance measures for the ammunition being supplied?

The provided data does not detail the specific performance standards or quality assurance measures for the small arms ammunition. These are critical components of any defense contract to ensure the ammunition meets military specifications for reliability, accuracy, and safety. A comprehensive risk assessment would require reviewing the contract's technical specifications, testing protocols, and acceptance criteria. The absence of this information in the summary data limits the ability to fully evaluate the quality and effectiveness of the procured items.

What is the historical spending pattern for small arms ammunition by the Department of the Army or DoD?

The provided data focuses on a single delivery order and does not offer historical spending patterns for small arms ammunition by the Department of the Army or the broader DoD. To establish such patterns, one would need to analyze multi-year spending data, identify trends in procurement volume and cost, and understand the factors influencing these patterns (e.g., geopolitical events, training requirements, inventory levels). Understanding historical spending can help contextualize the significance of this $14.1 million award and identify potential anomalies or efficiencies.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition 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: HAMPSTEAD AVENUE, BURY ST EDMUNDS

Business Categories: Category Business, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $14,093,491

Exercised Options: $14,093,491

Current Obligation: $14,093,491

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15QKN21D0035

IDV Type: IDC

Timeline