Army awards $675M contract for ammunition, with Amtec Corporation securing the largest portion

Contract Overview

Contract Amount: $675,220,466 ($675.2M)

Contractor: Amtec Corporation

Awarding Agency: Department of Defense

Start Date: 2005-04-29

End Date: 2013-07-31

Contract Duration: 3,015 days

Daily Burn Rate: $224.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: 200508!000997!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0030 !A!N! !N! ! !20050429!20100930!884356429!884356429!006196174!N!AMTEC CORPORATION !4230 CAPITAL CIRCLE DR !JANESVILLE !WI!53546!37825!105!55!JANESVILLE !ROCK !WISCONSIN !+000046910882!N!N!000046910882!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!K!2!006!K! !Z!N!F! ! !N!B!N!N! ! !D! !B!A!000!A!B!Y!C! ! ! ! ! !0001! !

Place of Performance

Location: JANESVILLE, ROCK County, WISCONSIN, 53546

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $675.2 million to AMTEC CORPORATION for work described as: 200508!000997!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0030 !A!N! !N! ! !20050429!20100930!884356429!884356429!006196174!N!AMTEC CORPORATION !4230 CAPITAL CIRCLE DR !JANESVILLE !WI!53546!37825!105!55!JANESVILLE !ROCK… Key points: 1. Contract value of over $675 million indicates significant demand for ammunition supplies. 2. The contract was competed, suggesting potential for competitive pricing and value. 3. Ammunition, Over 30 MM Up to 75 MM is a critical defense supply category. 4. The contract duration of over 3000 days highlights long-term strategic procurement. 5. The fixed-price with economic price adjustment structure aims to balance cost stability with market fluctuations. 6. The award to Amtec Corporation, a single entity, warrants scrutiny of market concentration.

Value Assessment

Rating: fair

The total award value of $675,220,466.23 for ammunition over a period of approximately 8 years (2005-2013) suggests a substantial investment in defense readiness. Benchmarking this against similar large-scale ammunition procurements is difficult without more specific data on the types and quantities of ammunition. However, the fixed-price with economic price adjustment (FP-EPA) contract type indicates an effort to manage cost volatility, which can be a reasonable approach for long-term supply contracts where material costs are subject to change. The contract's duration and value imply a significant need, but the ultimate value-for-money depends on the unit prices and performance achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which is a less common competition type. This suggests that while the initial solicitation may have been open, specific criteria or exclusions were applied, potentially limiting the pool of eligible bidders. The data indicates 6 bids were received, which is a moderate level of competition. However, the 'exclusion of sources' aspect warrants further investigation to understand why certain potential bidders were not considered, as this could impact the competitiveness of the pricing and the overall value achieved for the government.

Taxpayer Impact: The exclusion of certain sources, even with multiple bidders, could mean that the government did not secure the absolute lowest possible price. Taxpayers may have paid more than they would have in a truly unrestricted full and open competition.

Public Impact

The primary beneficiaries are the U.S. Army and potentially other branches of the Department of Defense requiring ammunition in the specified caliber range. The contract delivers essential ammunition for training, operational readiness, and strategic defense capabilities. The geographic impact is national, supporting defense logistics and readiness across various military installations. Workforce implications include jobs at Amtec Corporation and its supply chain partners, particularly in manufacturing and logistics related to ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Full and Open Competition After Exclusion of Sources' raises questions about the breadth of competition and potential for higher costs.
Reliance on a single primary contractor (Amtec Corporation) for such a large value contract could pose supply chain risks.
The fixed-price with economic price adjustment structure, while managing volatility, can sometimes lead to cost overruns if not carefully monitored.

Positive Signals

The receipt of 6 bids indicates a level of interest and capability in the market for this type of ammunition.
The contract's long duration suggests a stable, long-term supply chain solution for critical defense needs.
The fixed-price with economic price adjustment mechanism is designed to ensure supply continuity despite market fluctuations.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of ammunition. The market for defense-related ammunition is characterized by high barriers to entry, stringent quality control, and long-term government procurement cycles. Amtec Corporation operates in a niche but critical segment of this market. Comparable spending benchmarks would involve analyzing other large-scale contracts for similar caliber ammunition awarded by the Department of Defense or allied nations, which often run into hundreds of millions of dollars over multi-year periods.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically tied to small business set-asides for this particular award. The focus appears to be on large-scale prime contracting. Any involvement of small businesses would likely be through Amtec Corporation's own supply chain decisions, which are not detailed in this data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight bodies, including the Defense Contract Management Agency (DCMA) and potentially the Department of Defense Office of Inspector General (DoD OIG) for audits and investigations. Transparency is facilitated through contract databases like FPDS, but detailed performance metrics and spending breakdowns are often not publicly available. Accountability measures would include contract compliance, delivery schedules, and quality assurance.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance and Ammunition Manufacturing
Military Readiness Contracts
Fixed-Price with Economic Price Adjustment Contracts
Defense Industrial Base Supply Chain

Risk Flags

Competition Limitation
Potential for Cost Overruns
Supply Chain Dependency
Contract Type Complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $675.2 million to AMTEC CORPORATION. 200508!000997!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0030 !A!N! !N! ! !20050429!20100930!884356429!884356429!006196174!N!AMTEC CORPORATION !4230 CAPITAL CIRCLE DR !JANESVILLE !WI!53546!37825!105!55!JANESVILLE !ROCK !WISCONSIN !+000046910882!N!N!000046910882!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is AMTEC CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $675.2 million.

What is the period of performance?

Start: 2005-04-29. End: 2013-07-31.

What is Amtec Corporation's track record with similar large-scale ammunition contracts?

Amtec Corporation has a history of supplying ammunition to the U.S. military. While this specific $675 million contract is substantial, the company has been involved in various defense contracts over the years. Publicly available data often shows a pattern of awards for specific types of munitions. A deeper dive into contract databases would reveal the frequency, value, and types of ammunition previously supplied by Amtec. It's important to assess if they have a history of meeting delivery schedules, quality standards, and managing costs effectively on contracts of comparable size and complexity. Past performance reviews and any reported contract disputes or terminations would be critical indicators of their reliability.

How does the unit cost of ammunition under this contract compare to market rates or similar government contracts?

Determining the precise unit cost and comparing it to market rates is challenging without specific line-item details on the types and quantities of ammunition procured under this $675 million contract. The contract covers 'Ammunition, Over 30 MM Up to 75 MM,' which is a broad category. The Fixed Price with Economic Price Adjustment (FP-EPA) structure also means unit costs could fluctuate. To perform a robust comparison, one would need to identify the specific National Stock Numbers (NSNs) or item descriptions, the quantities ordered, and the unit prices paid. Then, these could be benchmarked against historical DoD contract awards for identical or similar items, or against commercial price lists if available, though defense-grade ammunition often commands premium pricing due to stringent specifications and testing.

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

Key risks include supply chain disruptions (especially given the long duration), potential cost overruns due to economic price adjustments, and performance issues related to quality or delivery timelines. The 'Full and Open Competition After Exclusion of Sources' also presents a risk if it limited the competitive landscape, potentially leading to suboptimal pricing. Mitigation strategies likely involve robust contract oversight by the Army, including monitoring Amtec's production capacity, supply chain resilience, and adherence to quality standards. The FP-EPA clause itself is a mitigation tool for market volatility, but requires careful administration. The exclusion of sources needs to be justified to ensure it wasn't detrimental to achieving best value.

How effective has Amtec Corporation been in fulfilling its obligations under this contract?

Assessing the effectiveness requires access to performance data, which is often not fully public. Key indicators would include on-time delivery rates, defect rates (quality control), and adherence to budget, especially considering the economic price adjustment component. Given the contract's duration (2005-2013), there would have been multiple performance periods to evaluate. Reports from the Defense Contract Management Agency (DCMA) or any contractor performance assessment reporting (CPARS) would provide insights. Without such specific data, effectiveness remains an assumption based on the contract's completion and renewal (if any).

What are the historical spending patterns for ammunition in the 30mm to 75mm caliber range by the Department of the Army?

Historical spending on ammunition in the 30mm to 75mm range by the Department of the Army is substantial and fluctuates based on global security environments, operational tempo, and modernization programs. This $675 million award from 2005-2013 represents a significant portion of spending during that period, likely driven by ongoing conflicts and readiness requirements. Annual spending can range from hundreds of millions to over a billion dollars, depending on the specific calibers and quantities needed. Factors influencing spending include the phase-out of older systems, introduction of new weapon platforms requiring different ammunition, and strategic stockpiling initiatives. Analyzing trends requires looking at multi-year budget allocations and contract awards across various defense agencies.

What is the significance of the 'Ammunition, Over 30 MM Up to 75 MM' (NAICS 332993) category in the context of Army operations?

Ammunition in the 30mm to 75mm caliber range is critical for a variety of Army platforms, including infantry fighting vehicles (like the Bradley Fighting Vehicle, which uses 25mm, but larger calibers are relevant for other systems), attack helicopters (e.g., Apache), naval guns, and certain artillery systems. This category bridges the gap between smaller caliber small arms ammunition and larger artillery or missile systems. It is essential for direct fire support, anti-armor capabilities, and engaging various ground and air threats. Ensuring a consistent and high-quality supply of this ammunition is vital for maintaining combat effectiveness, troop training, and overall force readiness across diverse operational scenarios.

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: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: National Presto Industries Inc (UEI: 006196174)

Address: 4230 CAPITAL CIRCLE DR, JANESVILLE, WI, 01

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $339,753,986

Exercised Options: $339,753,986

Current Obligation: $675,220,466

Contract Characteristics

Cost or Pricing Data: NO

Timeline