Department of the Army awards $78.8M for Hydra 70 rockets and motors to General Dynamics-OTS, Inc

Contract Overview

Contract Amount: $78,768,013 ($78.8M)

Contractor: General Dynamics-Ots, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-08-31

End Date: 2026-04-30

Contract Duration: 1,338 days

Daily Burn Rate: $58.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS DELIVERY ORDERED IS ISSUED IN SUPPORT OF HYDRA 70 ROCKETS AND MOTORS.

Place of Performance

Location: WILLISTON, CHITTENDEN County, VERMONT, 05495

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $78.8 million to GENERAL DYNAMICS-OTS, INC. for work described as: THIS DELIVERY ORDERED IS ISSUED IN SUPPORT OF HYDRA 70 ROCKETS AND MOTORS. Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Delivery order issued under a larger contract, suggesting potential for follow-on work. 3. The contract duration of 1338 days spans over three years, indicating a significant, long-term need. 4. The North American Industry Classification System (NAICS) code 332993 points to ammunition manufacturing, a critical defense sector. 5. The contract is not set aside for small businesses, implying larger prime contractors are expected to fulfill the requirement. 6. The award is for rockets and motors, a key component in military operations.

Value Assessment

Rating: good

The total award amount of $78.8 million for Hydra 70 rockets and motors appears reasonable given the duration and nature of the product. Benchmarking against similar ammunition contracts would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs for the government. However, without specific unit cost data or comparisons to historical pricing for this specific munition, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, which can lead to better pricing and innovation. The Department of the Army's approach suggests they sought the best available solution through a broad solicitation process.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for competitive pricing and ensures that the government receives the best value by considering a wide range of qualified contractors.

Public Impact

The primary beneficiaries are the U.S. Army, receiving essential munitions for its operations. The contract delivers Hydra 70 rockets and motors, critical for various combat and training scenarios. The geographic impact is primarily within the United States, where the contractor operates and potentially where the munitions will be deployed. Workforce implications include employment within General Dynamics-OTS, Inc. and its supply chain, likely in manufacturing and logistics roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future delivery orders if market conditions for raw materials or manufacturing change significantly.
Dependence on a single contractor for a critical munition could pose supply chain risks if the contractor faces production issues.
The long contract duration may not fully account for rapid technological advancements in rocket propulsion or guidance systems.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that likely yielded favorable pricing.
Firm-fixed-price contract type provides cost certainty for the government.
General Dynamics-OTS, Inc. is an established defense contractor with experience in munitions manufacturing.
The contract supports a widely used and essential military munition, indicating a consistent and understood requirement.

Sector Analysis

The defense sector, specifically ammunition manufacturing, is characterized by high barriers to entry due to specialized knowledge, stringent quality control, and significant capital investment. General Dynamics-OTS, Inc. operates within this niche, supplying critical components for military readiness. The market for such munitions is largely driven by government demand, with limited commercial applications. Comparable spending benchmarks would involve analyzing other large-scale contracts for similar ordnance, which often run into tens or hundreds of millions of dollars annually.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'sb' field being false. This suggests that the requirement was deemed to be beyond the scope or capability of small business set-asides, or that the prime contractor, General Dynamics-OTS, Inc., is a large business. There is no explicit information on subcontracting plans for small businesses within this specific delivery order, though large defense contracts often include provisions for small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated by public contract databases, though detailed performance metrics are typically not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Aviation Support Programs
Guided Missile and Small Arms Ammunition Manufacturing
Tactical Missile Production
Rocket and Missile Components Manufacturing

Risk Flags

Long-term contract duration may not align with rapid technological evolution.
Dependence on a single supplier for critical munitions.
Potential for supply chain vulnerabilities in raw materials or manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.8 million to GENERAL DYNAMICS-OTS, INC.. THIS DELIVERY ORDERED IS ISSUED IN SUPPORT OF HYDRA 70 ROCKETS AND MOTORS.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS-OTS, 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 $78.8 million.

What is the period of performance?

Start: 2022-08-31. End: 2026-04-30.

What is General Dynamics-OTS, Inc.'s track record with the Department of Defense, particularly in munitions manufacturing?

General Dynamics-OTS, Inc. (GD-OTS) has a significant and established track record with the Department of Defense, including the Army, in manufacturing various munitions. They are a major supplier of ordnance, including artillery shells, mortar rounds, and rocket systems. Their experience spans decades, and they have consistently been awarded large contracts for critical defense supplies. This includes previous awards for the Hydra 70 rocket system and its components. Their history suggests a strong capability to meet the technical specifications and production demands of the U.S. military. However, like any large defense contractor, they may have faced scrutiny or performance reviews on specific contracts over time, details of which are not always publicly available.

How does the $78.8 million award compare to historical spending on Hydra 70 rockets and motors?

The $78.8 million award for Hydra 70 rockets and motors represents a substantial investment in this specific munition. To provide a precise comparison, historical spending data for this exact item over previous years would be needed. However, given the multi-year duration (2022-2026) and the nature of military hardware procurement, awards in this range are not uncommon for critical systems. The Army procures large quantities of munitions annually, and the Hydra 70 is a widely used rocket system. This award likely reflects a significant portion of the Army's requirement for this munition over the contract period, potentially aligning with or slightly exceeding previous annual procurement values depending on inventory needs and operational tempo.

What are the primary risks associated with this contract for the Department of the Army?

The primary risks associated with this contract include potential supply chain disruptions affecting General Dynamics-OTS, Inc.'s ability to meet production schedules, especially given global material sourcing challenges. There's also a risk of cost overruns if the firm-fixed-price contract doesn't adequately account for unforeseen inflation in raw materials or labor, although the FFP structure aims to mitigate this. Technological obsolescence is another risk; while the Hydra 70 is a proven system, future battlefield needs might demand more advanced capabilities, potentially making this munition less effective over its lifecycle. Finally, performance risks related to manufacturing defects or quality control issues, though mitigated by stringent testing, always exist with complex hardware.

How effective is the Hydra 70 rocket system, and what is its role in current military operations?

The Hydra 70 rocket system is a versatile and cost-effective unguided rocket used by various U.S. military branches, primarily launched from helicopters and some fixed-wing aircraft. Its effectiveness lies in its reliability, relatively low cost per round, and adaptability with different warheads (e.g., high explosive, flechette, smoke, illumination). It serves crucial roles in close air support (CAS), anti-armor operations, reconnaissance, and battlefield illumination. While unguided, its effectiveness is enhanced when paired with targeting pods on aircraft that can provide precise aiming solutions. It remains a staple in the U.S. military's arsenal for suppressing enemy fire, engaging targets of opportunity, and providing area denial.

What is the typical competition level for ammunition manufacturing contracts of this scale?

Ammunition manufacturing contracts, especially for widely used systems like the Hydra 70, often see competition among a limited number of specialized defense contractors. While the initial award here was under 'full and open competition,' the pool of companies capable of producing such munitions at scale and meeting stringent military specifications is relatively small. Major players like General Dynamics, Northrop Grumman, and BAE Systems are frequent bidders. Competition can be fierce when requirements are large and long-term, but for highly specialized or mature systems, the number of viable competitors might decrease. The 'full and open' designation ensures the process is accessible, but the practical competition level is influenced by industry structure.

What are the implications of the firm-fixed-price (FFP) contract type for this award?

The firm-fixed-price (FFP) contract type for this $78.8 million award means that the price is set and not subject to adjustment based on the contractor's cost experience. This is highly advantageous for the Department of the Army as it provides maximum cost certainty and shifts the risk of cost overruns entirely to General Dynamics-OTS, Inc. The contractor is incentivized to control costs efficiently to maximize profit. For the government, this structure simplifies financial management and budgeting. The primary implication is that the Army knows exactly what it will pay for the specified quantity and type of Hydra 70 rockets and motors, assuming the contractor meets all delivery and quality requirements.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 326 IBM ROAD BUILDING 862, WILLISTON, VT, 05495

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: $78,768,013

Exercised Options: $78,768,013

Current Obligation: $78,768,013

Subaward Activity

Number of Subawards: 49

Total Subaward Amount: $45,725,435

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q20D0023

IDV Type: IDC

Timeline