Army awards $190M contract for ammunition, highlighting a significant investment in defense readiness

Contract Overview

Contract Amount: $189,670,360 ($189.7M)

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

Awarding Agency: Department of Defense

Start Date: 2005-06-28

End Date: 2010-01-30

Contract Duration: 1,677 days

Daily Burn Rate: $113.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200509!001326!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0047 !A!N! !N! ! !20050628!20051130!126323166!126323166!618705925!N!ALLIANT TECHSYSTEMS INC !900 EHLEN DRIVE !ANOKA !MN!55303!01720!003!27!ANOKA !ANOKA !MINNESOTA !+000002668282!Y!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!J!2!002!N!3A!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!B!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $189.7 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C. for work described as: 200509!001326!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0047 !A!N! !N! ! !20050628!20051130!126323166!126323166!618705925!N!ALLIANT TECHSYSTEMS INC !900 EHLEN DRIVE !ANOKA !MN!55303!01720!003!27!ANOKA !ANOK… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $189.7M indicates a substantial procurement for ammunition. 3. The duration of the contract (over 5 years) points to a long-term need for these supplies. 4. The primary contractor, Alliant Ammunition Systems Company, L.L.C., is a key player in this sector. 5. The contract falls under the 'Ammunition (except Small Arms) Manufacturing' NAICS code, specifying the product category. 6. The award type 'DCA' (Defense Contract Audit Agency) suggests a focus on cost and performance oversight.

Value Assessment

Rating: good

The contract value of approximately $190 million for ammunition over a period of more than five years appears to be within a reasonable range for large-scale defense procurements. Benchmarking against similar large-volume ammunition contracts would provide a clearer picture of value for money. The firm fixed-price nature of the contract shifts risk to the contractor, which can be beneficial for the government if managed effectively. However, without specific per-unit cost data or comparisons to market rates for similar ammunition types, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was broad, certain sources may have been excluded based on specific criteria. The presence of two bidders suggests a moderate level of competition. A higher number of bidders typically leads to more competitive pricing and better value for the government. The specific reasons for excluding other potential sources would need further investigation to fully understand the impact on price discovery.

Taxpayer Impact: The competitive nature of this award, even with potential exclusions, aims to secure the best possible pricing for taxpayers. However, understanding the rationale behind source exclusions is crucial to ensure that taxpayers are not disadvantaged by a lack of broader competition.

Public Impact

The U.S. Army is the primary beneficiary, securing essential ammunition supplies for its operations. This contract ensures the availability of 'Ammunition, Through 30 MM,' critical for various military applications. The contract's geographic impact is primarily national, supporting domestic defense manufacturing and supply chains. It supports jobs within the defense manufacturing sector, particularly in ammunition production and related industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to 'exclusion of sources' clause, which could impact price.
Long contract duration may lead to price escalation if not managed with appropriate economic price adjustment clauses.
Reliance on a single primary contractor for a critical defense commodity warrants close monitoring.

Positive Signals

Awarded through a competitive process, indicating efforts to secure value.
Firm fixed-price contract structure transfers cost overrun risk to the contractor.
Contractor has a significant role in ammunition systems, suggesting specialized expertise.

Sector Analysis

This contract falls within the 'Ammunition (except Small Arms) Manufacturing' sector, a critical component of the broader defense industrial base. The market for defense-related manufacturing, particularly ammunition, is characterized by high barriers to entry, stringent quality control, and significant government oversight. Spending in this sector is driven by national security requirements and geopolitical factors. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by the Department of Defense and allied nations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the primary contractor is not a small business (ss: false). This suggests that the procurement was likely aimed at large, established defense manufacturers capable of meeting the scale and technical requirements. There is no explicit information on subcontracting plans for small businesses within this award, which could represent missed opportunities for small business participation in the defense supply chain.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a Department of Defense contract, it likely falls under the purview of the Defense Contract Audit Agency (DCAA) for financial audits and the Defense Contract Management Agency (DCMA) for performance monitoring. Inspector General investigations are also a possibility for significant issues. Transparency is generally maintained through contract award databases, but detailed performance and cost data may be restricted.

Related Government Programs

Department of Defense Ammunition Procurement
Army Weapons Systems Support
Defense Industrial Base Manufacturing
Ordnance and Ammunition Manufacturing
Federal Ammunition Contracts

Risk Flags

Potential for limited competition due to source exclusion.
Long contract duration may introduce price volatility risks.
Reliance on a single contractor for critical supplies requires close monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $189.7 million to ALLIANT AMMUNITION SYSTEMS COMPANY, L.L.C.. 200509!001326!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0047 !A!N! !N! ! !20050628!20051130!126323166!126323166!618705925!N!ALLIANT TECHSYSTEMS INC !900 EHLEN DRIVE !ANOKA !MN!55303!01720!003!27!ANOKA !ANOKA !MINNESOTA !+000002668282!Y!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !202

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 $189.7 million.

What is the period of performance?

Start: 2005-06-28. End: 2010-01-30.

What is the track record of Alliant Ammunition Systems Company, L.L.C. with similar large-scale ammunition contracts?

Alliant Ammunition Systems Company, L.L.C. (a joint venture of BAE Systems and General Dynamics) has a significant history in supplying ammunition to the U.S. military. They have been involved in various large-scale contracts for different calibers and types of munitions. For instance, they have been a key contractor for medium caliber ammunition and artillery shells. Their experience includes managing complex production lines, ensuring quality control, and meeting demanding delivery schedules. Analyzing their past performance on similar contracts, including any past performance issues or commendations, would provide further insight into their capability to execute this current award successfully. Historical data from contract databases and performance reports would be essential for a comprehensive assessment.

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

Determining the precise per-unit cost and comparing it to market rates or other government contracts is challenging without access to the detailed pricing structure of this specific award. The contract is for 'Ammunition, Through 30 MM,' which encompasses a wide range of products. The total award of approximately $190 million over 1677 days (roughly 4.6 years) provides an average annual value of about $40.8 million. If we assume a significant portion of this value is for the ammunition itself, the per-unit cost would depend heavily on the quantity and specific types of ammunition procured. Benchmarking would require identifying comparable contracts for similar ammunition types and quantities awarded around the same period, factoring in differences in contract type (e.g., firm fixed price vs. cost-plus) and competition levels. Publicly available data often aggregates costs, making direct per-unit comparisons difficult.

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

Primary risks for this contract include potential supply chain disruptions, quality control failures, and cost overruns (despite the firm fixed-price nature, scope creep or unforeseen issues can arise). The 'Full and Open Competition After Exclusion of Sources' could also pose a risk if the exclusion criteria unduly limited competition, potentially leading to less favorable pricing. Mitigation strategies likely involve robust contractor oversight by the Army, stringent quality assurance protocols, and performance monitoring. The firm fixed-price contract itself mitigates financial risk for the government by capping the contractor's potential profit and placing the burden of cost management on them. However, the government must ensure the contractor has the capacity and incentive to maintain quality and delivery schedules under this pricing structure.

How effective has the 'Full and Open Competition After Exclusion of Sources' approach been in securing value for this ammunition procurement?

The effectiveness of 'Full and Open Competition After Exclusion of Sources' in securing value is nuanced. This method aims to ensure broad competition while allowing for specific exclusions based on defined criteria, potentially related to security, capability, or past performance. The fact that two bids were received suggests some level of competition was achieved. However, the 'exclusion of sources' aspect means that the government may not have benefited from the widest possible pool of bidders, which typically drives down prices further. To assess true value, one would need to understand the justification for the exclusions and compare the awarded price against what might have been achieved in a truly unrestricted full and open competition. Without this context, it's difficult to definitively state the level of value secured solely based on this award type.

What is the historical spending trend for ammunition procurement by the Department of the Army in this category?

Historical spending on ammunition, particularly within the 'Ammunition (except Small Arms) Manufacturing' category (NAICS 332993), by the Department of the Army has been substantial and consistent, reflecting ongoing operational needs and modernization efforts. Annual spending can fluctuate based on global deployments, inventory replenishment cycles, and the introduction of new weapon systems. Major procurement events, like the one detailed here, represent significant investments. Over the past decade, the Army has consistently allocated billions of dollars towards ammunition. Factors influencing these trends include geopolitical tensions, readiness goals, and budget allocations. Analyzing historical data from sources like USAspending.gov or agency budget reports would reveal specific trends, peak spending periods, and the relative significance of contracts like this one within the broader budgetary context.

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: 2

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