DoD awards $18.5M contract for ammunition manufacturing to General Dynamics, with delivery through late 2026

Contract Overview

Contract Amount: $18,558,720 ($18.6M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-29

End Date: 2026-12-31

Contract Duration: 1,007 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PGU-27

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $18.6 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: PGU-27 Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is for ammunition manufacturing, a critical component of defense readiness. 3. Delivery is scheduled to extend over two years, indicating a sustained need. 4. The fixed-price contract type aims to control costs for the government. 5. The awardee, General Dynamics, is a major defense contractor with established capabilities. 6. The contract value is substantial, reflecting the scale of ammunition procurement.

Value Assessment

Rating: good

The contract value of $18.5 million for ammunition manufacturing appears reasonable given the nature of defense procurement and the awardee's specialization. Benchmarking against similar large-scale ammunition contracts would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, though the specific unit costs are not detailed here. Without detailed cost breakdowns or comparisons to other recent awards for similar items, a definitive value assessment is challenging, but the award to a known entity through competition suggests a fair market price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which implies that while the competition was broad, specific sources may have been excluded for defined reasons. The presence of two bids suggests a degree of competition, but the exact number of potential bidders and the reasons for exclusion of others would be needed for a full assessment. A competitive process is generally favorable for price discovery and ensuring the government receives the best value.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely drove down prices and ensured that the contract was awarded to a capable supplier at a reasonable cost. The exclusion of certain sources, if justified, prevents unnecessary costs associated with less qualified or higher-priced bidders.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring ammunition. The contract ensures the supply of essential ammunition (except small arms) for military readiness. The geographic impact is primarily within the United States, where General Dynamics operates its manufacturing facilities. This contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Reliance on a single awardee for a critical defense commodity.
Fluctuations in raw material costs could impact long-term affordability if not managed.

Positive Signals

Award to an established defense contractor with proven manufacturing capabilities.
Firm fixed-price contract helps mitigate cost overruns for the government.
Competition, even with exclusions, generally leads to better pricing.
Sufficient duration allows for planned production and delivery schedules.

Sector Analysis

The defense industry, particularly the segment focused on munitions and ordnance, is characterized by high barriers to entry, significant R&D investment, and long-term government contracts. General Dynamics is a major player in this sector. This contract fits within the broader category of defense procurement for essential materiel, supporting national security objectives. Spending in this area is often driven by operational tempo, modernization efforts, and strategic stockpiling.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). General Dynamics is a large corporation, and it is unlikely that significant subcontracting opportunities for small businesses will be mandated or prioritized under this specific award, unless specified in the contract's terms beyond the provided data. The focus is on large-scale production by an established prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering goods at the agreed-upon price. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics may not be publicly disclosed.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance and Ammunition Manufacturing Contracts
Defense Industrial Base Support
Army Logistics and Readiness Programs

Risk Flags

Potential for supply chain vulnerabilities
Dependence on a single large contractor
Justification for 'exclusion of sources' requires scrutiny

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.6 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. PGU-27

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE & TACTICAL 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 $18.6 million.

What is the period of performance?

Start: 2024-03-29. End: 2026-12-31.

What is the historical spending pattern for ammunition manufacturing by the Department of the Army with General Dynamics?

Analyzing historical spending patterns for ammunition manufacturing by the Department of the Army with General Dynamics requires access to historical contract databases. Typically, such analysis would involve aggregating contract awards over several fiscal years to identify trends in volume, value, and specific types of ammunition procured. For instance, one might look for recurring awards for similar ordnance categories, assess whether contract values have increased or decreased over time, and examine the frequency of sole-source versus competitive awards to this contractor. This historical context helps in evaluating whether the current $18.5 million award is consistent with past procurement strategies or represents a significant shift in spending. Without specific historical data, it's difficult to provide precise figures, but major defense contractors like General Dynamics often have long-standing relationships with agencies like the Army for critical materiel like ammunition.

How does the per-unit cost of ammunition under this contract compare to market rates or similar government contracts?

Determining the per-unit cost comparison for ammunition under this contract is challenging without access to the detailed pricing structure and unit quantities within the $18.5 million award. The provided data indicates a total award value and duration but not the specific items or their quantities. To perform such a comparison, one would need to identify the exact type of ammunition being procured, its specifications, and then benchmark its unit price against recent contracts for identical or comparable items awarded by the Department of Defense or other federal agencies. Market rates from commercial suppliers could also serve as a benchmark, though defense-specific munitions often have different cost structures due to specialized requirements and production scales. The 'N/A' for CPU in the schema suggests this specific data point is not readily available or calculable from the provided summary.

What are the specific risks associated with General Dynamics' track record in fulfilling large defense manufacturing contracts?

General Dynamics is a well-established defense contractor with a generally strong track record in fulfilling large manufacturing contracts. However, like any major defense supplier, potential risks can include past performance issues related to delivery delays, quality control problems, or cost overruns on previous contracts, although specific instances are not detailed here. Analyzing their history would involve reviewing past performance evaluations and any documented disputes or contract terminations. For this specific contract, risks might be mitigated by the firm fixed-price nature, which incentivizes the contractor to manage costs and schedules effectively. The duration of the contract (through late 2026) also provides a substantial window for production, potentially reducing immediate delivery risks but requiring sustained oversight.

What is the assessed program effectiveness or impact of this ammunition procurement on overall military readiness?

The effectiveness and impact of this ammunition procurement on military readiness are directly tied to ensuring that the Department of the Army has an adequate and timely supply of essential munitions. By awarding this $18.5 million contract, the Army is addressing a specific need for ammunition (excluding small arms), which is critical for training, operational deployment, and strategic reserves. The contract's duration, extending to late 2026, suggests a planned replenishment or sustainment effort. The effectiveness is measured by the contractor's ability to meet delivery schedules and quality standards, thereby directly contributing to the force's ability to execute its missions. Without specific details on the type and quantity of ammunition, a precise impact assessment is limited, but the procurement itself signifies a commitment to maintaining operational readiness.

Are there any significant concerns regarding the competition level or potential for price manipulation given the 'exclusion of sources' clause?

The 'full and open competition after exclusion of sources' clause warrants careful consideration. While it indicates an initial intent for broad competition, the subsequent exclusion of specific sources means the final competition pool was smaller. The key concern is whether these exclusions were justified and transparent, and if they unduly limited competition, potentially leading to higher prices or reduced innovation. The fact that two bids were received suggests some level of competition persisted. However, a thorough analysis would require understanding the rationale behind the exclusions and assessing if alternative, qualified sources were unfairly prevented from bidding. If exclusions were arbitrary or poorly justified, it could raise concerns about price discovery and taxpayer value.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 6658 ROUTE 148, MARION, IL, 62959

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

Financial Breakdown

Contract Ceiling: $18,558,720

Exercised Options: $18,558,720

Current Obligation: $18,558,720

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $3,876,004

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W519TC24D0009

IDV Type: IDC

Timeline