Army awards $6.97M for C Yard Rails System Upgrades at Iowa Army Ammunition Plant

Contract Overview

Contract Amount: $6,967,312 ($7.0M)

Contractor: American Ordnance LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-16

End Date: 2027-09-30

Contract Duration: 744 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: C YARD RAILS SYSTEM UPGRADES AT IOWA ARMY AMMUNITION PLANT

Place of Performance

Location: MIDDLETOWN, DES MOINES County, IOWA, 52638

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $7.0 million to AMERICAN ORDNANCE LLC for work described as: C YARD RAILS SYSTEM UPGRADES AT IOWA ARMY AMMUNITION PLANT Key points: 1. Contract awarded to American Ordnance LLC for essential infrastructure upgrades. 2. The contract duration is approximately 744 days, indicating a medium-term project. 3. Facilities Support Services are a critical component of maintaining operational readiness. 4. The contract type is Cost Plus Fixed Fee, which can introduce cost variability. 5. The project is located in Iowa, potentially impacting the local economy and workforce. 6. This award represents a specific investment in the modernization of a key defense facility.

Value Assessment

Rating: fair

The contract value of $6.97 million for C Yard Rails System Upgrades is a specific investment in a critical defense facility. Benchmarking this value requires understanding the scope of rail system upgrades, which can vary significantly based on the complexity of the existing infrastructure and the extent of the required modernization. Without detailed project specifications, a direct comparison to similar contracts is challenging. The Cost Plus Fixed Fee (CPFF) contract type means the government reimburses the contractor for allowable costs plus a fixed fee, which can sometimes lead to higher final costs than fixed-price contracts if not managed closely. However, CPFF is often used when the scope of work is not precisely defined at the outset.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment that can lead to better pricing and value for the government. The process aims to ensure that the most capable and cost-effective solution is selected from a broad range of potential offerors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and encourages a wider pool of contractors to vie for government work, potentially driving down costs through market forces.

Public Impact

The primary beneficiaries are the Department of the Army and the Iowa Army Ammunition Plant, ensuring operational efficiency and safety. The services delivered include upgrades to the C Yard Rails System, crucial for the movement of materials and munitions. The geographic impact is concentrated in Iowa, potentially creating or sustaining local jobs during the contract period. Workforce implications may include the need for specialized labor in construction, rail maintenance, and project management within the Iowa region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type may lead to cost overruns if not meticulously managed.
Lack of specific bidder count for a full and open competition makes it difficult to assess the true level of competition.
The specific nature of 'C Yard Rails System Upgrades' is broad and could encompass significant unforeseen complexities.

Positive Signals

Awarded under full and open competition, indicating a potentially robust bidding process.
The contract addresses critical infrastructure needs for a key defense installation.
The project has a defined end date, providing a clear timeline for completion.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing the maintenance, repair, and operation of physical infrastructure. The defense industry heavily relies on such services to maintain its vast network of installations. Spending in this sector is substantial, driven by the need to preserve aging infrastructure and modernize facilities to meet evolving operational requirements. Comparable spending benchmarks would typically involve analyzing other rail system upgrade projects or general facility maintenance contracts within the Department of Defense or similar large government agencies.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, the primary contractor, American Ordnance LLC, will likely manage the project, and there may be limited direct subcontracting opportunities for small businesses unless they are brought in by the prime contractor for specific tasks. The impact on the small business ecosystem is minimal for this particular award.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, specifically the contracting officer and potentially program managers responsible for the Iowa Army Ammunition Plant. Accountability measures would be embedded within the Cost Plus Fixed Fee contract terms, requiring detailed reporting on costs and progress. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details might be limited due to security considerations. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Army Ammunition Plant Operations
Defense Infrastructure Modernization
Rail System Maintenance and Repair
Facilities Support Services Contracts
Department of Defense Construction and Engineering

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Potential for scope creep in infrastructure upgrade projects.
Dependence on contractor's specialized expertise for rail systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.0 million to AMERICAN ORDNANCE LLC. C YARD RAILS SYSTEM UPGRADES AT IOWA ARMY AMMUNITION PLANT

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 $7.0 million.

What is the period of performance?

Start: 2025-09-16. End: 2027-09-30.

What is the track record of American Ordnance LLC in performing similar rail system upgrade contracts for the Department of Defense?

American Ordnance LLC has a significant history of working with the Department of Defense, particularly in ordnance manufacturing and facility operations. While specific details on their past performance with rail system upgrades are not immediately available in this summary, their role as a major contractor for ammunition plants suggests experience with large-scale industrial infrastructure. To fully assess their track record for this specific type of work, a deeper dive into their contract history, performance reviews (e.g., CPARS), and any past issues related to infrastructure projects would be necessary. Their established relationship with the Army likely stems from a proven ability to manage complex operations within defense facilities.

How does the $6.97 million cost compare to similar rail system upgrade projects at other Army ammunition plants?

Directly comparing the $6.97 million cost to similar rail system upgrade projects at other Army ammunition plants is challenging without detailed project scope and specifications. The complexity of rail systems, the extent of necessary upgrades (e.g., track replacement, signaling, electrification), and the specific site conditions at each plant can lead to vastly different costs. However, this figure represents a significant investment in a critical component of the ammunition plant's logistics. To establish a benchmark, one would need to identify comparable projects, analyze their scope, duration, and final costs, and adjust for inflation and regional economic differences. The Cost Plus Fixed Fee nature of this contract also means the final cost could deviate from the initial estimate.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for infrastructure upgrades like this?

The primary risks associated with a CPFF contract for infrastructure upgrades revolve around cost control and potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. While the fee is fixed, the total allowable costs can fluctuate. This can incentivize contractors to incur higher costs, as their profit margin remains constant regardless of the total project expenditure, potentially leading to less cost-consciousness compared to fixed-price contracts. For the government, the risk lies in managing and scrutinizing the contractor's costs to ensure they are reasonable and allocable. Effective oversight, detailed cost reporting, and robust auditing are crucial to mitigate these risks.

What is the expected impact of these rail system upgrades on the operational efficiency and safety of the Iowa Army Ammunition Plant?

Upgrading the C Yard Rails System is expected to significantly enhance the operational efficiency and safety of the Iowa Army Ammunition Plant. Modernized rail systems typically offer improved reliability, reducing downtime caused by track failures or maintenance issues. This ensures a smoother and more predictable flow of materials, components, and finished munitions within the facility, which is critical for meeting production demands. Enhanced safety features, such as improved track integrity, better signaling, and potentially upgraded rolling stock interfaces, can reduce the risk of accidents, derailments, and associated hazards, protecting personnel and preventing damage to valuable assets. Ultimately, these upgrades contribute to the overall readiness and effectiveness of the plant.

How has federal spending on Facilities Support Services for Army Ammunition Plants trended over the past five years?

Federal spending on Facilities Support Services for Army Ammunition Plants has likely seen a steady demand, driven by the need to maintain aging infrastructure and ensure operational readiness. While specific figures for ammunition plants alone are not readily available without targeted analysis, the broader category of Facilities Support Services within the Department of Defense has generally remained robust. Spending is influenced by factors such as the age of facilities, modernization initiatives, and national security priorities. Periods of increased geopolitical tension or strategic shifts may lead to heightened investment in infrastructure upgrades and maintenance to ensure these critical sites can operate effectively. Analyzing historical spending patterns for the specific plant or similar facilities would provide a more precise trend.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 52638

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

Financial Breakdown

Contract Ceiling: $6,967,312

Exercised Options: $6,967,312

Current Obligation: $6,967,312

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J09G0001

IDV Type: IDC

Timeline