DoD awards $29.8M for Army spares and parts, with a significant portion allocated to ordnance manufacturing

Contract Overview

Contract Amount: $29,776,718 ($29.8M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2025-01-28

End Date: 2027-05-31

Contract Duration: 853 days

Daily Burn Rate: $34.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR VARIOUS SPARES AND PARTS.

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $29.8 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: DELIVERY ORDER FOR VARIOUS SPARES AND PARTS. Key points: 1. Contract focuses on essential spares and parts, indicating a need for ongoing maintenance and operational readiness. 2. The award is a delivery order under a larger contract, suggesting a pre-established relationship or framework. 3. The primary sector is ordnance manufacturing, highlighting a critical area of defense industrial base. 4. A significant portion of the contract value is tied to specific parts, requiring detailed cost analysis. 5. The contract duration spans over two years, implying sustained demand for these items. 6. Fixed-price contract type aims to control costs, but vigilance is needed for potential overruns on specific items.

Value Assessment

Rating: good

The total award of $29.8 million for spares and parts appears reasonable given the duration and the nature of defense procurement. Benchmarking against similar contracts for ordnance and specialized parts is crucial. The firm fixed-price structure is a positive indicator for cost control, assuming the base pricing is competitive. Without specific unit costs for individual parts, a precise value-for-money assessment is challenging, but the overall commitment suggests a recognized need and a potentially fair price for the anticipated goods.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is expected to drive better pricing and innovation. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition, which is generally favorable for the government in terms of price discovery and selection of the best value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that the government receives competitive pricing and access to a wider range of suppliers, potentially leading to cost savings and higher quality goods.

Public Impact

The primary beneficiaries are the U.S. Army units requiring operational readiness through the supply of essential spares and parts. Services delivered include the provision of various spares and parts, crucial for maintaining military equipment. The geographic impact is primarily within the U.S. Army's operational theaters, with parts likely distributed to various bases and deployed units. Workforce implications are indirect, supporting jobs within the defense manufacturing sector, particularly in ordnance production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price creep on specific, high-demand parts if not closely monitored.
Reliance on a single contractor for a broad range of spares could lead to supply chain vulnerabilities.
Ensuring timely delivery of critical parts to maintain operational readiness is paramount.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Firm fixed-price contract type provides cost certainty.
Contract duration of over two years indicates sustained demand and potential for long-term supplier relationships.

Sector Analysis

This contract falls within the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' sector, a critical component of the defense industrial base. This sector is characterized by specialized manufacturing processes, stringent quality control, and often long lead times. The market size for defense-related ordnance and parts is substantial, driven by global military spending and the need for continuous equipment sustainment. This award represents a typical procurement within this category, aimed at ensuring the operational readiness of military forces.

Small Business Impact

The data indicates that small business participation was not a primary set-aside factor ('sb': false). While this contract was not specifically set aside for small businesses, the prime contractor, Kongsberg Defence & Aerospace AS, may engage small businesses as subcontractors. Analysis of subcontracting plans would be necessary to determine the extent of small business involvement and its impact on the broader small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and potentially the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Ammunition Plant Operations
Defense Logistics Agency (DLA) Supply Chain Management
Tactical Vehicle Spares Procurement
Aviation Component Sustainment Contracts

Risk Flags

Supply Chain Vulnerability
Potential for Cost Overruns on Specific Items
Timeliness of Delivery for Critical Parts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.8 million to KONGSBERG DEFENCE & AEROSPACE AS. DELIVERY ORDER FOR VARIOUS SPARES AND PARTS.

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 $29.8 million.

What is the period of performance?

Start: 2025-01-28. End: 2027-05-31.

What is the historical spending pattern for Kongsberg Defence & Aerospace AS with the Department of Defense, particularly for similar spares and ordnance?

Kongsberg Defence & Aerospace AS has a history of receiving contracts from the Department of Defense, often related to defense systems, munitions, and related components. Analyzing their past awards, especially those for spares and ordnance, would provide context for the current $29.8 million award. A review of historical data might reveal trends in contract values, types (e.g., firm fixed-price vs. cost-plus), and the specific types of ordnance or parts procured. This historical perspective is crucial for assessing whether the current award is consistent with past dealings, potentially indicating stable pricing or identifying any significant deviations that warrant further investigation into market conditions or contractor performance.

How does the unit cost of key spares and parts in this contract compare to industry benchmarks or previous government procurements?

A detailed comparison of unit costs for the specific spares and parts included in this $29.8 million award against industry benchmarks and previous government procurements is essential for a thorough value-for-money assessment. Without access to the itemized list and associated pricing, this benchmark is difficult to establish. However, if specific high-volume or critical parts can be identified, their unit costs could be compared to publicly available pricing data or historical contract awards for similar items. Significant deviations from established benchmarks, either higher or lower, could signal potential issues with pricing competitiveness, contractor efficiency, or the accuracy of the initial cost estimates. This analysis is key to determining if the government is obtaining fair and reasonable prices.

What are the primary risks associated with the supply chain for these specific ordnance and parts, and how are they being mitigated?

The supply chain for defense-related ordnance and parts can carry inherent risks, including reliance on specialized raw materials, geopolitical instability affecting sourcing, potential for obsolescence, and single-source dependencies for certain components. For this contract, risks might include the availability of specific alloys or manufacturing capabilities required for the ordnance. Mitigation strategies could involve the contractor maintaining strategic inventories, diversifying suppliers where possible, robust quality assurance processes to prevent defects, and clear communication channels with the government regarding potential disruptions. The contract's duration and firm fixed-price nature suggest a degree of confidence in managing these risks, but ongoing monitoring by the Army would be necessary.

What is the expected impact of this contract on the operational readiness of the U.S. Army, specifically concerning the equipment that utilizes these spares and parts?

This contract is directly tied to maintaining the operational readiness of U.S. Army equipment by ensuring the availability of necessary spares and parts. The $29.8 million award signifies a substantial commitment to sustainment, suggesting that the equipment reliant on these components is critical for current or future operations. The timely delivery of these parts will prevent equipment downtime, reduce maintenance backlogs, and ensure that soldiers have access to fully functional materiel. The specific types of ordnance and parts procured will dictate which weapon systems or platforms benefit most directly, contributing to their overall serviceability and effectiveness in training or combat scenarios.

Are there any performance metrics or key performance indicators (KPIs) associated with this delivery order that are publicly available?

Publicly available information on specific Key Performance Indicators (KPIs) for individual delivery orders like this one is often limited due to the operational nature of defense contracts. While the contract itself specifies the items to be delivered and the delivery schedule, detailed performance metrics such as on-time delivery rates, defect rates, or response times for urgent requests are typically part of the contract's administrative clauses and performance work statement, which are not always fully disclosed. However, the firm fixed-price nature implies that meeting the delivery specifications is paramount. The Department of Defense generally tracks contractor performance through systems like the Contractor Performance Assessment Reporting System (CPARS), but these detailed assessments are usually internal.

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: $29,776,718

Exercised Options: $29,776,718

Current Obligation: $29,776,718

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