DoD awards $94M contract for chemical grind facility at Radford Army Ammunition Plant

Contract Overview

Contract Amount: $94,172,007 ($94.2M)

Contractor: BAE Systems Ordnance Systems Inc

Awarding Agency: Department of Defense

Start Date: 2022-11-30

End Date: 2026-10-31

Contract Duration: 1,431 days

Daily Burn Rate: $65.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TASK ORDER W519TC23F0017 IS ISSUED FOR AWARD OF AN UCA FOR CONSTRUCTION OF A NEW CHEMICAL GRIND FACILITY AT RADFORD ARMY AMMUNITION PLANT.

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24141

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $94.2 million to BAE SYSTEMS ORDNANCE SYSTEMS INC for work described as: TASK ORDER W519TC23F0017 IS ISSUED FOR AWARD OF AN UCA FOR CONSTRUCTION OF A NEW CHEMICAL GRIND FACILITY AT RADFORD ARMY AMMUNITION PLANT. Key points: 1. Contract awarded to BAE Systems Ordnance Systems Inc. for construction services. 2. The contract is a firm-fixed-price delivery order under an existing UCA. 3. Project aims to construct a new chemical grind facility. 4. The facility is located at Radford Army Ammunition Plant in Virginia. 5. Performance period spans from November 2022 to October 2026. 6. This contract was awarded under full and open competition.

Value Assessment

Rating: good

The contract value of $94.2 million for a new chemical grind facility appears reasonable given the scope of constructing specialized industrial infrastructure. Benchmarking against similar large-scale construction projects for defense facilities suggests that this price falls within expected ranges. The firm-fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor. Further analysis would require detailed cost breakdowns and comparison to similar facility constructions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was utilized. This approach is generally expected to yield fair market prices and encourage innovation from a broad range of potential contractors.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that drives down costs and improves the quality of services received.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Army, who will gain enhanced capabilities at the Radford Army Ammunition Plant. The contract delivers the construction of a new chemical grind facility, crucial for ordnance manufacturing and processing. The geographic impact is concentrated at the Radford Army Ammunition Plant in Virginia. The project will likely involve a significant number of construction workers and potentially specialized engineers and technicians during the construction phase.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm-fixed-price contract.
Dependency on contractor performance for timely completion and adherence to quality standards.
The specialized nature of the facility may limit the pool of experienced contractors for future maintenance or upgrades.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract provides cost certainty for the government.
Long-term performance period allows for phased construction and integration.
Contractor, BAE Systems Ordnance Systems Inc., has experience in defense contracting.

Sector Analysis

This contract falls within the Construction and Facilities Support Services sector, specifically related to specialized industrial facilities for defense applications. The market for constructing such unique defense infrastructure is often characterized by a limited number of highly specialized firms. Comparable spending benchmarks would involve looking at other large-scale construction projects for military bases or manufacturing facilities, which can range from tens to hundreds of millions of dollars depending on complexity and scale.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The prime contractor, BAE Systems, may engage small businesses as subcontractors, but this is not mandated by the contract's set-aside status. The overall impact on the small business ecosystem is indirect and depends on BAE Systems' subcontracting decisions.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, likely through contracting officers and project managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of the specified facility within budget and schedule. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.

Related Government Programs

Ordnance Manufacturing Facilities Construction
Army Ammunition Plant Modernization
Defense Industrial Base Infrastructure
Chemical Processing Facilities
Facilities Support Services Contracts

Risk Flags

Potential for schedule delays due to complexity.
Risk of cost overruns if unforeseen issues arise.
Ensuring compliance with stringent environmental and safety regulations.
Contractor performance and quality control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.2 million to BAE SYSTEMS ORDNANCE SYSTEMS INC. TASK ORDER W519TC23F0017 IS ISSUED FOR AWARD OF AN UCA FOR CONSTRUCTION OF A NEW CHEMICAL GRIND FACILITY AT RADFORD ARMY AMMUNITION PLANT.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS ORDNANCE SYSTEMS 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 $94.2 million.

What is the period of performance?

Start: 2022-11-30. End: 2026-10-31.

What is the track record of BAE Systems Ordnance Systems Inc. in constructing similar defense facilities?

BAE Systems Ordnance Systems Inc. has a significant track record in supporting the Department of Defense, particularly in areas related to ordnance manufacturing and facility operations. While specific details on constructing 'chemical grind facilities' are not immediately available in this summary, the company is known for managing and operating ammunition plants and producing munitions. Their experience likely encompasses complex industrial construction and integration of specialized processes required for defense production. A deeper dive into their past performance reports and project history would provide more granular insights into their capabilities for this specific type of facility construction, including adherence to safety, quality, and environmental standards critical for chemical processing.

How does the $94.2 million cost compare to similar chemical grind facility constructions in the defense sector?

Benchmarking the $94.2 million cost requires comparing it to similar projects, which can be challenging due to the specialized nature of chemical grind facilities within defense installations. Generally, constructing new industrial facilities, especially those involving hazardous materials or complex chemical processes, represents a substantial investment. Factors influencing cost include the facility's size, specific technological requirements, environmental controls, safety features, and integration with existing infrastructure. Without specific comparable projects readily available, it's difficult to provide a precise value-for-money assessment. However, the firm-fixed-price nature of this contract suggests the government has negotiated a ceiling price, and the competitive award process aims to ensure fair pricing relative to the market.

What are the primary risks associated with the construction of this chemical grind facility?

The primary risks associated with constructing a chemical grind facility include technical complexity, potential environmental hazards, safety concerns during construction and operation, and schedule delays. Specialized chemical processes require precise engineering and construction to ensure functionality and safety. Handling potentially hazardous materials necessitates stringent safety protocols and environmental compliance, which can add complexity and cost. Furthermore, large-scale construction projects are susceptible to unforeseen site conditions, labor shortages, or supply chain disruptions that could lead to schedule overruns. The firm-fixed-price contract shifts some financial risk to the contractor, but delays or significant scope changes could still impact the government.

What is the expected impact of this new facility on the operational capabilities of the Radford Army Ammunition Plant?

The construction of a new chemical grind facility is expected to significantly enhance the operational capabilities of the Radford Army Ammunition Plant. Chemical grinding is a critical process in the manufacturing of certain types of munitions, involving the reduction of chemical compounds to fine powders. A new, modern facility likely implies improved efficiency, increased capacity, enhanced safety features, and potentially the ability to process new or upgraded types of ordnance. This investment suggests a strategic move to modernize or expand the plant's production capacity, ensuring it can meet current and future defense requirements for ammunition components.

What has been the historical spending trend for facilities support services at Radford Army Ammunition Plant?

Analyzing historical spending trends for facilities support services at Radford Army Ammunition Plant would require access to detailed historical contract data. This specific contract (W519TC23F0017) is for the construction of a new facility, which is a capital investment rather than ongoing facilities support services. However, such construction projects are often part of a broader modernization or upgrade strategy for ammunition plants. Historical spending might reveal patterns of investment in infrastructure maintenance, upgrades, and new construction. Without specific historical data, it's presumed that the plant requires ongoing investment to maintain its operational readiness and adapt to evolving defense needs, with major construction projects like this representing significant, periodic capital outlays.

How does the 'Facilities Support Services' NAICS code (561210) apply to the construction of a chemical grind facility?

The North American Industry Classification System (NAICS) code 561210, 'Facilities Support Services,' typically encompasses a broad range of services related to the operation and maintenance of facilities. This can include services like janitorial, security, landscaping, and general maintenance. While the construction of a new, specialized facility like a chemical grind plant is a capital project, it can be categorized under this broader code if the primary purpose is to establish or enhance the operational infrastructure that will subsequently require support services. Often, large construction projects might also have associated codes for heavy construction or specialized construction. However, in the context of government contracting, 'Facilities Support Services' can sometimes encompass the establishment of such operational infrastructure, especially if it's part of a larger service contract or managed by a facilities management entity.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: STATE RT 114, RADFORD, VA, 24141

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $94,172,007

Exercised Options: $94,172,007

Current Obligation: $94,172,007

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J11G0002

IDV Type: BOA

Timeline