DoD awards $56.9M for .50 caliber ammunition, with Olin Winchester LLC securing the contract

Contract Overview

Contract Amount: $56,916,777 ($56.9M)

Contractor: Olin Winchester LLC

Awarding Agency: Department of Defense

Start Date: 2023-04-21

End Date: 2025-07-31

Contract Duration: 832 days

Daily Burn Rate: $68.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: AWARD UNPRICED CHANGE ORDER FOR THE PRODUCTION OF CALIBER .50 SABOTED LIGHT ARMOR PENETRATING AMMUNITION.

Place of Performance

Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $56.9 million to OLIN WINCHESTER LLC for work described as: AWARD UNPRICED CHANGE ORDER FOR THE PRODUCTION OF CALIBER .50 SABOTED LIGHT ARMOR PENETRATING AMMUNITION. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for the production of specialized ammunition, indicating a critical defense need. 3. The duration of the contract extends over two years, implying sustained demand. 4. The fixed-price structure with economic price adjustment aims to mitigate cost fluctuations. 5. The award is a delivery order under a larger contract, suggesting ongoing procurement. 6. The specific nature of the ammunition points to a niche but essential capability.

Value Assessment

Rating: good

The award amount of $56.9 million for specialized ammunition appears reasonable given the nature of the product and the duration of the contract. Benchmarking against similar contracts for large-caliber ammunition is challenging without more specific details on quantity and technical specifications. However, the fixed-price with economic price adjustment (FPEPA) contract type is common for defense procurement to account for material cost volatility, which can help control overall spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources.' While the 'exclusion of sources' phrasing might initially suggest limitations, in this context, it typically means that after an initial broad solicitation, specific sources were identified and competed. The 'full and open' aspect indicates that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but the open competition is a positive sign for price discovery.

Taxpayer Impact: The use of full and open competition generally leads to better pricing for taxpayers by encouraging multiple companies to bid and offer their best prices.

Public Impact

The U.S. Department of the Army benefits by securing a supply of critical .50 caliber ammunition. This contract ensures the production of sabot-light armor-penetrating ammunition, vital for certain military operations. The geographic impact is primarily within the United States, supporting domestic manufacturing. The contract supports jobs within the defense manufacturing sector, specifically in small arms ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to economic price adjustment clause if material costs escalate significantly.
Reliance on a single contractor for a specific type of ammunition could pose supply chain risks if not managed carefully.
The 'exclusion of sources' aspect, while part of a competitive process, warrants understanding the rationale to ensure no viable sources were unduly excluded.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The fixed-price element provides some cost certainty for the government.
The contract duration suggests a stable and predictable supply chain for essential munitions.
The specific nature of the ammunition addresses a defined military requirement.

Sector Analysis

The defense sector, particularly ammunition manufacturing, is a critical component of national security. This contract falls within the Small Arms Ammunition Manufacturing sub-sector. The market for such specialized munitions is typically dominated by a few key defense contractors. Spending in this area is driven by military readiness requirements and operational tempo. Comparable spending benchmarks would depend on the specific quantity and technical specifications of the ammunition, but multi-million dollar awards are common for such specialized defense articles.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor is not a small business (ss: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. However, the prime contractor, Olin Winchester LLC, may engage small businesses as subcontractors for components or services, which would be detailed in their subcontracting plan, if applicable.

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 contract terms, including delivery schedules and quality specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Ammunition Procurement
Small Arms Ammunition Manufacturing
Tactical Ammunition Production
Defense Logistics Agency (DLA) Munitions Support

Risk Flags

Potential supply chain disruption risk
Economic price adjustment volatility
Dependence on specialized manufacturing capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.9 million to OLIN WINCHESTER LLC. AWARD UNPRICED CHANGE ORDER FOR THE PRODUCTION OF CALIBER .50 SABOTED LIGHT ARMOR PENETRATING AMMUNITION.

Who is the contractor on this award?

The obligated recipient is OLIN WINCHESTER 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 $56.9 million.

What is the period of performance?

Start: 2023-04-21. End: 2025-07-31.

What is the historical spending pattern for .50 caliber sabot-light armor-penetrating ammunition by the Department of Defense?

Analyzing historical spending for this specific type of ammunition requires access to detailed procurement data over several fiscal years. Typically, the Department of Defense procures such specialized munitions through a combination of competitive bids and sole-source contracts, depending on market availability and urgency. Spending can fluctuate based on operational tempo, inventory levels, and strategic priorities. For instance, periods of heightened conflict or significant modernization efforts often correlate with increased ammunition procurement. Without specific historical data for this exact caliber and type, it's difficult to provide precise figures, but it's reasonable to assume consistent, albeit variable, spending to maintain readiness.

How does the unit cost of this ammunition compare to similar defense contracts?

Determining the precise unit cost is not possible from the provided data, as the award is a total amount for a delivery order, not a per-unit price. However, the contract type (Fixed Price with Economic Price Adjustment) suggests that the base price is set, with adjustments for material cost fluctuations. Benchmarking against similar .50 caliber ammunition contracts would require comparing quantities, specific technical requirements (e.g., penetration capabilities, tracer elements), and the year of award. Generally, specialized military-grade ammunition is significantly more expensive than commercial equivalents due to stringent quality control, performance specifications, and smaller production runs. The $56.9 million award over an estimated duration suggests a substantial quantity, and the unit cost would likely be in the tens of dollars per round.

What are the key performance indicators (KPIs) for this contract, and how is contractor performance monitored?

Key performance indicators for this contract would likely include on-time delivery of ammunition, adherence to quality specifications (e.g., defect rates, performance testing results), and compliance with contractual terms. Contractor performance is typically monitored by the Contracting Officer's Representative (COR) or the Procuring Contracting Officer (PCO). Monitoring involves regular reviews of production progress, quality assurance checks, and performance assessments documented in Contractor Performance Assessment Reporting System (CPARS). Failure to meet KPIs can result in contract modifications, penalties, or affect future contract awards.

What is the strategic importance of .50 caliber sabot-light armor-penetrating ammunition for the U.S. military?

.50 caliber sabot-light armor-penetrating ammunition is a specialized munition designed to defeat light armored vehicles, fortifications, and personnel at extended ranges. The sabot projectile allows a smaller, denser penetrator to be fired from a larger caliber barrel, increasing velocity and armor-piercing capability. This type of ammunition is crucial for infantry units, vehicle-mounted weapons, and aircraft armament, providing a significant standoff capability against a range of threats. Maintaining a robust supply of such specialized ammunition is vital for force protection and mission effectiveness in various operational environments.

What is Olin Winchester LLC's track record with the Department of Defense for similar ammunition contracts?

Olin Winchester LLC has a long-standing and significant track record as a major supplier of ammunition to the U.S. military, including the Department of Defense. They are a primary producer of various calibers, including small arms and medium caliber ammunition. Their history includes numerous contracts for large quantities of ammunition, often awarded through competitive processes. While specific performance details for every contract are not publicly detailed, their continued success in securing large DoD contracts suggests a generally positive performance history and capability to meet military requirements. They are recognized as a key industrial base supplier for munitions.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Olin Corporation

Address: 25201 E 78 HWY, INDEPENDENCE, MO, 64056

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

Financial Breakdown

Contract Ceiling: $56,916,777

Exercised Options: $56,916,777

Current Obligation: $56,916,777

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J19D0085

IDV Type: IDC

Timeline