DoD awards $19.2M for mortar propelling charges, with $60M-$120M in potential future orders

Contract Overview

Contract Amount: $19,190,781 ($19.2M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-04-30

End Date: 2026-03-31

Contract Duration: 700 days

Daily Burn Rate: $27.4K/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: 60MM, 81MM, 120MM MORTAR PROPELLING CHARGES

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $19.2 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 60MM, 81MM, 120MM MORTAR PROPELLING CHARGES Key points: 1. Contract value represents a portion of anticipated needs for essential ammunition components. 2. Competition was conducted after excluding specific sources, suggesting a targeted procurement approach. 3. The contract duration of 700 days indicates a medium-term supply requirement. 4. Fixed-price contract type aims to provide cost certainty for the government. 5. The awardee is a known entity in the defense ordnance sector. 6. This procurement supports the Army's readiness and operational capabilities.

Value Assessment

Rating: good

The awarded value of $19.2 million for 19190780.76 units of mortar propelling charges appears reasonable given the nature of defense procurement. While specific per-unit cost benchmarks are not readily available without further market analysis, the firm fixed-price structure suggests that the government has negotiated a set price. Comparing this to historical procurements of similar ammunition components would provide a more robust value assessment, but the initial data does not indicate significant overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, certain sources were specifically excluded from consideration. The exact reasons for exclusion are not detailed, but this approach can sometimes limit the number of responsive bidders and potentially impact price discovery compared to a truly unrestricted full and open competition. The presence of two bids suggests some level of competition was achieved.

Taxpayer Impact: The exclusion of sources may have limited the potential for the lowest possible price, but the remaining competition still likely provided a degree of price pressure beneficial to taxpayers.

Public Impact

The U.S. Army benefits directly through the acquisition of critical ammunition components. Services delivered include the manufacturing and supply of mortar propelling charges. The geographic impact is primarily within Illinois, where the contractor is located. Workforce implications are positive for the contractor's employees in Illinois.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources.
Reliance on a single contractor for a critical defense component could pose supply chain risks if not managed carefully.

Positive Signals

Award to an established defense contractor with a track record in ordnance.
Firm fixed-price contract provides cost predictability.
Contract supports ongoing military readiness requirements.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition components. The market for such specialized ordnance is typically characterized by a limited number of highly qualified contractors due to stringent quality, security, and technical requirements. Government spending in this area is driven by national defense needs and strategic stockpiling. Comparable spending benchmarks would involve analyzing other contracts for mortar systems and their associated propellants.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The primary contractor, General Dynamics Ordnance & Tactical Systems, Inc., is a large business, and any subcontracting would be at their discretion, not mandated by a small business set-aside provision in this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures, with potential involvement from the Department of the Army's Inspector General. Transparency is facilitated through contract award databases like FPDS. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver specified goods by a certain date. Further oversight would depend on the specific reporting and inspection clauses within the contract.

Related Government Programs

Mortar Systems Procurement
Ammunition Manufacturing
Defense Ordnance Supply
Tactical Ammunition

Risk Flags

Limited Competition
Potential Supply Chain Risk
Dependence on Specific Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.2 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 60MM, 81MM, 120MM MORTAR PROPELLING CHARGES

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 $19.2 million.

What is the period of performance?

Start: 2024-04-30. End: 2026-03-31.

What is the historical spending pattern for mortar propelling charges by the Department of Defense?

Analyzing historical spending for mortar propelling charges requires access to detailed contract databases over several fiscal years. Generally, spending in this category fluctuates based on operational tempo, modernization efforts, and strategic inventory levels. The Department of Defense (DoD) consistently procures ammunition components to maintain readiness. Factors influencing spending include the type of mortar systems in use, geopolitical events requiring increased supply, and the lifecycle of existing munitions. Without specific historical data for this exact item, it's difficult to provide precise figures, but it's reasonable to assume consistent, albeit variable, annual expenditures to support the Army's mortar capabilities.

How does the awarded price per unit compare to industry benchmarks for similar propelling charges?

Determining an exact price per unit benchmark for these specific mortar propelling charges is challenging without access to proprietary industry data or a broader set of comparable government contracts. The awarded quantity is 19,190,780.76 units for $19,190,780.76, suggesting a price of approximately $1.00 per unit. This price point needs to be contextualized by the specific technical requirements, material costs, manufacturing complexity, and the scale of production. General Dynamics Ordnance & Tactical Systems, Inc. is a major defense contractor, and their pricing often reflects established relationships and production efficiencies. A comprehensive benchmark would require comparing this to other contracts for similar caliber mortar charges from different manufacturers or historical data from the same contractor.

What are the primary risks associated with this contract and its execution?

The primary risks associated with this contract include potential supply chain disruptions, as the contractor might rely on specific raw materials or sub-components that could face availability issues. Performance risk exists if the contractor fails to meet quality standards or delivery schedules, which could impact military readiness. Given the 'after exclusion of sources' competition type, there's a risk that the limited competition may not have yielded the most cost-effective solution for the government. Furthermore, geopolitical events or changes in military strategy could alter demand, potentially leading to contract modifications or future procurement uncertainties.

What is the track record of General Dynamics Ordnance & Tactical Systems, Inc. in fulfilling similar defense contracts?

General Dynamics Ordnance & Tactical Systems, Inc. (GD-OTS) has a well-established and extensive track record in manufacturing and supplying a wide range of ordnance and tactical systems for the U.S. military and allied nations. They are known for producing various types of ammunition, including mortar rounds, artillery shells, and small-caliber ammunition, as well as related components like propelling charges. Their history includes numerous large-scale contracts with the Department of Defense, often involving complex manufacturing processes and stringent quality control requirements. GD-OTS is generally considered a reliable supplier within the defense industrial base, though like any large contractor, they may have experienced occasional performance issues or contract disputes on specific programs over their long history.

How does the potential future order value ($60M-$120M) compare to the initial award value?

The potential future order range of $60 million to $120 million significantly exceeds the initial awarded value of approximately $19.2 million. This indicates that the current award represents an initial buy or a specific tranche of a larger, indefinite-delivery/indefinite-quantity (IDIQ) contract or a basic ordering agreement. The substantial difference suggests that the government anticipates a much larger requirement for these mortar propelling charges over the contract's period of performance or subsequent contract vehicles. This structure allows the government flexibility to order more as needed while potentially securing favorable pricing through the initial competition.

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: $38,798,496

Exercised Options: $19,190,781

Current Obligation: $19,190,781

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $9,152,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J18D0059

IDV Type: IDC

Timeline