Army Awards $350M for M62A1 Tracer Ammunition Production to Olin Winchester LLC
Contract Overview
Contract Amount: $349,630,215 ($349.6M)
Contractor: Olin Winchester LLC
Awarding Agency: Department of Defense
Start Date: 2023-04-13
End Date: 2026-09-30
Contract Duration: 1,266 days
Daily Burn Rate: $276.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: THE PURPOSE OF THIS DELIVERY ORDER IS TO AWARD THE M62A1 TRACERS FY23 PRODUCTION ORDER.
Place of Performance
Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $349.6 million to OLIN WINCHESTER LLC for work described as: THE PURPOSE OF THIS DELIVERY ORDER IS TO AWARD THE M62A1 TRACERS FY23 PRODUCTION ORDER. Key points: 1. Significant award for essential military supplies, indicating sustained demand. 2. Olin Winchester LLC is a key player in small arms ammunition. 3. Potential for price fluctuations due to economic price adjustment clause. 4. Spending aligns with defense sector priorities for munitions.
Value Assessment
Rating: good
The contract value of $350M for M62A1 tracer ammunition appears substantial. Benchmarking against similar large-scale ammunition production contracts would be necessary for a precise assessment, but the scale suggests a competitive bid process was likely employed.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a specific justification for limiting the pool of bidders. This method may impact price discovery compared to unrestricted full and open competition.
Taxpayer Impact: Taxpayer funds are allocated for critical defense materiel. The specific competition method warrants scrutiny to ensure optimal value for money.
Public Impact
Ensures continued supply of essential ammunition for military operations. Supports a major defense contractor and its manufacturing capabilities. Impacts readiness and operational effectiveness of armed forces. Economic price adjustment clause may lead to cost overruns if inflation is high.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition method requires justification.
- Economic price adjustment introduces cost uncertainty.
- Long-term delivery order duration.
Positive Signals
- Addresses critical defense need for ammunition.
- Award to established, experienced manufacturer.
- Significant investment in defense industrial base.
Sector Analysis
This award falls within the Defense sector, specifically focusing on small arms ammunition manufacturing. Spending benchmarks for similar munitions contracts are typically in the hundreds of millions, aligning with this award's scale.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as Olin Winchester LLC is a large corporation. There is no indication of subcontracting opportunities for small businesses within this specific award notice.
Oversight & Accountability
The award is a Delivery Order under a larger contract, implying prior oversight. Further oversight would focus on performance, adherence to delivery schedules, and management of the economic price adjustment clause.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to EPA.
- Limited competition may not yield best price.
- Long contract duration increases exposure to market volatility.
- Dependence on a single supplier for critical munitions.
Tags
small-arms-ammunition-manufacturing, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $349.6 million to OLIN WINCHESTER LLC. THE PURPOSE OF THIS DELIVERY ORDER IS TO AWARD THE M62A1 TRACERS FY23 PRODUCTION ORDER.
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 $349.6 million.
What is the period of performance?
Start: 2023-04-13. End: 2026-09-30.
What is the specific justification for excluding other sources in the competition?
The justification for excluding other sources needs to be thoroughly reviewed. Typically, such exclusions are based on factors like unique capabilities, existing infrastructure, or national security requirements. Understanding this rationale is crucial for assessing whether the limited competition truly served the government's best interest and secured the most advantageous pricing.
How will the economic price adjustment clause be managed to mitigate taxpayer risk?
The management of the economic price adjustment (EPA) clause is critical. The government should have clear mechanisms in place to monitor relevant economic indicators (e.g., raw material costs, labor indices) and to negotiate adjustments transparently. Regular reviews and audits of the EPA calculations will be essential to prevent excessive cost increases and ensure fair pricing.
What are the performance metrics and quality assurance measures for this ammunition production?
Robust performance metrics and quality assurance (QA) measures are vital for defense contracts, especially for munitions. This includes adherence to strict production schedules, meeting stringent quality specifications for reliability and effectiveness, and comprehensive testing protocols. The government's QA team must actively monitor production and conduct thorough inspections to ensure the delivered ammunition meets all operational requirements.
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: $349,630,215
Exercised Options: $349,630,215
Current Obligation: $349,630,215
Actual Outlays: $50,779,923
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
Start Date: 2023-04-13
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 12:09:00
Last Modified: 2025-04-03
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