Army Awards $181M Ammunition Contract to Armtec Defense Products, Raising Oversight Concerns

Contract Overview

Contract Amount: $181,014,086 ($181.0M)

Contractor: Armtec Defense Products CO.

Awarding Agency: Department of Defense

Start Date: 2004-10-20

End Date: 2010-06-30

Contract Duration: 2,079 days

Daily Burn Rate: $87.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200501!000059!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0096 !A!N! !N! ! !20041020!20060315!611068453!611068453!043190826!N!ARMTEC DEFENSE PRODUCTS CO INC!85-901 AVE 53 !COACHELLA !CA!92236!14260!065!06!COACHELLA !RIVERSIDE !CALIFORNIA!+000021185869!N!N!000000000000!1370!PYROTECHNICS !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!J!2!003!N!3A!A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!D!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: MILAN, GIBSON County, TENNESSEE, 38358

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $181.0 million to ARMTEC DEFENSE PRODUCTS CO. for work described as: 200501!000059!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0096 !A!N! !N! ! !20041020!20060315!611068453!611068453!043190826!N!ARMTEC DEFENSE PRODUCTS CO INC!85-901 AVE 53 !COACHELLA !CA!92236!14260!065!06!COACHELLA !RIVE… Key points: 1. The Department of Defense awarded a significant contract for ammunition to Armtec Defense Products. 2. The contract's value of over $181 million warrants scrutiny regarding its pricing and necessity. 3. Competition was limited, raising questions about price discovery and potential taxpayer impact. 4. The sector is defense manufacturing, specifically ammunition, a critical but sensitive area.

Value Assessment

Rating: questionable

The contract value of $181,014,085.60 for ammunition appears high, especially given the limited competition and the relatively short duration of the base contract. Benchmarking against similar ammunition procurements is difficult without more specific product details, but the scale suggests a need for thorough price justification.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that not all potential sources were considered. This limited competition likely impacted price discovery, potentially leading to a less favorable price for the government compared to a fully open process.

Taxpayer Impact: The limited competition and significant contract value suggest a potential for reduced taxpayer value. Ensuring the price reflects fair market value is crucial to mitigate this risk.

Public Impact

Taxpayers may be overpaying for ammunition due to limited competition. The Department of Defense's procurement process for this contract warrants further investigation. The long contract duration (over 5 years) for a potentially volatile market raises questions about flexibility and future cost savings.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
High contract value
Potential for overpayment
Oversight concerns

Positive Signals

Contract awarded to a known defense supplier
Specific product category (ammunition) identified

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition. Spending in this sector is critical for national security but is also subject to significant price fluctuations and potential for waste if not managed effectively. Benchmarks are difficult without specific item details, but large-scale ammunition contracts often exceed tens of millions.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. The prime contractor, Armtec Defense Products, is a significant entity, and the nature of the procurement may not lend itself to subcontracting opportunities for smaller firms.

Oversight & Accountability

The award method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' raises questions about the thoroughness of the oversight process. Further review is needed to ensure that all reasonable sources were considered and that the final price was justified through robust negotiation and market analysis.

Related Government Programs

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

Risk Flags

Limited competition may have inflated prices.
High contract value requires thorough justification.
Potential for reduced taxpayer value due to procurement method.
Lack of transparency regarding source exclusion.
Long contract duration could lead to suboptimal pricing over time.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $181.0 million to ARMTEC DEFENSE PRODUCTS CO.. 200501!000059!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J04C0096 !A!N! !N! ! !20041020!20060315!611068453!611068453!043190826!N!ARMTEC DEFENSE PRODUCTS CO INC!85-901 AVE 53 !COACHELLA !CA!92236!14260!065!06!COACHELLA !RIVERSIDE !CALIFORNIA!+000021185869!N!N!000000000000!1370!PYROTECHNICS !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is ARMTEC DEFENSE PRODUCTS CO..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $181.0 million.

What is the period of performance?

Start: 2004-10-20. End: 2010-06-30.

What specific types of ammunition were procured under this contract, and how does the unit price compare to market benchmarks for similar items?

The data identifies the National Stock Number (NSN) as 1370 for PYROTECHNICS and the Product Service Code (PSC) as A6 for AMMUNITION. However, specific unit pricing details are not provided in the dataset. A comprehensive analysis would require comparing the awarded prices against historical data for similar pyrotechnic ammunition procured by the DoD or other government agencies to assess value for money.

What were the justifications for excluding other potential sources of ammunition supply, and did this exclusion significantly impact the final contract price?

The justification for excluding other sources is not detailed in the provided data. However, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' inherently limits the competitive landscape. This exclusion likely reduced price pressure, potentially leading to a higher contract price than if a broader competition had been conducted. Further investigation into the specific reasons for exclusion is warranted.

How effectively does the Department of Defense monitor the performance and cost-effectiveness of long-term ammunition contracts like this one to ensure ongoing value?

The effectiveness of ongoing monitoring is not detailed in this data. However, the contract's duration (2004-2010) suggests a need for robust performance metrics and regular price reviews. The Department of Defense typically employs contract officers and quality assurance representatives to oversee such contracts, but the specific mechanisms for ensuring cost-effectiveness over the long term require deeper examination.

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: ONLY ONE SOURCE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Esterline Technologies Corporation (UEI: 043190826)

Address: 85-901 AVE 53, COACHELLA, CA, 25

Business Categories: Category Business, Not Designated a Small Business

Timeline