Department of the Army awarded $52.9M contract for 30-round magazines, raising questions about competition and value

Contract Overview

Contract Amount: $52,941,101 ($52.9M)

Contractor: Center Industries Corp

Awarding Agency: Department of Defense

Start Date: 2007-09-10

End Date: 2013-12-31

Contract Duration: 2,304 days

Daily Burn Rate: $23.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS IS A 5 YEAR REQUIREMENTS TYPE CONTRACT FOR THE 30 ROUND MAGAZINE.

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67217

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $52.9 million to CENTER INDUSTRIES CORP for work described as: THIS IS A 5 YEAR REQUIREMENTS TYPE CONTRACT FOR THE 30 ROUND MAGAZINE. Key points: 1. Contract awarded to Center Industries Corp for a 5-year requirements type contract. 2. The contract is for 30-round magazines, a critical component for small arms. 3. Awarded under a 'not available for competition' basis, limiting price discovery. 4. The contract duration is 2304 days, spanning over 6 years. 5. The total value of the contract is approximately $52.9 million. 6. The contract was awarded by the Department of the Army, with Kansas as the state of performance. 7. The Product Service Code (PSC) is not specified, but the NAICS code points to small arms manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value for this specific 30-round magazine contract is challenging without detailed specifications and market comparisons. However, the firm fixed-price structure suggests a defined cost expectation. Given the lack of competition, it's difficult to definitively assess if the $52.9 million over approximately six years represents optimal value for the Department of the Army. Further analysis would require comparing unit costs to similar military-grade magazines or commercial equivalents, adjusted for bulk purchasing and specific military requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not available for competition' basis, indicating that the procurement process did not involve soliciting bids from multiple potential suppliers. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or when urgent circumstances prevent a competitive bidding process. The lack of open competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive market.

Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the absence of multiple bids. This sole-source award limits the government's ability to negotiate the best possible price and could potentially lead to higher costs than if the contract had been competed.

Public Impact

The primary beneficiaries are the soldiers and units within the Department of the Army who will receive the 30-round magazines. The contract ensures the supply of essential ammunition feeding devices for small arms. The geographic impact is primarily centered in Kansas, where Center Industries Corp is located and where the contract is performed. The contract supports jobs within the small arms manufacturing sector, specifically at Center Industries Corp.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpricing and reduced value for taxpayer dollars.
The 'not available for competition' status requires thorough justification to ensure it was indeed the only viable option.
Long contract duration without clear performance metrics or options for review could lead to complacency or missed opportunities for cost savings.
Absence of specific details on the magazine's technical specifications makes it difficult to assess its suitability and compare it to market alternatives.

Positive Signals

Firm fixed-price contract provides cost certainty for the government, assuming the price was set appropriately.
Award to a domestic manufacturer supports the U.S. industrial base in ordnance manufacturing.
Requirements type contract ensures that the Army can procure the necessary quantity of magazines as needed over the contract period.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of small arms and related accessories. The market for military-grade firearm components is specialized, with a limited number of manufacturers capable of meeting stringent government specifications and production volumes. While specific market size data for 30-round magazines is not readily available, the overall defense spending on small arms and ammunition is substantial, indicating a significant ongoing demand for such components.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Center Industries Corp, the awardee, is likely a larger entity. There is no information available regarding subcontracting plans for small businesses. This means that the direct economic benefit to the small business ecosystem from this specific contract is likely minimal, unless Center Industries Corp voluntarily engages small businesses for components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The firm fixed-price nature provides some level of financial accountability. Transparency regarding the justification for the sole-source award and detailed performance metrics would be crucial for effective oversight. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Small Arms Procurement
Army Ammunition and Weapons Systems
Ordnance and Accessories Manufacturing Contracts
Requirements Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award lacks competitive pricing.
Potential for inflated costs due to lack of competition.
Limited transparency on justification for sole-source award.
No clear indication of small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.9 million to CENTER INDUSTRIES CORP. THIS IS A 5 YEAR REQUIREMENTS TYPE CONTRACT FOR THE 30 ROUND MAGAZINE.

Who is the contractor on this award?

The obligated recipient is CENTER INDUSTRIES CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $52.9 million.

What is the period of performance?

Start: 2007-09-10. End: 2013-12-31.

What is the specific technical specification and performance standard for the 30-round magazines being procured?

The provided data does not include the specific technical specifications or performance standards for the 30-round magazines. This information is critical for understanding the unique requirements of the Department of the Army and for conducting a meaningful comparison with other available products. Without these details, it is impossible to assess if the procured magazines meet the necessary durability, reliability, and compatibility standards for military use. Further investigation into contract line item numbers (CLINs) or associated technical data packages would be necessary to obtain this crucial information.

What was the justification for awarding this contract on a 'not available for competition' basis?

The justification for awarding this contract as 'not available for competition' (sole-source) is not provided in the data. Typically, such awards are made when only one responsible source is available, or when a compelling urgency, national security, or unique capability prevents a competitive process. For a standard item like a 30-round magazine, a sole-source award would require a strong rationale, such as proprietary design, unique manufacturing capability, or an urgent need that could not be met through competition within the required timeframe. Without this justification, it raises concerns about whether the government explored all viable competitive options.

How does the unit cost of these magazines compare to similar military or commercial offerings?

The provided data does not include the unit cost for the 30-round magazines, only the total contract value ($52.9 million) over its duration. To compare unit costs, we would need to know the total number of magazines procured under this requirements contract. Without this quantity, a direct unit cost comparison is impossible. Furthermore, comparing military-grade magazines to commercial equivalents requires careful consideration of differences in materials, durability testing, production volume, and specific military requirements. A preliminary assessment would require obtaining the total quantity procured and then dividing the total contract value by that quantity.

What is Center Industries Corp's track record in manufacturing defense-related ordnance and accessories?

Center Industries Corp has a history of manufacturing defense-related products, including magazines and other ordnance components. Their involvement in this $52.9 million contract suggests they possess the capability to produce these items at a significant scale. However, a comprehensive assessment of their track record would involve reviewing past performance evaluations, any history of contract disputes or quality issues, and their overall experience with similar government contracts. The fact that they were awarded this contract, even on a sole-source basis, implies a level of established capability recognized by the Department of the Army.

What are the historical spending patterns for 30-round magazines by the Department of the Army?

The provided data focuses on a single contract and does not offer historical spending patterns for 30-round magazines. To understand historical spending, one would need to analyze procurement data over multiple fiscal years, identifying all contracts awarded for similar items, their values, quantities, and award types (competitive vs. sole-source). This would reveal trends in demand, pricing, and the prevalence of competitive versus non-competitive awards, providing context for the current contract's value and procurement method.

What are the potential risks associated with a sole-source award for essential military equipment like magazines?

The primary risks associated with a sole-source award for essential military equipment include potentially higher costs due to the lack of price competition, reduced innovation from a lack of market pressure, and a potential over-reliance on a single supplier. This can create vulnerabilities in the supply chain if the sole source encounters production issues or goes out of business. Furthermore, it limits the government's ability to leverage market dynamics to secure the best possible value and technological advancements. Ensuring robust oversight and justification for sole-source awards is 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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2505 S CUSTER ST, WICHITA, KS, 04

Business Categories: AbilityOne Program Participant, Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $52,941,101

Exercised Options: $52,941,101

Current Obligation: $52,941,101

Contract Characteristics

Cost or Pricing Data: NO

Timeline