DoD awards $2.98M for small arms, ordnance accessories via sole-source contract to Dillon Aero, Inc

Contract Overview

Contract Amount: $2,983,365 ($3.0M)

Contractor: Dillon Aero, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-04-04

End Date: 2027-09-30

Contract Duration: 909 days

Daily Burn Rate: $3.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER IN SUPPORT OF FOREIGN MILITARY SALES (FMS).

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85027

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $3.0 million to DILLON AERO, INC. for work described as: DELIVERY ORDER IN SUPPORT OF FOREIGN MILITARY SALES (FMS). Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Delivery order supports Foreign Military Sales (FMS), indicating international defense cooperation. 3. Contract duration of 909 days suggests a sustained need for these specialized items. 4. The contract falls under the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' NAICS code. 5. Firm Fixed Price contract type provides cost certainty for the government. 6. The awardee, Dillon Aero, Inc., specializes in firearms and related accessories.

Value Assessment

Rating: fair

The contract value of $2.98 million for small arms and ordnance accessories is moderate. Without specific details on the exact items procured or their quantities, a direct comparison to similar contracts is challenging. However, the sole-source nature of the award raises concerns about whether the government achieved the best possible price. Benchmarking against market rates for similar specialized ordnance would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition means there were no multiple bidders to drive down prices through a bidding process, potentially leading to higher costs for the government compared to a competitive procurement.

Taxpayer Impact: Taxpayers may not have received the most cost-effective solution due to the absence of competitive pressure to lower prices.

Public Impact

This contract primarily benefits foreign military partners through Foreign Military Sales (FMS). It ensures the provision of critical small arms and ordnance accessories to allied nations. The contract supports the defense industrial base by providing business to Dillon Aero, Inc. Geographic impact is primarily international, supporting U.S. foreign policy objectives. Workforce implications are likely concentrated at Dillon Aero, Inc. in Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Foreign Military Sales can be complex and may involve additional administrative costs.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Supports U.S. foreign military cooperation and security alliances.
Awardee is a specialized manufacturer, suggesting expertise in the required items.

Sector Analysis

The defense sector for small arms and ordnance manufacturing is a specialized niche within the broader defense industrial base. Companies in this sector often focus on specific types of weaponry and accessories. This contract, valued at approximately $3 million, represents a modest investment within this sector. Comparable spending benchmarks would depend heavily on the specific types and quantities of ordnance procured, but this award appears to be for a focused set of requirements rather than a large-scale acquisition.

Small Business Impact

This contract was awarded directly to Dillon Aero, Inc. and does not appear to include specific small business set-aside provisions. There is no indication of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Dillon Aero, Inc. voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. As a Foreign Military Sales case, there may be additional oversight from relevant international cooperation and security assistance offices. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Foreign Military Sales Program
Ordnance and Ordnance Accessories Manufacturing
Small Arms Manufacturing
Department of Defense Procurement

Risk Flags

Sole-source award
Lack of competitive justification
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.0 million to DILLON AERO, INC.. DELIVERY ORDER IN SUPPORT OF FOREIGN MILITARY SALES (FMS).

Who is the contractor on this award?

The obligated recipient is DILLON AERO, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.0 million.

What is the period of performance?

Start: 2025-04-04. End: 2027-09-30.

What is the specific justification for awarding this contract on a sole-source basis to Dillon Aero, Inc.?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source awards are justified under circumstances such as only one responsible source being available, urgent and compelling needs, or specific statutory authority. Without further documentation, such as a Justification and Approval (J&A) document, the precise reason remains unknown. This lack of transparency can be a concern for ensuring fair and competitive procurement practices.

How does the $2.98 million contract value compare to typical spending on small arms and ordnance accessories by the Department of Defense?

The $2.98 million contract value is relatively modest when compared to the overall defense budget and typical spending on major weapon systems or large-scale ammunition procurements. However, for specialized small arms and ordnance accessories, this value could represent a significant procurement for specific platforms or foreign military sales cases. To provide a more accurate comparison, one would need to benchmark against similar sole-source or competitively awarded contracts for niche ordnance items, considering factors like quantity, specifications, and delivery timelines. The Department of Defense procures billions of dollars worth of ordnance annually, making this a small fraction of the total.

What are the potential risks associated with a sole-source contract for defense articles like small arms and ordnance?

The primary risk associated with a sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may pay more than it would in an open market. Other risks include limited innovation, as the contractor may have less incentive to improve products or processes, and potential dependency on a single supplier, which can create vulnerabilities in the supply chain. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to public scrutiny or challenges.

What is the significance of this contract being part of a Foreign Military Sale (FMS)?

Foreign Military Sales (FMS) are a critical component of U.S. foreign policy and national security strategy, enabling allies and partners to purchase U.S. defense equipment, services, and training. This contract, supporting an FMS case, means the small arms and ordnance accessories are destined for a foreign military, not U.S. forces. This contributes to interoperability between U.S. and allied forces, enhances the security capabilities of partner nations, and supports U.S. geopolitical interests. FMS cases also generate revenue for the U.S. defense industrial base and can help maintain production capacity for critical defense articles.

What is the track record of Dillon Aero, Inc. in supplying defense articles to the U.S. government or foreign militaries?

Dillon Aero, Inc. is known for its specialized products, particularly its rotary machine guns (e.g., the M134 Minigun and its variants). They have a history of supplying these systems and related components to various U.S. military branches and foreign customers through both direct commercial sales and FMS programs. Their niche focus suggests a high level of expertise in their product lines. Information on their specific contract history, including past performance on similar FMS procurements, would typically be available through government contract databases, though not detailed in the provided summary data.

How does the contract duration of 909 days (approximately 2.5 years) impact the assessment of this procurement?

A contract duration of 909 days indicates a sustained need for the specified small arms and ordnance accessories over an extended period. This suggests the items are not for immediate, short-term use but are part of a longer-term requirement, potentially for ongoing operations, training, or equipping foreign military forces. The extended timeline allows for more predictable planning and delivery schedules for both the government and the contractor. It also implies that the procurement is not driven by an urgent, fleeting need, which might otherwise justify a sole-source award under different circumstances.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 21615 N 7TH AVE, PHOENIX, AZ, 85027

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

Financial Breakdown

Contract Ceiling: $2,983,365

Exercised Options: $2,983,365

Current Obligation: $2,983,365

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN23D0001

IDV Type: IDC

Timeline