DoD awards $35.9M for Radford Army Ammunition Plant facility replacement, aiming for 15% design completion

Contract Overview

Contract Amount: $35,878,652 ($35.9M)

Contractor: BAE Systems Ordnance Systems Inc

Awarding Agency: Department of Defense

Start Date: 2023-10-25

End Date: 2026-04-25

Contract Duration: 913 days

Daily Burn Rate: $39.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMPLETION OF PHASE I TO THE OVERALL LEGACY NITROGLYCERIN FACILITY REPLACEMENT EFFORT TO PRODUCE A 15% DESIGN, INCLUDING AN OPTION FOR COMPLETION TO 30% DESIGN FOR A NEW MULTI-NITRATE ESTER MANUFACTURING 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 $35.9 million to BAE SYSTEMS ORDNANCE SYSTEMS INC for work described as: COMPLETION OF PHASE I TO THE OVERALL LEGACY NITROGLYCERIN FACILITY REPLACEMENT EFFORT TO PRODUCE A 15% DESIGN, INCLUDING AN OPTION FOR COMPLETION TO 30% DESIGN FOR A NEW MULTI-NITRATE ESTER MANUFACTURING FACILITY AT RADFORD ARMY AMMUNITION PLANT. Key points: 1. Contract focuses on early-stage design for a new multi-nitrate ester manufacturing facility. 2. The award represents a significant investment in modernizing critical defense manufacturing infrastructure. 3. Competition was full and open, suggesting a potentially competitive bidding process. 4. The contract duration of 913 days indicates a substantial, multi-year effort. 5. Fixed-price contract type helps mitigate cost overrun risks for the government. 6. The project is situated in Virginia, a state with a notable defense industrial base.

Value Assessment

Rating: good

The contract value of $35.9 million for a 15% design phase appears reasonable for a complex industrial facility replacement. Benchmarking against similar large-scale defense infrastructure projects would provide further context, but the scope of design work suggests a significant undertaking. The firm-fixed-price structure is a positive indicator for cost control, assuming the initial scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the method of competition suggests a robust process.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down costs through market forces, ensuring the government receives the best value for its investment in critical infrastructure.

Public Impact

The primary beneficiaries are the Department of Defense and its ordnance manufacturing capabilities. The contract will deliver a 15% design for a new multi-nitrate ester manufacturing facility. The geographic impact is localized to the Radford Army Ammunition Plant in Virginia. Workforce implications may include specialized engineering, architectural, and project management roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if design requirements evolve significantly during Phase I.
Reliance on a single contractor for the initial design phase could limit future design flexibility.
The complexity of nitroglycerin and multi-nitrate ester manufacturing presents inherent safety and technical risks.

Positive Signals

Awarding to BAE Systems Ordnance Systems Inc. leverages existing expertise in ordnance manufacturing.
The firm-fixed-price contract provides cost certainty for this design phase.
The project addresses a critical need for modernization of defense production facilities.
Full and open competition suggests a well-structured procurement process.

Sector Analysis

This contract falls within the Facilities Support Services sector, specifically related to defense industrial base modernization. The market for specialized ordnance facility design and construction is niche, often dominated by a few large defense contractors with relevant expertise. Spending benchmarks for similar large-scale industrial facility replacements within the DoD can vary widely based on complexity and scale, but this award represents a significant investment in maintaining and upgrading critical manufacturing capabilities.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false) and does not appear to have specific small business subcontracting requirements explicitly stated in this award notice (ss: false). Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses as subcontractors for specialized services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which incentivizes the contractor to meet defined milestones within budget. Transparency is facilitated through contract award databases, though detailed project oversight documentation may not be publicly available.

Related Government Programs

Army Ammunition Plant Modernization Programs
Defense Industrial Base Infrastructure Investments
Ordnance Manufacturing Facility Upgrades
Chemical Manufacturing Plant Design Services

Risk Flags

Potential for cost overruns due to complexity of hazardous material manufacturing.
Schedule delays possible given the multi-year duration and intricate design requirements.
Ensuring adequate safety and environmental compliance throughout the design and construction lifecycle.
Reliance on specialized expertise for both design and future construction phases.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.9 million to BAE SYSTEMS ORDNANCE SYSTEMS INC. COMPLETION OF PHASE I TO THE OVERALL LEGACY NITROGLYCERIN FACILITY REPLACEMENT EFFORT TO PRODUCE A 15% DESIGN, INCLUDING AN OPTION FOR COMPLETION TO 30% DESIGN FOR A NEW MULTI-NITRATE ESTER MANUFACTURING 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 $35.9 million.

What is the period of performance?

Start: 2023-10-25. End: 2026-04-25.

What is the track record of BAE Systems Ordnance Systems Inc. in managing large-scale defense facility design and construction projects?

BAE Systems Ordnance Systems Inc. has a significant history of involvement in defense manufacturing and ordnance production. As a subsidiary of BAE Systems, it benefits from the parent company's extensive experience in complex defense programs. While specific details on their track record for managing similar *design* phases of large-scale *ammunition facility replacements* are not detailed in this award notice, the company is known for its capabilities in producing munitions and managing related industrial operations. A deeper dive into their past performance on government contracts, particularly those involving hazardous material facilities and large capital investments, would be necessary for a comprehensive assessment of their suitability for this specific design effort.

How does the $35.9 million cost for a 15% design compare to industry benchmarks for similar facilities?

Benchmarking the $35.9 million cost for a 15% design phase is challenging without more specific details on the facility's complexity, size, and the exact scope of work included in the design package. However, for large-scale industrial or defense manufacturing facilities, design costs can represent a substantial portion of the overall project budget. A 15% design (often referred to as preliminary or schematic design) typically involves defining the basic requirements, conceptual layout, and major systems. Given the specialized nature of a multi-nitrate ester manufacturing facility at an Army Ammunition Plant, which involves significant safety, environmental, and security considerations, this figure may be within a reasonable range. Further analysis would require comparing it to similar DoD or chemical industry projects of comparable scale and technical requirements.

What are the primary risks associated with the design and eventual construction of a new multi-nitrate ester manufacturing facility?

The primary risks associated with designing and constructing a new multi-nitrate ester manufacturing facility are multifaceted. Technically, handling and manufacturing nitroglycerin and other nitrates involves inherent explosive hazards, requiring extremely stringent safety protocols, specialized materials, and robust containment systems. Environmentally, managing waste streams and potential emissions from such a facility is critical. Financially, the complexity and specialized nature of the project can lead to cost overruns if initial designs are not thorough or if unforeseen technical challenges arise during construction. Schedule risks are also present due to the intricate engineering, regulatory approvals, and potential supply chain issues for specialized equipment. Furthermore, ensuring the facility meets evolving operational and security requirements for the Department of Defense adds another layer of complexity.

What is the historical spending pattern for facility upgrades or replacements at the Radford Army Ammunition Plant?

Historical spending patterns for facility upgrades or replacements at the Radford Army Ammunition Plant (RAAP) are not directly available from the provided data. However, RAAP has a long history of supporting the Department of Defense's ordnance needs. Major facility replacements or significant upgrades at such installations typically occur over long periods, driven by aging infrastructure, technological advancements, or changes in production requirements. Large capital investments are common for defense manufacturing sites to ensure operational readiness, safety, and efficiency. Analyzing past contract awards for RAAP, particularly those related to infrastructure, construction, and manufacturing equipment, would provide insight into the scale and frequency of such investments over time.

How will the completion of this design phase impact the overall Legacy Nitroglycerin Facility Replacement Effort?

The completion of Phase I, which focuses on the 15% design, is a foundational step for the overall Legacy Nitroglycerin Facility Replacement Effort. This phase will establish the conceptual framework, basic requirements, and initial technical approach for the new facility. Successfully completing this stage provides the necessary documentation and approvals to proceed to subsequent design phases (e.g., 30%, 60%, 90% design) and eventually to the construction phase. The quality and thoroughness of the 15% design directly influence the accuracy of cost estimates, schedules, and the overall feasibility of the project. It sets the stage for detailed engineering and procurement, and any issues identified or decisions made during this phase will have a cascading effect on the entire replacement effort.

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: Compagnie DE Developpement DE L'eau S.A.

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: $35,878,652

Exercised Options: $35,878,652

Current Obligation: $35,878,652

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: W52P1J11G0002

IDV Type: BOA

Timeline