Army awards $61.1M contract for ammunition, with Alliant Techsystems Inc. as the primary contractor

Contract Overview

Contract Amount: $61,085,814 ($61.1M)

Contractor: Alliant Ammunition Systems Company, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2003-12-30

End Date: 2007-03-31

Contract Duration: 1,187 days

Daily Burn Rate: $51.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200403!000377!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0019 !A!N! !N! ! !20031230!20050531!126323166!126323166!618705925!N!ALLIANT TECHSYSTEMS INC !900 EHLEN DRIVE !ANOKA !MN!55303!58000!123!27!ST. PAUL !RAMSEY !MINNESOTA !+000016070261!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !99990909!B! ! !B! !D!N!J!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: ANOKA, ANOKA County, MINNESOTA, 55303

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $61.1 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C. for work described as: 200403!000377!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0019 !A!N! !N! ! !20031230!20050531!126323166!126323166!618705925!N!ALLIANT TECHSYSTEMS INC !900 EHLEN DRIVE !ANOKA !MN!55303!58000!123!27!ST. PAUL !RAMS… Key points: 1. The contract value of $61.1 million represents a significant investment in maintaining and supplying essential ammunition. 2. Competition for this contract was conducted under a 'full and open competition after exclusion of sources' clause, suggesting a specific but competitive procurement process. 3. The contract duration of approximately 3.9 years (1187 days) indicates a medium-term need for these services. 4. The primary contractor, Alliant Techsystems Inc., has a substantial presence in the defense sector, particularly in munitions. 5. The contract falls under the 'Ammunition (except Small Arms) Manufacturing' NAICS code, highlighting its specific industrial focus. 6. The award was made to a single entity, Alliant Ammunition Systems Company, L.L.C., indicating a focused supplier relationship for this particular requirement.

Value Assessment

Rating: good

The contract value of $61.1 million for ammunition manufacturing appears reasonable given the duration and the nature of defense procurement. Benchmarking against similar large-scale ammunition contracts would provide a more precise value-for-money assessment. The fixed-price nature of the contract shifts some risk to the contractor, which can be favorable for the government if managed effectively. The contractor's established role in this sector suggests familiarity and potential efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This procurement method implies that while the competition was open, certain sources may have been excluded based on specific criteria or prior arrangements, potentially limiting the pool of bidders. Further details on the exclusion criteria would be needed to fully assess the breadth of competition and its impact on price discovery.

Taxpayer Impact: While the competition was not entirely unrestricted, the 'full and open' aspect suggests an effort to achieve competitive pricing. However, any exclusions could potentially lead to higher costs for taxpayers compared to a truly unrestricted full and open competition.

Public Impact

The U.S. Army is the primary beneficiary, ensuring a supply of critical ammunition for its operations. The contract supports the manufacturing of ammunition, specifically within the 'Ammunition, through 30 mm' category. The geographic impact is primarily centered around the contractor's facilities in Minnesota, contributing to the regional economy. This contract sustains jobs within the defense manufacturing sector, particularly at Alliant Techsystems Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to 'exclusion of sources' clause.
Reliance on a single entity for a critical supply chain component.
Long-term contract duration may not fully capture market price fluctuations.

Positive Signals

Award to an established contractor with expertise in ammunition.
Firm Fixed Price contract type provides cost certainty for the government.
Contract duration aligns with anticipated operational needs.

Sector Analysis

The defense sector, particularly the segment focused on ordnance and ammunition manufacturing, is a critical component of national security. This contract fits within the broader landscape of military logistics and supply chain management. Spending in this area is often driven by geopolitical factors and readiness requirements. Comparable spending benchmarks would typically involve analyzing other large-scale ammunition procurements by various military branches.

Small Business Impact

This contract was not set aside for small businesses, and the award went to a large corporation. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem is likely minimal unless specific subcontracting opportunities are mandated or pursued by the prime contractor.

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 structure, requiring the contractor to deliver specified goods. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Department of Defense Ammunition Procurement
Army Ordnance and Munitions Programs
Defense Industrial Base Contracts
Alliant Techsystems Inc. Defense Contracts

Risk Flags

Potential for limited competition
Reliance on a single prime contractor
Need for ongoing quality assurance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.1 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C.. 200403!000377!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0019 !A!N! !N! ! !20031230!20050531!126323166!126323166!618705925!N!ALLIANT TECHSYSTEMS INC !900 EHLEN DRIVE !ANOKA !MN!55303!58000!123!27!ST. PAUL !RAMSEY !MINNESOTA !+000016070261!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $61.1 million.

What is the period of performance?

Start: 2003-12-30. End: 2007-03-31.

What is the historical spending pattern for ammunition procurement by the Department of the Army?

Historical spending on ammunition by the Department of the Army has been substantial and consistent, reflecting the ongoing need for training, operational readiness, and strategic stockpiling. Annual expenditures can fluctuate based on global security environments, specific military campaigns, and modernization efforts. Major contracts, like the one awarded to Alliant Techsystems Inc., are often part of a larger, multi-year strategy to ensure a stable supply chain for various calibers and types of munitions. Analyzing past budgets and contract awards reveals a significant portion of the Army's procurement budget is allocated to ordnance, with key suppliers like Alliant, General Dynamics, and Northrop Grumman frequently appearing as awardees. This specific contract's value of $61.1 million over approximately four years is within the typical range for significant, but not the largest, ammunition procurements.

How does the pricing of this contract compare to similar ammunition procurements?

Directly comparing the pricing of this $61.1 million contract to similar ammunition procurements requires access to detailed cost breakdowns and specific item quantities, which are not publicly available. However, the contract type, 'Firm Fixed Price,' suggests that the government has negotiated a set price for the specified goods, aiming for cost certainty. The 'full and open competition after exclusion of sources' clause indicates a competitive process, but the exclusion of certain sources might influence the final price. To benchmark effectively, one would need to compare the per-unit cost of specific ammunition types (e.g., rounds per dollar for a particular caliber) against historical awards for identical or comparable items, considering factors like inflation, quantity discounts, and contractor overhead. Without such granular data, a definitive price comparison is challenging, but the contract's value appears aligned with substantial defense supply agreements.

What are the key performance indicators (KPIs) for this ammunition contract?

Key performance indicators for this ammunition contract would likely focus on several critical areas to ensure mission success and value for the government. These typically include delivery timeliness, ensuring that ammunition is supplied according to the schedule outlined in the contract to meet operational demands. Quality assurance is paramount; the ammunition must meet stringent military specifications and safety standards, with metrics potentially including defect rates or rejection percentages. Furthermore, compliance with contract terms, including reporting requirements and adherence to any specific logistical or handling protocols, would be monitored. While not explicitly stated in the award data, the government would also implicitly track the contractor's performance in terms of production capacity and responsiveness to potential surges in demand, ensuring the long-term viability of the supply chain.

What is the track record of Alliant Techsystems Inc. in fulfilling defense contracts, particularly for ammunition?

Alliant Techsystems Inc. (now part of Northrop Grumman) has a long and extensive track record in fulfilling defense contracts, including a significant history in the production and supply of ammunition. The company has been a major player in the defense industrial base for decades, known for its capabilities in areas such as propellants, explosives, and various types of munitions. They have historically secured numerous contracts with the U.S. Army, Navy, and Air Force for a wide range of ordnance, from small-caliber ammunition to larger systems. Their experience encompasses research and development, manufacturing, and lifecycle support for defense products. The award of this $61.1 million contract to their subsidiary, Alliant Ammunition Systems Company, L.L.C., underscores their continued relevance and capability in meeting the Department of Defense's ammunition requirements. Their established infrastructure and expertise generally position them as a reliable supplier for such critical needs.

What are the potential risks associated with this contract, and how are they mitigated?

Potential risks associated with this ammunition contract include supply chain disruptions (e.g., raw material shortages, geopolitical impacts on sourcing), production delays, quality control issues, and potential cost overruns if the fixed-price structure proves inadequate for unforeseen circumstances. Mitigation strategies employed by the government typically involve robust contract oversight, including regular performance reviews and site inspections. The 'full and open competition after exclusion of sources' clause, while potentially limiting bidders, aims to select a capable contractor. The firm fixed-price nature itself is a risk mitigation tool, placing the onus on the contractor to manage costs. Furthermore, the government may maintain strategic reserves and diversify suppliers for critical munitions to avoid over-reliance on a single entity, although this specific award is to one primary contractor.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 900 EHLEN DRIVE, ANOKA, MN, 06

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline