Department of the Army awards $22.9M contract for 9mm ammunition to Olin Winchester, LLC

Contract Overview

Contract Amount: $22,944,017 ($22.9M)

Contractor: Olin Winchester, LLC

Awarding Agency: Department of Defense

Start Date: 2025-02-27

End Date: 2026-09-30

Contract Duration: 580 days

Daily Burn Rate: $39.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: AWARD FISCAL YEAR 2025 REQUIREMENTS FOR 9MM M882 AND 9MM MODULAR HANDGUN SYSTEM AMMUNITION.

Place of Performance

Location: OXFORD, LAFAYETTE County, MISSISSIPPI, 38655

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $22.9 million to OLIN WINCHESTER, LLC for work described as: AWARD FISCAL YEAR 2025 REQUIREMENTS FOR 9MM M882 AND 9MM MODULAR HANDGUN SYSTEM AMMUNITION. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for a fixed-price with economic price adjustment, which can protect against inflation. 3. Olin Winchester, LLC, is the sole awardee, indicating a single supplier for this specific requirement. 4. The contract duration is 580 days, covering requirements for FY2025. 5. The award amount of $22.9 million represents a significant investment in small arms ammunition. 6. The contract is for manufacturing small arms ammunition, a critical component for military operations.

Value Assessment

Rating: good

The award amount of $22.9 million for 9mm ammunition appears reasonable given the scope and duration. Benchmarking against historical ammunition contracts for similar quantities and types would provide a more precise value assessment. The fixed-price with economic price adjustment structure aims to manage cost fluctuations, which is a common practice for long-lead time or commodity items subject to market volatility. Without specific unit cost data or comparison to other recent awards for the same caliber, a definitive value-for-money judgment is challenging, but the competitive nature of the award suggests a fair 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, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the designation implies a robust competitive environment. This approach is generally favored as it allows for the widest possible pool of potential suppliers, theoretically leading to better pricing and innovation. The agency's decision to use full and open competition suggests confidence in the market's ability to supply the required ammunition.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that drives down prices and encourages efficiency from contractors, ensuring the government receives the best possible value for its investment in essential supplies like ammunition.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel, who will receive essential 9mm ammunition for training and operational readiness. The contract ensures the supply of 9mm M882 and 9mm Modular Handgun System ammunition, critical for standard-issue sidearms. The geographic impact is primarily related to the manufacturing location of Olin Winchester, LLC, and the subsequent distribution to military installations. Workforce implications include continued employment and potential expansion at Olin Winchester's manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if market conditions fluctuate significantly.
Reliance on a single contractor, Olin Winchester, LLC, for this specific award could pose supply chain risks if unforeseen issues arise.
The contract does not specify small business set-asides, potentially limiting direct opportunities for smaller firms in this specific award.

Positive Signals

Awarded through full and open competition, indicating a competitive market for ammunition supply.
Olin Winchester, LLC, is an established manufacturer with a track record in producing ammunition for the government.
The fixed-price with economic price adjustment contract structure can provide cost stability for the government over the contract period.

Sector Analysis

The defense sector's ammunition market is a critical component of national security, characterized by specialized manufacturing processes and stringent quality control. This contract falls within the Small Arms Ammunition Manufacturing sub-sector. The market is often dominated by a few large, established defense contractors due to high barriers to entry, including capital investment, technical expertise, and security clearances. Spending in this area is driven by military readiness requirements, training needs, and operational deployments. Comparable spending benchmarks would involve analyzing historical awards for similar calibers and quantities of ammunition from various military branches.

Small Business Impact

This contract does not appear to have a small business set-aside (SB: false). While Olin Winchester, LLC is the prime contractor, there is no explicit indication of subcontracting requirements specifically for small businesses within this award notice. The impact on the small business ecosystem is therefore indirect, as opportunities may arise if Olin Winchester chooses to subcontract for raw materials or support services. However, without specific set-aside goals or subcontracting plans detailed in the award, direct benefits to small businesses from this particular contract are not guaranteed.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract execution. The fixed-price with economic price adjustment clause requires careful monitoring of market indices to ensure fair adjustments.

Related Government Programs

Department of Defense Ammunition Procurement
Small Arms Ammunition Manufacturing
Army Combat Ammunition Systems
Modular Handgun System Procurement

Risk Flags

Potential for price escalation due to economic price adjustment clause.
Sole awardee for this specific delivery order could pose supply chain risks.
Lack of explicit small business subcontracting goals may limit direct opportunities for SMBs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.9 million to OLIN WINCHESTER, LLC. AWARD FISCAL YEAR 2025 REQUIREMENTS FOR 9MM M882 AND 9MM MODULAR HANDGUN SYSTEM AMMUNITION.

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 $22.9 million.

What is the period of performance?

Start: 2025-02-27. End: 2026-09-30.

What is Olin Winchester, LLC's track record with the Department of Defense for ammunition contracts?

Olin Winchester, LLC, has a long-standing history of supplying ammunition to the U.S. military, including the Department of Defense. As a major defense contractor, they have secured numerous contracts for various calibers and types of ammunition over many years. Their experience includes fulfilling large-scale requirements for training, combat, and general-issue ammunition. Historical data indicates they are a primary source for many standard military ammunition needs. While specific details of past performance on similar contracts would require deeper analysis of contract databases, their continued success in winning competitive bids suggests a generally positive track record in terms of quality, delivery, and adherence to specifications. The company's established infrastructure and expertise in ammunition manufacturing position them as a reliable, albeit sometimes sole-source or limited-competition, supplier for critical munitions.

How does the awarded price compare to similar ammunition contracts awarded in recent years?

Direct comparison of the $22.9 million award for 9mm ammunition to similar contracts requires access to detailed historical data on unit prices, quantities, and contract types. However, the award amount for a 580-day requirement (approximately 1.6 years) suggests a substantial volume. Ammunition prices can fluctuate significantly based on raw material costs, manufacturing capacity, and the specific type of ammunition (e.g., training vs. combat rounds). Contracts for 9mm ammunition awarded under full and open competition in recent years have generally ranged from several cents to over a dollar per round, depending on these factors. Without the exact quantity of rounds specified in this award, a precise per-unit cost benchmark is not possible. The fixed-price with economic price adjustment (FPEPA) structure also complicates direct comparisons, as the final cost can vary. However, the competitive nature of this award implies that the price achieved is likely within a reasonable market range for the specified period and conditions.

What are the primary risks associated with this contract for the Department of the Army?

The primary risks associated with this contract include potential supply chain disruptions, price volatility, and quality control issues. Although awarded competitively, Olin Winchester, LLC is the sole awardee for this specific delivery order, meaning any interruption in their production or delivery capabilities could impact the Army's ammunition supply. The economic price adjustment (EPA) clause, while intended to manage inflation, introduces a risk of cost increases if market prices for raw materials or labor rise significantly. Furthermore, ensuring consistent quality and reliability of ammunition is paramount; any lapse in quality control could have severe operational consequences. Lastly, reliance on a single manufacturer for a critical item like ammunition can create strategic vulnerabilities if geopolitical events or unforeseen domestic issues affect production capacity or international material sourcing.

How effective is the 'Fixed Price with Economic Price Adjustment' contract type for ammunition procurement?

The 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type is often considered effective for procuring items like ammunition where raw material costs or other economic factors can fluctuate significantly over the contract period. For the government, it provides a degree of cost certainty by establishing a base price, while the EPA clause allows for adjustments based on pre-defined economic indices (e.g., for metals, labor, energy). This can prevent contractors from inflating their base price to hedge against future uncertainty, potentially leading to lower initial bids. It also protects the contractor from substantial losses due to unforeseen economic downturns, ensuring continued supply. However, it requires diligent monitoring by the government to ensure that price adjustments are justified and do not lead to excessive costs. For ammunition, where material costs are a significant component, FPEPA can strike a balance between cost control and risk mitigation for both parties.

What are the historical spending patterns for 9mm ammunition by the Department of the Army?

Historical spending patterns for 9mm ammunition by the Department of the Army show consistent and substantial procurement over the years, driven by the widespread use of 9mm pistols as standard sidearms for various personnel, including officers, MPs, and special forces. Annual spending can fluctuate based on global security postures, training cycles, inventory levels, and the introduction of new weapon systems. In recent fiscal years, the Army has awarded contracts for 9mm ammunition often in the tens to hundreds of millions of dollars annually, sometimes spread across multiple awards to different contractors or through different contract vehicles. Factors influencing these patterns include the modular handgun system program, which standardized 9mm as a primary sidearm caliber, and ongoing operational requirements. The current $22.9 million award for FY2025 fits within this established pattern of significant, recurring investment in this essential ammunition type.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 33 COUNTY ROAD 166, OXFORD, MS, 38655

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

Financial Breakdown

Contract Ceiling: $22,944,017

Exercised Options: $22,944,017

Current Obligation: $22,944,017

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J22D0009

IDV Type: IDC

Timeline