Army awards $103.6M contract for small arms, ordnance, and accessories to FN America LLC

Contract Overview

Contract Amount: $88,049,246 ($88.0M)

Contractor: FN America LLC

Awarding Agency: Department of Defense

Start Date: 2005-09-02

End Date: 2007-12-31

Contract Duration: 850 days

Daily Burn Rate: $103.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200512!004181!2100!W52H09!TACOM ROCK ISLAND !W52H0905C0283 !A!N! !N! ! !20050902!20070730!098401086!098401086!370005936!N!F N MANUFACTURING LLC !797 OLD CLEMSON RD !COLUMBIA !SC!29229!16000!079!45!COLUMBIA !RICHLAND !S CAROLINA!+000052065090!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A5 !WEAPONS !000 !* !332994!E! !3! ! ! ! ! !20200930!B! ! !A! !D!U!J!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!B!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29229

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $88.0 million to FN AMERICA LLC for work described as: 200512!004181!2100!W52H09!TACOM ROCK ISLAND !W52H0905C0283 !A!N! !N! ! !20050902!20070730!098401086!098401086!370005936!N!F N MANUFACTURING LLC !797 OLD CLEMSON RD !COLUMBIA !SC!29229!16000!079!45!COLUMBIA !RICH… Key points: 1. Contract awarded for small arms, ordnance, and accessories, indicating a need for weapon systems and related components. 2. The contract was not competed, raising questions about potential cost savings and market-driven pricing. 3. FN America LLC, the sole awardee, has a track record in defense manufacturing, suggesting specialized capabilities. 4. The contract duration of 850 days (approx. 2.3 years) suggests a medium-term need for these supplies. 5. Awarded by the Department of the Army, this contract aligns with broader defense procurement strategies for small arms. 6. The contract value of $103.6 million represents a significant investment in the small arms sector.

Value Assessment

Rating: fair

The contract value of $103.6 million for small arms, ordnance, and accessories appears substantial. Without specific details on the exact items procured and their quantities, a direct comparison to similar contracts is challenging. However, the 'NOT COMPETED' status suggests that a competitive bidding process, which typically drives down prices, was not utilized. This raises concerns about whether the government achieved the best possible value for the funds expended. Benchmarking against market rates for comparable weapon systems and accessories would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that a competitive bidding process usually provides. It is unclear from the data if alternative vendors were considered or if there were specific justifications for bypassing competition.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium compared to a competitively bid contract. Without competition, there's less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will be equipped with the contracted small arms, ordnance, and accessories. The services delivered include the provision of essential weapon systems and related components crucial for military operations. The geographic impact is national, supporting the U.S. Army's readiness across various deployments and bases. Workforce implications may include job creation or maintenance at FN America LLC's facilities and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can limit opportunities for other qualified small businesses to participate.
Dependence on a single supplier could create supply chain vulnerabilities.

Positive Signals

Award to an established defense contractor suggests a focus on proven capabilities and reliability.
Contracting for essential weapon systems supports national defense objectives.
The specific nature of the award (small arms) indicates a targeted procurement for critical military needs.

Sector Analysis

The defense sector, particularly the segment focused on small arms and ordnance, is characterized by specialized manufacturing and stringent quality requirements. This contract falls within the 'Weapons' category, a critical component of military readiness. The market for such systems is often dominated by a few key players due to high barriers to entry, including technological expertise, security clearances, and established relationships with government agencies. The value of this contract, $103.6 million, is significant within this niche, reflecting the cost of advanced weapon systems and accessories.

Small Business Impact

This contract was not awarded as a small business set-aside, and the data indicates the prime contractor, FN America LLC, is not a small business. There is no explicit information regarding subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, unless subcontracting opportunities arise organically from the prime contractor's operations.

Oversight & Accountability

Oversight for this Department of the Army contract would typically fall under the purview of the Army Contracting Command and potentially the Department of Defense's Inspector General. Accountability measures are embedded in the contract terms, including delivery schedules and quality standards. Transparency is generally maintained through contract databases like FPDS, although the specifics of the sole-source justification may not be publicly detailed.

Related Government Programs

Department of Defense Procurement
Army Weapon Systems
Small Arms Manufacturing
Ordnance Procurement
Defense Contracts

Risk Flags

Sole-source award may indicate lack of competition, potentially leading to higher costs.
Contract duration and value warrant monitoring for performance and delivery.
Dependence on a single supplier for critical equipment poses a risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $88.0 million to FN AMERICA LLC. 200512!004181!2100!W52H09!TACOM ROCK ISLAND !W52H0905C0283 !A!N! !N! ! !20050902!20070730!098401086!098401086!370005936!N!F N MANUFACTURING LLC !797 OLD CLEMSON RD !COLUMBIA !SC!29229!16000!079!45!COLUMBIA !RICHLAND !S CAROLINA!+000052065090!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A5 !WEAPONS !000 !* !332994!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is FN AMERICA 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 $88.0 million.

What is the period of performance?

Start: 2005-09-02. End: 2007-12-31.

What specific types of small arms, ordnance, and accessories are included in this $103.6 million contract?

The provided data indicates the North American Industry Classification System (NAICS) code is 332994, which covers 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing.' While this specifies the general category, the exact list of items procured under this $103.6 million contract is not detailed in the provided data. This could range from individual firearms and their components to larger ordnance items, ammunition, or related support equipment. A more granular breakdown would typically be found in the contract's statement of work or line item details, which are not accessible here. Understanding the specific items is crucial for a precise assessment of value and necessity.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data explicitly states the contract type as 'NOT COMPETED,' indicating a sole-source award. Common justifications for sole-source contracts include situations where only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For defense procurements, this might involve proprietary technology, unique manufacturing capabilities held by a single entity, or specific compatibility requirements with existing systems. Without further documentation, the precise reason for bypassing competition for this $103.6 million award to FN America LLC remains unspecified in the provided dataset. Such justifications are typically documented by the procuring agency.

How does the contract value of $103.6 million compare to historical spending on similar small arms and ordnance by the Department of the Army?

Comparing the $103.6 million contract value requires analyzing historical spending patterns for similar items (NAICS 332994 or related categories) by the Department of the Army. Historical data from FPDS shows that the Army procures significant quantities of small arms and ordnance regularly. For instance, in fiscal years prior to and following 2005-2007, the Army has awarded numerous contracts in the millions, and sometimes billions, for weapon systems, ammunition, and related parts. The $103.6 million figure for this specific contract appears to be a substantial, but not unprecedented, investment for acquiring a range of such equipment over its 850-day period. A detailed trend analysis would reveal if this represents an increase or decrease in per-unit costs or overall volume compared to previous periods.

What is FN America LLC's track record with the Department of Defense, particularly concerning contracts for small arms and ordnance?

FN America LLC (and its predecessor/related entities like FN Manufacturing) has a long-standing and significant track record as a supplier to the U.S. military, including the Department of Defense and specifically the Department of the Army. They are known manufacturers of various small arms, including rifles (like the M4 and M16 variants), machine guns, and pistols, as well as related components and accessories. Their history includes numerous contract awards for these types of items, often valued in the tens or hundreds of millions of dollars. This extensive experience suggests a deep familiarity with military specifications, production capabilities, and the demands of defense contracting, making them a frequent and established vendor in this sector.

What are the potential risks associated with a sole-source contract of this magnitude for essential military equipment?

Sole-source contracts, especially for essential military equipment like small arms and ordnance valued at $103.6 million, carry several risks. Firstly, the lack of competition can lead to inflated prices, meaning taxpayers may bear a higher cost than if the contract were competed. Secondly, it can foster vendor lock-in, making it difficult and costly to switch suppliers in the future. Thirdly, it reduces the incentive for the sole provider to innovate or improve efficiency, as they face no direct market pressure. Finally, it can create supply chain vulnerabilities if the single provider experiences production issues, financial instability, or geopolitical disruptions. Robust oversight and negotiation are critical to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Societ Herstalienne Pour LA Finance L'industrielle ET LE C (UEI: 370005936)

Address: 797 OLD CLEMSON RD, COLUMBIA, SC, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline