Department of the Army awards $592M contract for facility construction at LCAAP UCO to Olin Winchester LLC

Contract Overview

Contract Amount: $592,142,062 ($592.1M)

Contractor: Olin Winchester LLC

Awarding Agency: Department of Defense

Start Date: 2024-03-05

End Date: 2027-12-31

Contract Duration: 1,396 days

Daily Burn Rate: $424.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NGSW FACILITY CONSTRUCTION SOW AT LCAAP UCO.

Place of Performance

Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $592.1 million to OLIN WINCHESTER LLC for work described as: NGSW FACILITY CONSTRUCTION SOW AT LCAAP UCO. Key points: 1. Contract value represents a significant investment in facility infrastructure. 2. The contract was awarded under full and open competition after exclusion of sources, suggesting a deliberate procurement strategy. 3. The duration of the contract (over 3 years) indicates a long-term commitment to the project. 4. The firm-fixed-price contract type aims to control costs and transfer risk to the contractor. 5. The North American Industry Classification System (NAICS) code 332992 points to a focus on small arms ammunition manufacturing support facilities. 6. The contract is not set aside for small businesses, implying a focus on large prime contractors.

Value Assessment

Rating: fair

Benchmarking the value of this facility construction contract is challenging without specific details on the scope of work and comparable projects. However, the substantial dollar amount suggests a significant undertaking. The firm-fixed-price structure is a positive indicator for cost control. Further analysis would require understanding the specific facilities being constructed and their criticality to the LCAAP mission.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be broad, specific sources may have been excluded for defined reasons, possibly related to specialized capabilities or prior performance. The number of bidders is not specified, but the 'full and open' nature suggests an effort to solicit a competitive field.

Taxpayer Impact: This procurement approach aims to ensure the government receives the best value by allowing multiple qualified vendors to compete, potentially driving down costs for taxpayers.

Public Impact

The primary beneficiaries are the Department of the Army and its operational readiness at the Lake City Army Ammunition Plant (LCAAP). The contract will facilitate the construction or upgrade of facilities essential for small arms ammunition manufacturing. The geographic impact is concentrated at the LCAAP facility in Missouri. Workforce implications may include construction jobs during the contract period and long-term operational roles once the facilities are complete.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work is not precisely defined or if unforeseen construction challenges arise.
Dependence on Olin Winchester LLC for timely and quality construction, impacting Army readiness.
The exclusion of certain sources, even under full and open competition, warrants scrutiny to ensure fairness and optimal market engagement.

Positive Signals

Firm-fixed-price contract type helps mitigate cost uncertainty for the government.
Long contract duration allows for phased construction and potential learning curve efficiencies.
Award to a known entity (Olin Winchester) may indicate a strategic alignment with existing operations at LCAAP.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically supporting munitions manufacturing infrastructure. The market for large-scale defense facility construction is often dominated by a few specialized contractors. The value of this contract is substantial, reflecting the critical nature of maintaining and upgrading ammunition production capabilities for national security. Comparable spending benchmarks would typically involve other major military construction projects or upgrades to government-owned, contractor-operated facilities.

Small Business Impact

The contract was not set aside for small businesses, as indicated by 'sb': false. This suggests that the primary contractor, Olin Winchester LLC, is likely a large business. There is no explicit information on subcontracting plans for small businesses within this award, which could represent a missed opportunity for small business participation unless mandated through other means.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and project management offices. Accountability measures will be tied to the delivery order terms and conditions, performance metrics, and the firm-fixed-price structure. Transparency is generally maintained through contract award databases, though specific project details might be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Ammunition Plant Modernization Programs
Defense Industrial Base Infrastructure Investments
Military Construction (MILCON) Projects
Small Arms Ammunition Production Contracts

Risk Flags

Potential for scope creep given the nature of construction projects.
Dependency on contractor performance for critical defense infrastructure.
Justification for source exclusion requires further review for fairness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $592.1 million to OLIN WINCHESTER LLC. NGSW FACILITY CONSTRUCTION SOW AT LCAAP UCO.

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 $592.1 million.

What is the period of performance?

Start: 2024-03-05. End: 2027-12-31.

What is the specific scope of the facility construction or upgrade being undertaken by Olin Winchester LLC?

The provided data indicates the contract is for 'NGSW FACILITY CONSTRUCTION SOW AT LCAAP UCO.' While 'NGSW' likely refers to the Next Generation Squad Weapon program, and 'LCAAP' is the Lake City Army Ammunition Plant, the precise nature of the 'facility construction' and its 'Statement of Work (SOW)' is not detailed. This could range from new building construction, renovation of existing structures, or specialized infrastructure development directly supporting ammunition manufacturing processes. Understanding the SOW is crucial for assessing the contract's true value and risks.

How does the awarded amount of $592 million compare to historical spending on similar facility construction projects at LCAAP or other Army ammunition plants?

Without specific historical data on comparable facility construction projects at LCAAP or similar Army ammunition plants, a direct comparison is difficult. However, $592 million is a substantial sum, suggesting a major capital investment. Typically, large-scale military construction projects can range from tens to hundreds of millions of dollars, depending on the scope, complexity, and technological requirements. This award appears to be on the higher end, potentially indicating a significant expansion, modernization, or critical infrastructure replacement effort.

What are the key performance indicators (KPIs) and milestones associated with this delivery order, and how will Olin Winchester LLC's performance be measured?

The provided data does not specify the key performance indicators (KPIs) or milestones for this delivery order. However, for a firm-fixed-price construction contract of this magnitude, performance is typically measured against adherence to the project schedule, quality of construction, compliance with safety regulations, and completion of defined project phases or deliverables as outlined in the SOW. The Department of the Army will likely have project managers and quality assurance representatives on-site to monitor progress and ensure compliance with contract requirements.

What is the rationale behind the 'exclusion of sources' in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type suggests that the initial solicitation was intended for broad competition, but certain potential offerors were excluded based on specific criteria. This exclusion could be due to reasons such as lack of required specialized capabilities, failure to meet pre-qualification standards, past performance issues, or specific national security considerations. The Army would need to justify these exclusions to ensure the competition remained fair and effective, ultimately aiming to secure the best value for the government.

What is the expected impact of this facility construction on the overall production capacity and modernization of small arms ammunition at LCAAP?

The construction of new or upgraded facilities is intrinsically linked to enhancing the production capacity and modernizing operations at the Lake City Army Ammunition Plant (LCAAP). If the facilities are designed to incorporate advanced manufacturing technologies or to streamline existing processes, this contract could significantly boost efficiency, output volume, and the quality of small arms ammunition. The specific impact depends heavily on the technological advancements and capacity increases envisioned within the facility's design and purpose, which are not detailed in the provided data.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

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: $592,142,062

Exercised Options: $592,142,062

Current Obligation: $592,142,062

Actual Outlays: $25,900,000

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