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

State: California Government Spending

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: ManufacturingOther Fabricated Metal Product ManufacturingAmmunition (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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