Army Awards $194.8M for Ammunition Services to General Dynamics, Facing Limited Competition

Contract Overview

Contract Amount: $210,528,243 ($210.5M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-02-17

End Date: 2009-04-30

Contract Duration: 1,899 days

Daily Burn Rate: $110.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200408!000596!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0030 !A!N! !Y! ! !20040217!20070930!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !10101 DR M L KING ST N !SAINT PETERSBU !FL!33716!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000065932240!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!002!N!1G!Z!N!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $210.5 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: 200408!000596!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0030 !A!N! !Y! ! !20040217!20070930!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !10101 DR M L KING ST N !SAINT PETERSBU !FL!33716!63000!103!12!SAINT PETERSBURG !PINE… Key points: 1. The contract, valued at $194.8 million, is for hazardous substance removal, cleanup, and disposal services related to ammunition. 2. General Dynamics Ordnance and Tactical Systems, Inc. secured the award, indicating a potential lack of broader market competition for these specialized services. 3. The contract's duration of approximately 5 years (1899 days) suggests a long-term need for these critical support functions. 4. The sector is defense, specifically focusing on ammunition manufacturing support services, a niche area within the broader industrial base.

Value Assessment

Rating: fair

The contract value of $194.8 million for specialized hazardous substance services appears significant. Benchmarking against similar, highly specialized environmental cleanup contracts within the defense sector is difficult without more granular data, but the scale suggests a substantial requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under a limited competition, suggesting that only a few sources were solicited or capable of performing the work. This limited competition may have impacted price discovery, potentially leading to a higher price than if full and open competition had been pursued.

Taxpayer Impact: The significant contract value indicates a substantial taxpayer investment. The impact on taxpayers depends on whether the limited competition resulted in a fair and reasonable price compared to what could have been achieved through broader solicitation.

Public Impact

Taxpayers are funding critical hazardous substance cleanup services essential for military readiness and environmental protection. The award impacts the defense industrial base, specifically supporting ammunition-related operations. The long-term nature of the contract suggests ongoing environmental management needs within the Army's operations. The reliance on a limited number of contractors for specialized services raises questions about market dynamics and potential future cost efficiencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may reduce price competitiveness.
Potential for long-term reliance on a single provider.
Specialized nature of services could limit contractor pool.
Environmental cleanup costs can be unpredictable.

Positive Signals

Addresses critical hazardous substance removal needs.
Ensures continuity of essential ammunition support services.
Award to established defense contractor with relevant expertise.

Sector Analysis

This contract falls within the defense sector, specifically supporting ammunition manufacturing and related environmental services. Spending benchmarks for hazardous substance removal and disposal services within the Department of Defense can vary widely based on the scope and complexity of the contamination, but this award represents a significant investment in maintaining operational safety and environmental compliance.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors. The primary awardee is a large corporation, suggesting that opportunities for small businesses may be limited unless they are part of the supply chain or subcontracting network for General Dynamics.

Oversight & Accountability

Oversight would typically involve contract performance monitoring by the Department of the Army to ensure services are delivered according to specifications and within budget. Accountability for taxpayer funds rests on ensuring the contractor meets all contractual obligations and that the pricing remains fair and reasonable throughout the contract's life.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Limited competition may lead to higher costs.
Potential for cost overruns in environmental cleanup.
Long-term contract duration increases exposure to price fluctuations.
Lack of transparency on specific hazardous materials and cleanup scope.
Reliance on a single large contractor for specialized services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $210.5 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. 200408!000596!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0030 !A!N! !Y! ! !20040217!20070930!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !10101 DR M L KING ST N !SAINT PETERSBU !FL!33716!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000065932240!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $210.5 million.

What is the period of performance?

Start: 2004-02-17. End: 2009-04-30.

What specific hazardous substances are being addressed, and what is the estimated volume or extent of the cleanup required?

The contract specifies hazardous substance removal, cleanup, and disposal services, likely related to legacy contamination from ammunition manufacturing or storage. Without further details, the exact substances and the scale of the environmental remediation effort remain unspecified. Understanding the nature and extent of the contamination is crucial for assessing the true value and necessity of the $194.8 million expenditure.

Were alternative, less costly methods for hazardous substance management explored prior to this contract award?

Given the 'limited' competition designation, it's possible that a thorough exploration of all potential cost-saving alternatives was not undertaken. While the contractor is General Dynamics, a large entity, the specific services are highly specialized. Further investigation into the pre-award process would clarify if innovative or more cost-effective solutions were considered, or if the focus was solely on established remediation techniques.

How does the per-unit cost of cleanup or disposal compare to industry averages for similar hazardous materials within a defense context?

Benchmarking the per-unit cost is challenging without specific details on the types and quantities of hazardous substances. However, the overall contract value of $194.8 million over nearly five years suggests a substantial ongoing requirement. A detailed cost analysis comparing this contract's unit rates against similar environmental remediation contracts within the DoD or other federal agencies would be necessary to determine if the pricing is competitive and efficient.

Industry Classification

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

Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION

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: General Dynamics Corp (UEI: 001381284)

Address: 10101 DR M L KING ST N, SAINT PETERSBU, FL, 33716

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline