DoD awards $22.8M delivery order for ordnance accessories, with a 549-day performance period

Contract Overview

Contract Amount: $22,796,523 ($22.8M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2024-08-27

End Date: 2026-02-27

Contract Duration: 549 days

Daily Burn Rate: $41.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR VARIOUS GOVERNMENT CUSTOMERS FOR QUARTER 3 FISCAL YEAR 2024.

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: DELIVERY ORDER FOR VARIOUS GOVERNMENT CUSTOMERS FOR QUARTER 3 FISCAL YEAR 2024. Key points: 1. Contract value represents a moderate investment within the broader defense procurement landscape. 2. Full and open competition suggests a potentially competitive pricing environment. 3. The fixed-price contract type shifts performance risk to the contractor. 4. Delivery order structure allows for flexible procurement of specific needs. 5. Performance period of nearly 1.5 years provides a defined execution timeline. 6. The contract falls under the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' NAICS code.

Value Assessment

Rating: good

The award amount of $22.8 million for a delivery order is within a typical range for specialized defense components. Benchmarking against similar contracts for ordnance accessories is challenging without more specific product details, but the firm fixed-price structure suggests the contractor bears the risk of cost overruns. The contract's value appears reasonable given the 549-day performance period and the nature of defense procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and value for the government. The agency sought proposals from a wide range of potential suppliers.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the pool of potential offerors, increasing the likelihood of receiving competitive bids and securing favorable pricing for defense articles.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential ordnance accessories. This contract supports the operational readiness of military forces. The geographic impact is primarily within the United States, where the contractor is based and where the goods will likely be utilized. Workforce implications are tied to the manufacturing and supply chain operations of the awarded contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits assessment of competitive intensity.
Details on specific ordnance accessories are not provided, hindering granular value analysis.
Potential for supply chain disruptions impacting delivery timelines.

Positive Signals

Firm fixed-price contract mitigates cost escalation risk for the government.
Full and open competition suggests a robust market for these goods.
Defined performance period provides clear expectations for delivery.

Sector Analysis

This contract falls within the broader defense industrial base, specifically focusing on the manufacturing of ordnance and related accessories. The market for such specialized components is characterized by stringent quality requirements, long lead times, and a relatively concentrated group of experienced manufacturers. Spending in this sub-sector is driven by military readiness needs and modernization programs. Comparable spending benchmarks would typically be found within the Department of Defense's procurement data for similar weapon system components.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor, KONGSBERG DEFENCE & AEROSPACE AS, is likely a large business, and any subcontracting opportunities would depend on their internal procurement strategies and supply chain needs, rather than a mandated small business participation goal.

Oversight & Accountability

Oversight for this delivery order will be managed by the Department of the Army, a component of the Department of Defense. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified goods within the agreed timeframe and quality standards. Transparency is facilitated through contract award databases, though specific performance metrics and detailed oversight reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Ordnance and Ammunition Manufacturing
Defense Supply Chain Management
Military Equipment Procurement

Risk Flags

Potential for supply chain disruptions impacting delivery.
Risk of delivered goods not meeting stringent military specifications.
Dependence on contractor's manufacturing capacity and quality control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to KONGSBERG DEFENCE & AEROSPACE AS. DELIVERY ORDER FOR VARIOUS GOVERNMENT CUSTOMERS FOR QUARTER 3 FISCAL YEAR 2024.

Who is the contractor on this award?

The obligated recipient is KONGSBERG DEFENCE & AEROSPACE AS.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.8 million.

What is the period of performance?

Start: 2024-08-27. End: 2026-02-27.

What is the track record of KONGSBERG DEFENCE & AEROSPACE AS with the Department of Defense?

KONGSBERG DEFENCE & AEROSPACE AS has a history of contracts with the Department of Defense, primarily in areas related to defense systems, aerospace components, and related services. While this specific delivery order is for ordnance accessories, the company's broader portfolio suggests experience in meeting stringent military specifications and delivery requirements. Analyzing their past performance on similar contracts, including on-time delivery rates, quality compliance, and any past disputes or contract modifications, would provide a more comprehensive understanding of their reliability and capability in fulfilling this current award. Publicly available contract databases can offer insights into the volume and types of previous awards to the company.

How does the value of this delivery order compare to typical spending on ordnance accessories by the DoD?

The $22.8 million value of this delivery order is a moderate figure within the context of overall Department of Defense spending on ordnance and accessories. The DoD procures a vast array of such items, ranging from small arms ammunition to complex artillery shells and related components. Individual delivery orders can vary significantly in value based on quantity, type of ordnance, and specific military application. While this award is substantial for a single order, it represents a fraction of the total annual budget allocated to ordnance procurement. Benchmarking requires comparing it against similar-sized orders for comparable items or against the total annual spend for the specific NAICS code (332994) to understand its relative significance.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential delays in delivery due to manufacturing complexities or supply chain disruptions, and the risk of the delivered ordnance accessories not meeting stringent military specifications. Mitigation strategies are primarily embedded in the contract terms. The firm fixed-price (FFP) structure shifts the financial risk of cost overruns to the contractor, KONGSBERG DEFENCE & AEROSPACE AS. The defined performance period (549 days) sets clear expectations for delivery timelines. Furthermore, the 'full and open competition' process aims to select a contractor with a proven capability to meet quality standards. Post-award, the Department of the Army will oversee adherence to specifications and delivery schedules, with potential penalties for non-compliance.

What is the expected program effectiveness or impact of these ordnance accessories?

The program effectiveness and impact of these ordnance accessories are directly tied to enhancing the operational readiness and capabilities of the Department of Defense forces. These components are critical for the functioning of various weapon systems, supporting infantry, artillery, or other combat platforms. By ensuring a supply of necessary accessories, the contract contributes to the military's ability to execute its missions, maintain equipment, and respond to threats. The effectiveness is measured by the reliability and performance of the delivered items in real-world operational scenarios and training exercises, ultimately supporting national security objectives.

What are the historical spending patterns for ordnance accessories by the Department of the Army?

Historical spending patterns for ordnance accessories by the Department of the Army show consistent and significant investment driven by ongoing military operations, training requirements, and equipment modernization. The Army procures a wide range of ordnance, from small arms ammunition to larger caliber projectiles and related components. Spending fluctuates based on geopolitical conditions, strategic priorities, and budget allocations. Analyzing historical data for NAICS code 332994 (Small Arms, Ordnance, and Ordnance Accessories Manufacturing) and related procurement categories would reveal trends in contract values, types of awards (e.g., fixed-price vs. cost-plus), and key contractors. This specific $22.8 million delivery order fits within this established pattern of substantial, recurring procurement.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: KIRKEGAARDSVEIEN 45, KONGSBERG

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $22,796,523

Exercised Options: $22,796,523

Current Obligation: $22,796,523

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15QKN23D0003

IDV Type: IDC

Timeline