DoD awards $15.6M for spares and systems, with a significant portion allocated to ordnance accessories

Contract Overview

Contract Amount: $15,637,433 ($15.6M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2025-07-11

End Date: 2027-04-30

Contract Duration: 658 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR SPARES AND SYSTEMS TO VARIOUS CUSTOMERS.

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $15.6 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: DELIVERY ORDER FOR SPARES AND SYSTEMS TO VARIOUS CUSTOMERS. Key points: 1. Contract focuses on essential spares and systems, indicating a need for ongoing operational support. 2. The award is a delivery order under a larger contract, suggesting a pre-established relationship and procurement vehicle. 3. Fixed-price contract type aims to control costs and provide predictability for the government. 4. The primary customer is the Department of the Army, highlighting a specific branch's requirement. 5. The North American Industry Classification System (NAICS) code 332994 points to a specialized manufacturing sector. 6. The contract duration extends over 2 years, ensuring sustained availability of necessary components.

Value Assessment

Rating: good

The contract value of $15.6 million for spares and systems appears reasonable given the duration and the nature of defense procurement. Without specific details on the exact spares and systems, a direct comparison is challenging. However, the firm fixed-price structure suggests an effort to manage costs effectively. The award to Kongsberg Defence & Aerospace AS, a known entity in the defense sector, implies a level of established value and performance history.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters competitive pricing and allows the government to select the best value offering. The use of full and open competition is a positive sign for price discovery and ensuring a broad base of potential suppliers.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider selection of qualified contractors, maximizing the value of federal dollars spent.

Public Impact

The Department of the Army benefits from the timely delivery of critical spares and systems, ensuring operational readiness. End-users within the Army will receive necessary components for maintaining and operating various defense systems. The contract supports the defense industrial base, particularly in the area of ordnance accessories manufacturing. Workforce implications may include continued employment for skilled manufacturing and logistics personnel at the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long-term reliance on a single supplier for specific critical spares if not managed proactively.
Fluctuations in demand for spares could impact production schedules and lead times if not accurately forecasted.
Geopolitical factors could influence the supply chain for components manufactured internationally.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established defense contractor suggests a track record of reliability.
Full and open competition promotes a healthy market and potential for competitive pricing.
Delivery order structure allows for flexibility in procurement based on actual needs.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ordnance accessories. The defense industry is characterized by complex supply chains, high technological requirements, and significant government oversight. Spending in this area is crucial for maintaining military readiness and supporting national security objectives. Comparable spending benchmarks would typically involve analyzing other contracts for similar spares and systems awarded to various defense primes and their subcontractors.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (sb: false) and the primary contractor, Kongsberg Defence & Aerospace AS, is a large business. There is no explicit information on subcontracting plans for small businesses within this specific delivery order. However, large defense contracts often include subcontracting goals, and it is possible that small businesses could be involved in supplying components or services to the prime contractor.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms, including contract administration and performance monitoring. As a firm fixed-price contract, the primary accountability lies in the delivery of specified goods within the agreed-upon price. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Army Weapon Systems Support
Ordnance and Ammunition Procurement
Defense Logistics Agency (DLA) Contracts
Foreign Military Sales (FMS) related procurements

Risk Flags

Potential for supply chain vulnerabilities
Dependence on specific manufacturing capabilities
Long-term sustainment planning required

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.6 million to KONGSBERG DEFENCE & AEROSPACE AS. DELIVERY ORDER FOR SPARES AND SYSTEMS TO VARIOUS CUSTOMERS.

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 $15.6 million.

What is the period of performance?

Start: 2025-07-11. End: 2027-04-30.

What is the historical spending pattern for Kongsberg Defence & Aerospace AS with the Department of Defense?

Analyzing historical spending with Kongsberg Defence & Aerospace AS reveals a consistent engagement with the Department of Defense, particularly within the defense and aerospace sectors. The company has secured numerous contracts over the years, ranging from specific system components to broader support services. This particular $15.6 million delivery order for spares and systems is one of many, reflecting an ongoing business relationship. Past awards often pertain to areas like naval systems, aerospace components, and defense electronics. The frequency and value of these awards suggest a recognized capability and a trusted supplier status within the DoD ecosystem. Understanding these patterns helps contextualize the current award not as an isolated event, but as part of a sustained procurement strategy for essential defense materiel.

How does the value of this contract compare to similar awards for defense spares and systems?

The $15.6 million value for this delivery order for spares and systems is within a typical range for defense procurement, especially considering it's for a specific set of items rather than a broad system acquisition. Contracts for specialized spares, particularly those involving complex manufacturing or requiring specific certifications, can easily reach these figures. For instance, similar awards for aircraft components, vehicle parts, or electronic system spares often fall within the multi-million dollar range. The firm fixed-price nature of this contract also suggests that the government has a clear understanding of the costs involved, making the $15.6 million a benchmark for the specified items. Without knowing the exact nature of the 'spares and systems,' a precise comparison is difficult, but the amount is not unusually high for the defense sector's needs.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks associated with this contract include potential supply chain disruptions, quality control issues with manufactured spares, and schedule delays. Given that the contract involves 'spares and systems' and is for ordnance accessories, ensuring the integrity and timely delivery of these critical components is paramount. Mitigation strategies likely include the firm fixed-price structure, which incentivizes the contractor to manage costs and timelines efficiently. The Department of the Army, as the customer, would also have oversight mechanisms in place to monitor performance, conduct quality inspections, and enforce contract terms. Furthermore, the award to an established contractor like Kongsberg Defence & Aerospace AS suggests a degree of confidence in their ability to manage these risks, based on past performance. The contract duration of over 1.5 years also allows for phased delivery and potential adjustments.

What is the expected program effectiveness or impact of this contract on Army operations?

The expected program effectiveness of this contract hinges on its ability to ensure the operational readiness and sustainment of various Army systems. By providing necessary spares and systems, particularly those related to ordnance accessories, the contract directly supports the maintenance and functionality of critical equipment. This ensures that Army units have the resources they need to perform their missions without interruption due to equipment failures or lack of essential parts. The timely delivery of these components contributes to reduced downtime for vehicles, weapons, and other platforms, thereby enhancing overall combat effectiveness and operational flexibility. Ultimately, the contract's success will be measured by the seamless integration of these spares into the Army's logistics and maintenance framework, ensuring that equipment remains functional and deployable.

How does the contractor's performance on previous contracts influence the assessment of this award?

The assessment of this award is significantly influenced by Kongsberg Defence & Aerospace AS's historical performance on previous contracts. As a long-standing entity in the defense industry, the company has a track record that the Department of Defense likely reviewed during the procurement process. Positive past performance, characterized by on-time delivery, adherence to quality standards, and effective cost management, would bolster confidence in the successful execution of this new contract. Conversely, any significant past performance issues, such as repeated delays, quality deficiencies, or cost overruns, would raise concerns and potentially lead to stricter oversight. While specific details of past performance are not provided here, the award itself, especially under full and open competition, suggests that the contractor's prior record was deemed satisfactory or favorable by the procuring agency.

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: $15,637,433

Exercised Options: $15,637,433

Current Obligation: $15,637,433

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