DoD Awards $14.3M for M112 Ammunition, C4 Requirements Contract Extended to 2028

Contract Overview

Contract Amount: $14,324,545 ($14.3M)

Contractor: American Ordnance LLC

Awarding Agency: Department of Defense

Start Date: 2024-08-23

End Date: 2028-04-30

Contract Duration: 1,346 days

Daily Burn Rate: $10.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C4 REQUIREMENTS CONTRACT W52P1J-21-D-0035 AT IAAAP - DO W519TC24F0405 IS FOR M112 ORDERING PERIOD 4. TOTAL QTY 1,558,710.

Place of Performance

Location: MIDDLETOWN, DES MOINES County, IOWA, 52638

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to AMERICAN ORDNANCE LLC for work described as: C4 REQUIREMENTS CONTRACT W52P1J-21-D-0035 AT IAAAP - DO W519TC24F0405 IS FOR M112 ORDERING PERIOD 4. TOTAL QTY 1,558,710. Key points: 1. Significant contract for M112 ammunition, indicating ongoing defense needs. 2. Competition method is 'Full and Open', suggesting a competitive bidding process. 3. Risk is moderate due to contract duration and potential for price fluctuations. 4. Sector is Defense, specifically ammunition manufacturing.

Value Assessment

Rating: good

The total award amount is $14.3 million. Without specific unit pricing or historical data for this exact contract, a direct per-unit cost comparison is difficult. However, the firm fixed price structure suggests an attempt to control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically leads to better price discovery and potentially lower costs for the government. The use of a delivery order against a requirements contract allows for flexibility while maintaining a competitive framework.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential defense materiel.

Public Impact

Ensures continued supply of critical M112 ammunition for military operations. Supports the defense industrial base through a significant contract award. The long-term nature of the contract provides stability for both the government and the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2028) could lead to price escalation risks.
Reliance on a single contractor for a specific ammunition type.
Potential for scope creep or changes in requirements over the contract period.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract type helps control costs.
Clear identification of the product (M112 Ammunition).

Sector Analysis

This contract falls within the defense sector, specifically focusing on ammunition manufacturing. Spending in this area is driven by military readiness requirements and geopolitical factors. Benchmarks for ammunition contracts vary widely based on type, quantity, and specific technical requirements.

Small Business Impact

The data indicates this contract was not awarded to a small business (ss: false, sb: false). Therefore, there is no direct benefit to small businesses from this specific award, though the prime contractor may utilize small business subcontractors.

Oversight & Accountability

The Department of the Army, under the Department of Defense, is the awarding agency. Oversight would involve contract management, performance monitoring, and ensuring compliance with terms and conditions throughout the contract's lifecycle.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Contract duration extends to April 2028.
Firm Fixed Price contract.
Awarded under Full and Open Competition.
Significant quantity of ammunition ordered.
Not a small business award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to AMERICAN ORDNANCE LLC. C4 REQUIREMENTS CONTRACT W52P1J-21-D-0035 AT IAAAP - DO W519TC24F0405 IS FOR M112 ORDERING PERIOD 4. TOTAL QTY 1,558,710.

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 $14.3 million.

What is the period of performance?

Start: 2024-08-23. End: 2028-04-30.

What is the average cost per round for the M112 ammunition under this contract, and how does it compare to industry benchmarks?

The provided data does not include the per-unit cost. To determine this, one would need to divide the total award amount ($14,324,544.90) by the total quantity (1,558,710 rounds). This calculated unit cost should then be compared against historical government procurement data and commercial pricing for similar ammunition types to assess value.

What are the primary risks associated with extending this ammunition supply contract until 2028?

Key risks include potential price escalation over the contract's duration, especially if raw material costs increase significantly. There's also the risk of technological obsolescence or changes in military requirements that could make the M112 less relevant. Furthermore, over-reliance on a single supplier for an extended period can reduce negotiating leverage for future contracts.

How effectively does the 'Full and Open Competition' method ensure optimal value for taxpayer money in this ammunition procurement?

Full and open competition is generally effective in driving value by encouraging multiple bidders to offer competitive pricing. This process allows the government to select the offer that best balances cost, technical capability, and delivery timelines. For ammunition, this method helps ensure the DoD receives a reliable supply at a reasonable cost, maximizing the utility of taxpayer funds.

Industry Classification

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

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 52638

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

Financial Breakdown

Contract Ceiling: $14,324,545

Exercised Options: $14,324,545

Current Obligation: $14,324,545

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J21D0035

IDV Type: IDC

Timeline