DoD awards $5.7M for inactive facility maintenance and demolition at Iowa Army Ammunition Plant

Contract Overview

Contract Amount: $5,740,119 ($5.7M)

Contractor: American Ordnance LLC

Awarding Agency: Department of Defense

Start Date: 2023-08-28

End Date: 2026-06-30

Contract Duration: 1,037 days

Daily Burn Rate: $5.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: MAINTENANCE OF INACTIVE FACILITIES / LAYAWAY OF INACTIVE FACILITIES PHASE 11 DEMOLITION AT IAAAP.

Place of Performance

Location: MIDDLETOWN, DES MOINES County, IOWA, 52638

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $5.7 million to AMERICAN ORDNANCE LLC for work described as: MAINTENANCE OF INACTIVE FACILITIES / LAYAWAY OF INACTIVE FACILITIES PHASE 11 DEMOLITION AT IAAAP. Key points: 1. Contract focuses on essential maintenance and phased demolition of underutilized facilities. 2. The award was made through full and open competition, suggesting a competitive bidding process. 3. The contractor, American Ordnance LLC, has a track record with the Department of Defense. 4. This contract represents a small portion of the overall spending on facilities management within the DoD. 5. The duration of the contract is over 3 years, indicating a phased approach to the work. 6. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires careful oversight.

Value Assessment

Rating: fair

The contract value of $5.7 million for facility maintenance and demolition appears reasonable for the scope of work, which includes phased demolition. Benchmarking against similar contracts for facility decommissioning and maintenance within the Department of Defense would provide a clearer picture of value for money. The Cost Plus Fixed Fee structure necessitates close monitoring of costs to ensure efficiency and prevent overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. Without specific cost breakdowns or comparisons to industry standards for demolition and maintenance of inactive facilities, 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 bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment. A competitive bidding process is expected to drive down prices and encourage innovative solutions as contractors vie for the award. The level of competition is a positive indicator for price discovery and achieving a fair market price for the services rendered.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for the required facility maintenance and demolition services, reducing the risk of inflated costs.

Public Impact

The Department of the Army benefits from the maintenance and eventual demolition of inactive facilities, reducing long-term liabilities and improving site safety. Services delivered include the upkeep of dormant structures and the phased demolition of buildings at the Iowa Army Ammunition Plant. The geographic impact is localized to the Iowa Army Ammunition Plant. Workforce implications may include employment opportunities for construction and maintenance personnel, potentially through the prime contractor and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to ensure costs remain within reasonable bounds and the fixed fee is justified.
The long duration of the contract (over 3 years) necessitates sustained monitoring to ensure progress and adherence to demolition plans.
The nature of demolition work can present unforeseen environmental or safety risks that require robust management.

Positive Signals

Awarded through full and open competition, suggesting a competitive market for these services.
The contractor, American Ordnance LLC, has existing experience with the Department of Defense, potentially leading to smoother execution.
The contract addresses the necessary maintenance and eventual decommissioning of inactive facilities, which is a responsible approach to asset management.

Sector Analysis

This contract falls within the Facilities Support Services sector, which encompasses a broad range of services related to the operation, maintenance, and management of real property. The market for these services is substantial, driven by government agencies and private sector entities with extensive real estate holdings. The Department of Defense, in particular, manages a vast inventory of facilities, requiring ongoing maintenance and periodic decommissioning. This contract specifically addresses the unique needs of managing and clearing inactive sites within a military installation, a common requirement for large government facilities.

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 or specific benefits for small businesses mandated by this award. The prime contractor, American Ordnance LLC, will likely manage subcontracting opportunities based on its own procurement needs and policies, rather than through a small business set-aside requirement for this specific contract.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will primarily reside with the contracting officer and their representatives within the Department of the Army. The Cost Plus Fixed Fee structure requires rigorous monitoring of allowable costs and the contractor's performance against the fixed fee. Transparency will depend on the reporting requirements stipulated in the contract and the agency's commitment to public disclosure of contract details. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Facilities Maintenance
Army Base Realignment and Closure (BRAC) Activities
Environmental Remediation Services
Demolition and Decommissioning Contracts
Government Property Management

Risk Flags

Potential for cost overruns due to CPFF contract type.
Environmental hazards associated with demolition.
Safety risks during demolition operations.
Unforeseen site conditions impacting schedule and cost.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.7 million to AMERICAN ORDNANCE LLC. MAINTENANCE OF INACTIVE FACILITIES / LAYAWAY OF INACTIVE FACILITIES PHASE 11 DEMOLITION AT IAAAP.

Who is the contractor on this award?

The obligated recipient is AMERICAN ORDNANCE 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 $5.7 million.

What is the period of performance?

Start: 2023-08-28. End: 2026-06-30.

What is the historical spending pattern for facility maintenance and demolition at the Iowa Army Ammunition Plant?

Analyzing historical spending for facility maintenance and demolition at the Iowa Army Ammunition Plant (IAAP) is crucial for understanding the long-term investment in site upkeep and infrastructure management. Without specific historical data for IAAP, we can infer general trends. Military installations often have recurring needs for maintenance of active facilities and periodic requirements for the decommissioning or demolition of outdated or excess structures. Spending can fluctuate significantly based on infrastructure modernization initiatives, environmental regulations, and base realignment decisions. For instance, if IAAP has undergone significant modernization or downsizing in the past, there might have been larger demolition or construction projects. Conversely, periods of stable operation would likely see consistent spending on routine maintenance. The current $5.7 million contract for Phase II demolition and maintenance suggests a planned, multi-phase approach to addressing inactive facilities, implying that previous phases or ongoing maintenance activities have occurred or will occur, contributing to a broader historical spending context for facility management at IAAP.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control for this demolition project?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. For demolition projects like the one at IAAP, CPFF can be advantageous when the scope of work is not precisely defined or is subject to change, such as uncovering unforeseen conditions during demolition. It allows flexibility to adapt to unexpected challenges. However, it places a significant emphasis on robust oversight by the government to scrutinize allowable costs and ensure efficiency. The fixed fee incentivizes the contractor to complete the work within the estimated cost to maximize their profit margin, but it does not directly incentivize cost reduction beyond that. Effective cost control relies heavily on the government's ability to audit costs, define 'allowable' costs clearly in the contract, and manage scope changes judiciously. Without strong government oversight, CPFF contracts can potentially lead to higher costs compared to fixed-price contracts if cost overruns are not managed effectively.

What are the potential risks associated with the demolition of inactive facilities at a military installation?

Demolishing inactive facilities at a military installation like the Iowa Army Ammunition Plant presents several potential risks. Environmental hazards are a primary concern; these facilities may contain asbestos, lead-based paint, residual chemicals, or other hazardous materials that require specialized abatement and disposal procedures, adding complexity and cost. Structural instability of aging buildings poses a safety risk to demolition crews and potentially nearby active areas. Unforeseen subsurface conditions, such as buried utilities or contaminated soil, can disrupt demolition schedules and increase costs. Security concerns are also relevant, as military installations require strict access control and coordination to prevent unauthorized entry or interference with ongoing operations. Furthermore, the presence of unexploded ordnance (UXO) on older military sites, though less likely in structures themselves, necessitates careful site assessment and coordination with ordnance disposal experts. Finally, managing the logistics of demolition waste disposal, including recycling and landfilling, requires adherence to stringent environmental regulations.

What is the track record of American Ordnance LLC with the Department of Defense, particularly in facility maintenance or demolition?

American Ordnance LLC has a significant track record with the Department of Defense, primarily related to the manufacturing and maintenance of munitions. They operate the Iowa Army Ammunition Plant under a long-term contract with the U.S. Army. This existing relationship and operational presence at IAAP suggest a deep understanding of the site's infrastructure, security protocols, and environmental considerations. While their core business is munitions, their long-term stewardship of the IAAP facility likely involves ongoing maintenance of various structures, including inactive ones, and potentially experience with decommissioning or demolition activities as part of their operational responsibilities. Their familiarity with the site and the DoD contracting environment positions them favorably for this specific contract, potentially reducing startup risks and enhancing execution efficiency compared to a contractor with no prior experience at the installation.

How does the 'Facilities Support Services' NAICS code (561210) compare to the specific services being procured?

The North American Industry Classification System (NAICS) code 561210, 'Facilities Support Services,' broadly encompasses establishments primarily engaged in operating and maintaining buildings and other facilities on a contract or fee basis. This includes services like general property management, building operation, maintenance, cleaning, and security. The current contract, involving 'MAINTENANCE OF INACTIVE FACILITIES / LAYAWAY OF INACTIVE FACILITIES PHASE 11 DEMOLITION AT IAAAP,' aligns well with this NAICS code. While demolition is a specific service, it is often integrated into broader facility management and decommissioning efforts undertaken by facilities support service providers, especially when dealing with the lifecycle management of government properties. The 'maintenance of inactive facilities' aspect directly fits the definition, and demolition is a logical extension of managing and clearing out underutilized or obsolete structures within a facility's portfolio.

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 52638

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,740,119

Exercised Options: $5,740,119

Current Obligation: $5,740,119

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J09G0001

IDV Type: IDC

Timeline