Army awards $26.5M contract for pyrotechnics, highlighting a significant investment in ammunition manufacturing

Contract Overview

Contract Amount: $26,461,777 ($26.5M)

Contractor: ATK Launch Systems LLC

Awarding Agency: Department of Defense

Start Date: 2003-10-24

End Date: 2007-06-30

Contract Duration: 1,345 days

Daily Burn Rate: $19.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200401!000034!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0002 !A!N! !N! ! !20031024!20041230!002241164!002241164!001339472!N!ATK THIOKOL INC !9160 NORTH HIGHWAY 83 !CORINNE !UT!84307!08460!003!49!BRIGHAM CITY !BOX ELDER !UTAH !+000009552591!N!N!000000000000!1370!PYROTECHNICS !A6 !AMMUNITION !000 !* !325998!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!001!B! !A!N!A! ! !N!C!N! ! ! !C!C!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: BRIGHAM CITY, BOX ELDER County, UTAH, 84302

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $26.5 million to ATK LAUNCH SYSTEMS LLC for work described as: 200401!000034!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0002 !A!N! !N! ! !20031024!20041230!002241164!002241164!001339472!N!ATK THIOKOL INC !9160 NORTH HIGHWAY 83 !CORINNE !UT!84307!08460!003!49!BRIGHAM CITY !BOX … Key points: 1. Contract value represents a substantial portion of the total federal spending on this specific type of ammunition. 2. The award to ATK THIOKOL INC suggests a focus on established suppliers for critical defense components. 3. The duration of the contract (over 3 years) indicates a long-term need for these pyrotechnic materials. 4. Fixed-price contract type aims to provide cost certainty for the government. 5. The geographic location of the contractor in Utah may have implications for regional economic impact and supply chain logistics.

Value Assessment

Rating: good

The contract value of $26.5 million for pyrotechnics appears reasonable given the duration and the nature of defense procurement. Benchmarking against similar ammunition contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to control costs, but the ultimate value depends on the contractor's efficiency and the market price of raw materials.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally expected to yield better pricing and value for the government. The number of bidders is not specified, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces.

Public Impact

This contract directly benefits the U.S. Army by ensuring a supply of essential pyrotechnic materials for ammunition. The services delivered are critical for national defense readiness and operational capabilities. The geographic impact is primarily centered around the contractor's facility in Corinne, Utah, potentially creating or sustaining jobs in the region. Workforce implications include the need for skilled labor in chemical manufacturing and ordnance production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if the sole contractor faces production issues.
Reliance on a single contractor for a critical defense component could pose a risk.
Fluctuations in raw material costs could impact the final cost-effectiveness if not adequately managed within the fixed-price contract.

Positive Signals

Award to an established company with a track record in defense contracting.
Firm fixed-price contract provides budget predictability.
Full and open competition suggests a healthy market for these goods.

Sector Analysis

The defense sector, particularly ammunition manufacturing, is characterized by specialized production processes and stringent quality control requirements. Federal spending in this area is driven by national security needs and strategic stockpiling. This contract for pyrotechnics fits within the broader category of ordnance and ammunition procurement, a critical segment of the defense industrial base. Comparable spending benchmarks would typically be found within the Department of Defense's overall budget for tactical munitions.

Small Business Impact

There is no indication in the provided data that this contract included a small business set-aside. The prime contractor, ATK THIOKOL INC, is a significant entity. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in this award information. The impact on the small business ecosystem would depend on the extent to which the prime contractor engages with smaller suppliers.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified goods at the agreed-upon price. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance and Explosives Manufacturing
Chemical Manufacturing Contracts
U.S. Army Industrial Operations Support

Risk Flags

Contract Duration
Single Source Reliance (potential)
Raw Material Price Volatility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.5 million to ATK LAUNCH SYSTEMS LLC. 200401!000034!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0002 !A!N! !N! ! !20031024!20041230!002241164!002241164!001339472!N!ATK THIOKOL INC !9160 NORTH HIGHWAY 83 !CORINNE !UT!84307!08460!003!49!BRIGHAM CITY !BOX ELDER !UTAH !+000009552591!N!N!000000000000!1370!PYROTECHNICS !A6 !AMMUNITION !000 !* !325998!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is ATK LAUNCH SYSTEMS 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 $26.5 million.

What is the period of performance?

Start: 2003-10-24. End: 2007-06-30.

What is the historical spending trend for pyrotechnics by the U.S. Army?

Analyzing historical spending data for pyrotechnics by the U.S. Army requires access to detailed procurement records over multiple fiscal years. Generally, spending in this category can fluctuate based on operational tempo, modernization efforts, and inventory management strategies. Contracts for pyrotechnics are often awarded through competitive bidding processes, with values varying significantly based on quantity, specifications, and market conditions. Long-term trends may indicate increased investment during periods of heightened global security concerns or shifts towards new technological requirements. Without specific historical data for this particular type of pyrotechnic, it's difficult to provide precise figures, but it is a consistent component of defense budgets.

How does the awarded price compare to market rates for similar pyrotechnic materials?

A direct comparison of the awarded price to current market rates for similar pyrotechnic materials is challenging without access to proprietary pricing data or a comprehensive market analysis specific to defense-grade pyrotechnics. Factors influencing market rates include the cost of raw materials (e.g., specific chemicals, metals), manufacturing complexity, quality control standards, and economies of scale. The firm fixed-price nature of this contract suggests that ATK THIOKOL INC committed to a price based on their assessment of these factors at the time of bidding. Government agencies often conduct price analyses and use historical data to ensure fair and reasonable pricing, but the exact benchmark against commercial market rates is not publicly available.

What are the specific risks associated with relying on ATK THIOKOL INC for this pyrotechnics contract?

The primary risks associated with relying on ATK THIOKOL INC for this pyrotechnics contract include potential supply chain disruptions if the company faces production issues, labor strikes, or raw material shortages. As a single source for a critical component, any failure on their part could impact military readiness. There's also the risk of cost overruns if the fixed-price contract does not adequately account for unforeseen increases in material or labor costs, although the contractor bears this risk. Furthermore, dependence on a single supplier can reduce leverage for future negotiations. Ensuring robust quality control and contingency planning by the contractor and the Army is crucial to mitigate these risks.

What is the track record of ATK THIOKOL INC in fulfilling defense contracts, particularly for ammunition components?

ATK THIOKOL INC, and its successor entities like Northrop Grumman (which acquired Orbital ATK, formerly ATK), have a long-standing and extensive track record in fulfilling defense contracts, particularly in the realm of ammunition and propulsion systems. They are known for producing solid rocket motors for space launch vehicles and missiles, as well as various types of munitions. Their experience encompasses complex manufacturing processes and adherence to stringent military specifications. While specific performance details for every contract are not always public, the company's continued success in securing significant defense awards suggests a generally reliable performance history in delivering complex and critical defense materiel.

What are the potential long-term implications of this contract on the pyrotechnics market?

This contract, valued at $26.5 million over its duration, signifies a substantial commitment by the U.S. Army to secure a specific type of pyrotechnic material. For ATK THIOKOL INC, it provides a stable revenue stream and reinforces their position as a key supplier in the defense sector. In the broader pyrotechnics market, particularly within the defense industrial base, such awards can influence investment in production capacity and research and development. It may also signal demand trends to other potential suppliers or competitors. However, the overall long-term market impact is likely contained within the specialized niche of military-grade pyrotechnics, which operates under different dynamics than the commercial sector.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 9160 NORTH HIGHWAY 83, CORINNE, UT, 01

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline