Department of Defense awards $10.6M contract for blasting caps, highlighting explosives manufacturing needs

Contract Overview

Contract Amount: $10,557,994 ($10.6M)

Contractor: R. Stresau Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-26

End Date: 2027-03-30

Contract Duration: 915 days

Daily Burn Rate: $11.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR 60,160 M6 ELECTRIC BLASTING CAP DODIC M130, 204,080 M7 NON-ELECTRIC BLASTING CAP DODIC M131, AND 20,000 M30 INERT NON-ELECTRIC BLASTING CAPS DODIC M097

Place of Performance

Location: SPOONER, WASHBURN County, WISCONSIN, 54801

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $10.6 million to R. STRESAU LABORATORY, INC. for work described as: DELIVERY ORDER FOR 60,160 M6 ELECTRIC BLASTING CAP DODIC M130, 204,080 M7 NON-ELECTRIC BLASTING CAP DODIC M131, AND 20,000 M30 INERT NON-ELECTRIC BLASTING CAPS DODIC M097 Key points: 1. Contract focuses on essential explosive components for military operations. 2. Competition was conducted after exclusion of sources, suggesting specific technical requirements. 3. The contract duration of 915 days indicates a sustained need for these items. 4. Fixed-price contract type aims to control costs for the government. 5. The awardee, R. Streasau Laboratory, Inc., is positioned to fulfill this specialized requirement. 6. Geographic location of performance is Wisconsin.

Value Assessment

Rating: fair

The total award amount is $10,557,994.40 for a period of 915 days. Benchmarking this specific type of explosives manufacturing contract is challenging due to the specialized nature of the components. However, the fixed-price contract type suggests an effort to manage costs. Without detailed cost breakdowns or comparisons to similar recent awards for these specific DODIC items, a precise value-for-money assessment is difficult. The quantity of items ordered (over 200,000 caps) suggests a significant operational requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded using 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be broad, certain sources were excluded, likely due to specific technical capabilities, security clearances, or proprietary knowledge required for manufacturing these particular blasting caps. The number of bidders is not specified, but the exclusion of sources suggests a limited pool of qualified offerors.

Taxpayer Impact: This competition method may limit price discovery compared to unrestricted full and open competition, potentially leading to higher costs for taxpayers if the qualified bidder pool is small.

Public Impact

Military personnel requiring reliable explosive initiation systems for training and operations will benefit. The contract ensures the supply of critical components for ordnance and demolition. The geographic impact is primarily in Wisconsin, where the contractor is located. This contract supports specialized manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition after exclusion of sources could impact price competitiveness.
Reliance on a single or limited number of suppliers for critical explosive components poses a supply chain risk.
The specific nature of the components may require specialized handling and disposal, adding complexity.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Award to a known entity (R. Streasau Laboratory, Inc.) suggests a degree of confidence in their capability.
The contract duration indicates a stable, long-term requirement, allowing for production planning.

Sector Analysis

This contract falls within the Explosives Manufacturing sector, a niche but critical part of the broader defense industrial base. The market for specialized blasting caps is likely concentrated among a few manufacturers with the necessary expertise, certifications, and security clearances. Comparable spending benchmarks are difficult to establish without more granular data on specific explosive components, but the overall defense spending on ordnance and related materials is substantial.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside. The primary contractor, R. Streasau Laboratory, Inc., is likely a specialized firm, and its size status is not provided. The impact on the broader small business ecosystem is minimal unless the prime contractor engages in significant subcontracting with small businesses, which is not indicated.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, a component of the Department of Defense. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is facilitated by the public nature of contract awards, though specific performance details and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ordnance Procurement
Explosives and Ammunition Manufacturing
Military Logistics and Supply Chain Management
Army Combat Support Systems

Risk Flags

Limited competition after exclusion of sources
Potential supply chain concentration risk
Specialized and hazardous material manufacturing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.6 million to R. STRESAU LABORATORY, INC.. DELIVERY ORDER FOR 60,160 M6 ELECTRIC BLASTING CAP DODIC M130, 204,080 M7 NON-ELECTRIC BLASTING CAP DODIC M131, AND 20,000 M30 INERT NON-ELECTRIC BLASTING CAPS DODIC M097

Who is the contractor on this award?

The obligated recipient is R. STRESAU LABORATORY, 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 $10.6 million.

What is the period of performance?

Start: 2024-09-26. End: 2027-03-30.

What is the track record of R. Streasau Laboratory, Inc. in fulfilling defense contracts for explosive components?

Information regarding R. Streasau Laboratory, Inc.'s specific track record for fulfilling defense contracts, particularly for explosive components like blasting caps, is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on similar awards. Without this historical data, it's difficult to definitively assess their reliability and past performance in this specialized area. Further research into federal procurement databases and contractor performance systems would be necessary to build a complete picture of their capabilities and history with the Department of Defense or other government agencies.

How does the pricing of these blasting caps compare to similar contracts or market rates?

The provided data does not include specific per-unit costs or detailed pricing breakdowns, making a direct comparison to similar contracts or market rates challenging. The total award of $10,557,994.40 covers a significant quantity of M6, M7, and M30 blasting caps. To assess value for money, one would need to calculate the average cost per cap and compare it against historical data for similar items, benchmark pricing from other defense contracts, or industry price lists if available. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type suggests that the pricing reflects a negotiated outcome within a limited supplier pool, which may differ from prices achieved in broader competitive solicitations.

What are the primary risks associated with this contract and the supply of these explosive components?

The primary risks associated with this contract revolve around supply chain reliability and the specialized nature of the products. Given that the competition was conducted 'after exclusion of sources,' there may be a limited number of qualified manufacturers, increasing vulnerability if the primary supplier faces production issues, quality control problems, or geopolitical disruptions. The inherent hazards of manufacturing, storing, and transporting explosive materials also present safety and security risks. Furthermore, changes in military requirements or budget constraints could impact future demand. Ensuring consistent quality and timely delivery of these critical components is paramount to mitigating operational risks for the Department of Defense.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method in ensuring both quality and cost-effectiveness for specialized defense items?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method aims to balance the need for specialized capabilities with competitive pricing. By defining specific criteria that exclude certain sources, the government ensures that only technically qualified and capable vendors participate. This can lead to higher quality products and services tailored to unique requirements. However, if the exclusion criteria significantly limit the number of potential bidders, the competition may be less robust, potentially leading to higher prices than might be achieved in a truly unrestricted competition. The effectiveness hinges on the justification for excluding sources and the diligence in seeking out all viable, qualified bidders within the defined parameters to foster meaningful price discovery.

What is the historical spending pattern for these specific types of blasting caps (M6, M7, M30) by the Department of Defense?

The provided data snippet focuses on a single delivery order and does not offer historical spending patterns for these specific blasting cap types (M6, M7, M30). To understand historical spending, one would need to analyze procurement data over several fiscal years, identifying all contracts awarded for these DODICs (M130, M131, M097) or functionally equivalent items. This analysis would reveal trends in contract values, quantities purchased, awardees, and competition levels. Such a review could indicate whether this $10.6 million award represents a typical expenditure, an increase, or a decrease in demand for these components, and whether spending has been concentrated with specific suppliers or spread across multiple sources over time.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

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

Address: N8265 MEDLEY RD, SPOONER, WI, 54801

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

Financial Breakdown

Contract Ceiling: $10,557,994

Exercised Options: $10,557,994

Current Obligation: $10,557,994

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W519TC24D0019

IDV Type: IDC

Timeline