DoD Awards $222M Undefinitized Contract for Ukraine Ammunition Components
Contract Overview
Contract Amount: $221,997,208 ($222.0M)
Contractor: Armtec Defense Products CO.
Awarding Agency: Department of Defense
Start Date: 2024-09-26
End Date: 2028-05-31
Contract Duration: 1,343 days
Daily Burn Rate: $165.3K/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. (PAA FUNDS)
Place of Performance
Location: COACHELLA, RIVERSIDE County, CALIFORNIA, 92236
Plain-Language Summary
Department of Defense obligated $222.0 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. (PAA FUNDS) Key points: 1. Significant investment in critical ammunition components for Ukraine. 2. Sole-source award to Armtec Defense Products raises competition concerns. 3. Long-term delivery schedule (2024-2028) suggests sustained need. 4. High value indicates substantial program scope and potential for cost overruns.
Value Assessment
Rating: questionable
The contract is undefinitized, meaning final pricing is not yet established. This poses a risk of future price increases and potential overpayment compared to market rates for similar combustible case assemblies.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Armtec Defense Products. This lack of competition limits price discovery and may result in a higher price than if multiple vendors had bid.
Taxpayer Impact: The sole-source nature and undefinitized status of this large contract increase the risk of taxpayer funds being spent inefficiently.
Public Impact
Supports ongoing military operations in Ukraine by providing essential ammunition components. Ensures continued production and supply chain for critical defense materiel. Potential for follow-on contracts or increased scope based on evolving needs. Highlights reliance on specific defense contractors for specialized components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Undefinitized contract action (UCA)
- Sole-source award
- Long contract duration
- Lack of small business participation
Positive Signals
- Supports critical national security interest (Ukraine)
- Established contractor with relevant experience
- Firm Fixed Price contract type (once definitized)
Sector Analysis
This contract falls under the Ammunition (except Small Arms) Manufacturing sector. Spending in this sector is often driven by geopolitical events and defense readiness requirements, with benchmarks varying significantly based on the specific type of ammunition and global demand.
Small Business Impact
The data indicates that small businesses were not involved in this specific contract action, as the award is to a single, likely large, prime contractor. There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The use of an undefinitized contract action requires careful oversight to ensure timely definitization and fair pricing. The Department of the Army's contracting office is responsible for managing this award and ensuring accountability.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Risk of cost growth due to undefinitized contract
- Lack of competitive bidding may lead to inflated prices
- Long contract duration increases exposure to market fluctuations
- Potential for performance issues with a sole-source provider
- Limited visibility into small business participation
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 $222.0 million to ARMTEC DEFENSE PRODUCTS CO.. UKRAINE: UNDEFINITIZED CONTRACT ACTION (UCA) DELIVERY ORDER IS FOR THE MACS M231/M232-SERIES (M232A2) COMBUSTIBLE CASE ASSEMBLIES. (PAA FUNDS)
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 $222.0 million.
What is the period of performance?
Start: 2024-09-26. End: 2028-05-31.
What is the projected final price once the contract is definitized, and how does it compare to historical pricing for similar components?
The final price is not yet determined as the contract is undefinitized. A thorough review of historical pricing data for M231/M232-series combustible case assemblies and benchmarking against similar components procured competitively is crucial. This will help assess if the eventual negotiated price represents fair and reasonable value for the taxpayer.
What steps are being taken to mitigate the risks associated with a sole-source, undefinitized contract action?
Mitigation strategies should include aggressive negotiation timelines for definitization, robust cost analysis by the government, and potentially exploring alternative sources for future procurements to foster competition. Clear communication channels with the contractor regarding performance expectations and cost controls are also vital.
How will the effectiveness of these combustible case assemblies be monitored throughout the contract period to ensure they meet operational requirements?
Effectiveness will be monitored through rigorous testing and quality assurance processes, including acceptance testing of delivered components and performance feedback from end-users in the field. Regular reviews of contractor performance data and defect reporting will be essential to track and ensure the reliability of the assemblies.
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
Parent Company: Transdigm Group Incorporated
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: $221,997,208
Exercised Options: $221,997,208
Current Obligation: $221,997,208
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: 2024-09-26
Current End Date: 2028-05-31
Potential End Date: 2028-05-31 00:00:00
Last Modified: 2025-12-08
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