DoD awards $5.6M for gun stand systems, with limited competition and a long performance period

Contract Overview

Contract Amount: $5,621,362 ($5.6M)

Contractor: Merrill Technologies Group, LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-30

End Date: 2026-03-15

Contract Duration: 531 days

Daily Burn Rate: $10.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROOF GUN STAND SYSTEM AND SPARES.

Place of Performance

Location: SAGINAW, SAGINAW County, MICHIGAN, 48602

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $5.6 million to MERRILL TECHNOLOGIES GROUP, LLC for work described as: PROOF GUN STAND SYSTEM AND SPARES. Key points: 1. The contract value of $5.6 million for gun stand systems and spares appears to be a significant investment in ordnance capabilities. 2. The 'NOT COMPETED' award type raises questions about the justification for not seeking broader market participation. 3. A performance period extending over 531 days suggests a need for sustained delivery and potential for follow-on work. 4. The fixed-price contract type shifts performance risk to the contractor, which can be beneficial if managed effectively. 5. The absence of small business set-aside flags indicates this contract was not specifically targeted to support small business growth. 6. The North American Industry Classification System (NAICS) code 332994 points to a specialized manufacturing sector for arms and ordnance.

Value Assessment

Rating: fair

Benchmarking the value of this $5.6 million contract for gun stand systems is challenging without specific details on the quantity and technical specifications of the systems. However, the 'NOT COMPETED' status suggests a potential lack of price discovery through competitive bidding. The firm fixed-price nature is positive for budget certainty, but the overall value for money is difficult to assess without comparative data on similar systems or market rates for specialized ordnance manufacturing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating that a competitive process was not utilized. This could be due to various reasons, such as a sole-source justification, urgent need, or a lack of available qualified bidders. The absence of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through bidding.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective solution available in the market, as the price was not driven down by multiple offers.

Public Impact

The Department of Defense, specifically the Department of the Army, is the primary beneficiary, acquiring essential equipment for its operations. The contract delivers proof gun stand systems and necessary spares, crucial for the effective deployment and maintenance of ordnance. The geographic impact is centered in Michigan, where Merrill Technologies Group, LLC is located, potentially supporting local manufacturing jobs. The contract supports the defense industrial base, ensuring the availability of specialized manufacturing capabilities for military hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Limited transparency into the justification for sole-source award.
Potential for missed opportunities to engage small businesses in the supply chain.

Positive Signals

Firm fixed-price contract provides budget certainty.
Contractor is based in Michigan, potentially supporting domestic manufacturing.
Long performance period allows for sustained delivery and integration.

Sector Analysis

The contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of small arms, ordnance, and related accessories (NAICS 332994). This is a highly specialized area requiring significant technical expertise and adherence to stringent quality standards. The market for such defense-related manufacturing is often characterized by limited players and long procurement cycles, with government contracts forming a substantial portion of demand.

Small Business Impact

The contract data indicates that this award was not a small business set-aside, and the 'sb' field is false. This suggests that small businesses were not specifically targeted for this procurement. There is no explicit information on subcontracting plans, but the lack of a small business focus means that opportunities for small business participation may be limited unless Merrill Technologies Group, LLC voluntarily engages them in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations, managed by the Department of the Army. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods within budget. Transparency is limited by the 'NOT COMPETED' award, though justifications for such awards are usually documented internally. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Ordnance Manufacturing
Small Arms Manufacturing
Defense Equipment Procurement
Military Hardware Systems
Specialized Manufacturing Contracts

Risk Flags

Lack of Competition
Limited Transparency on Justification
Potential for Higher Cost Due to Sole Source Award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.6 million to MERRILL TECHNOLOGIES GROUP, LLC. PROOF GUN STAND SYSTEM AND SPARES.

Who is the contractor on this award?

The obligated recipient is MERRILL TECHNOLOGIES GROUP, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.6 million.

What is the period of performance?

Start: 2024-09-30. End: 2026-03-15.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which typically implies a sole-source award or a limited competition where only one offer was solicited or received. The specific justification for this approach is not detailed in the provided data. Common reasons for sole-source awards include urgent and compelling needs, the unavailability of other sources, or specific technological requirements that only one contractor can meet. Without further documentation from the Department of Defense, the precise rationale remains unknown. This lack of competition limits the government's ability to leverage market forces for potentially better pricing and broader solution exploration.

How does the $5.6 million contract value compare to similar procurements for gun stand systems?

Direct comparison of the $5.6 million contract value for 'PROOF GUN STAND SYSTEM AND SPARES' to similar procurements is difficult without more granular data on the specific system's capabilities, quantity, and technical specifications. The provided data only includes the total contract value and a general description. Benchmarking would require access to historical contract databases that detail comparable systems, their unit costs, and the competitive environment in which they were awarded. The 'NOT COMPETED' status also suggests that this price may not reflect the outcome of a competitive bidding process, making direct value-for-money comparisons less straightforward.

What are the key performance risks associated with this firm fixed-price contract?

For a firm fixed-price contract, the primary performance risk lies with the contractor, Merrill Technologies Group, LLC. They bear the responsibility for cost overruns if their expenses exceed the agreed-upon price. Key risks include potential delays in manufacturing or delivery due to supply chain disruptions, unforeseen technical challenges in producing the gun stand systems, or quality control issues that may require rework. The government's risk is primarily related to the contractor's ability to meet the specified performance standards and delivery schedule. If the contractor fails to perform, the government may face delays in acquiring critical equipment, though remedies like contract termination or penalties may be available.

What is the historical spending pattern for gun stand systems by the Department of Defense?

The provided data does not include historical spending patterns for gun stand systems. To assess this, one would need to analyze past contract awards for similar items (e.g., ordnance mounts, weapon platforms, firing systems) by the Department of Defense and its branches over several fiscal years. This analysis would involve identifying the total obligated amounts, the number of contracts awarded, the primary contractors, and the competitive landscape for these procurements. Understanding historical spending can reveal trends in demand, pricing fluctuations, and the evolution of technology in this specialized area.

What is the significance of the 531-day duration for this contract?

The contract duration of 531 days (approximately 17.5 months) from the delivery order start date (September 30, 2024) to the estimated completion date (March 15, 2026) indicates a substantial period for production and delivery. This extended timeline suggests that the gun stand systems may be complex to manufacture, require significant lead times for components, or involve a phased delivery schedule. For the Department of the Army, this duration implies a long-term requirement for this equipment, potentially aligning with broader strategic or operational planning cycles. It also allows the contractor, Merrill Technologies Group, LLC, a considerable window to manage production and logistics.

Industry Classification

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

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 400 FLORENCE ST, SAGINAW, MI, 48602

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,621,362

Exercised Options: $5,621,362

Current Obligation: $5,621,362

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15QKN24D0056

IDV Type: IDC

Timeline