Army awards $175M+ contract for ammunition manufacturing to General Dynamics

Contract Overview

Contract Amount: $17,514,504 ($17.5M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-06-28

End Date: 2011-09-30

Contract Duration: 2,285 days

Daily Burn Rate: $7.7K/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!001420!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0054 !A!N! !N! ! !20050628!20060531!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000009240296!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!J!2!002!N!3A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 200509!001420!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0054 !A!N! !N! ! !20050628!20060531!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILL… Key points: 1. Contract awarded for ammunition manufacturing, indicating a need for sustained supply. 2. General Dynamics secured the contract, suggesting established capabilities in defense manufacturing. 3. The contract duration of over 2000 days points to a long-term strategic requirement. 4. Fixed-price contract type suggests predictable costs for the government. 5. The award was made under full and open competition, implying a competitive bidding process. 6. The contract is for ammunition, a critical component of military readiness.

Value Assessment

Rating: good

The contract value of over $175 million for ammunition manufacturing appears reasonable given the long duration and the nature of defense procurement. Benchmarking against similar large-scale ammunition production contracts would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost predictability for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that multiple bidders were likely considered, but specific sources may have been excluded based on pre-qualification or other criteria. The presence of competition generally drives better pricing and value.

Taxpayer Impact: This competitive approach is beneficial for taxpayers as it encourages multiple companies to offer their best prices and capabilities, potentially leading to cost savings and higher quality products.

Public Impact

The U.S. Army benefits from a secured supply of ammunition, crucial for training and operational readiness. This contract supports the manufacturing of ammunition, essential for national defense. The contract's impact is primarily within the defense industrial base, potentially supporting jobs in Illinois. Workforce implications may include skilled manufacturing labor in the ammunition production sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if General Dynamics faces production issues.
Reliance on a single contractor for a critical defense commodity could pose a risk.
Geopolitical events could impact the demand or supply of raw materials for ammunition.

Positive Signals

General Dynamics has a track record in defense manufacturing, suggesting reliability.
The firm fixed-price contract provides cost certainty for the government.
Long contract duration indicates a stable, long-term need being met.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for defense-related manufacturing is characterized by long-term government contracts, stringent quality requirements, and significant barriers to entry. Comparable spending benchmarks would involve looking at other large-scale ammunition procurement contracts awarded by the Department of Defense.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a large defense contractor, and the direct impact on the small business ecosystem may be limited unless General Dynamics actively engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases, though detailed operational oversight specifics are usually internal.

Related Government Programs

Department of Defense Ammunition Procurement
Army Industrial Operations
Defense Manufacturing Contracts
Ordnance and Munitions Manufacturing

Risk Flags

Long-term contract duration may increase risk of cost escalation or obsolescence.
Reliance on a single contractor for critical munitions.
Potential for supply chain disruptions impacting production timelines.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 200509!001420!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0054 !A!N! !N! ! !20050628!20060531!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000009240296!N!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 GENERAL DYNAMICS ORDNANCE & 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 $17.5 million.

What is the period of performance?

Start: 2005-06-28. End: 2011-09-30.

What is General Dynamics' track record with similar ammunition contracts?

General Dynamics, through its Ordnance and Tactical Systems division, has a long history of producing a wide range of munitions for the U.S. military and allied nations. They are known for manufacturing artillery shells, mortar rounds, tank ammunition, and other ordnance. Their track record typically involves meeting stringent military specifications and delivery schedules. While specific details of past performance on contracts of this exact scale and duration are not provided in this data snippet, the company's established presence in the defense industry suggests a significant level of experience and capability in fulfilling such requirements. Past performance reviews and contract histories would be necessary for a comprehensive assessment.

How does the awarded price compare to market rates for ammunition manufacturing?

Determining the precise market rate for ammunition manufacturing is complex due to the specialized nature of the products, varying quantities, and fluctuating raw material costs. The awarded value of over $175 million for a contract spanning approximately 8 years (from initial award to final completion date) suggests an average annual value of roughly $22 million. Without specific details on the types and quantities of ammunition produced under this contract, a direct comparison to market rates is challenging. However, the 'full and open competition' aspect implies that the price was vetted against multiple offers, suggesting it is likely competitive within the defense procurement landscape. Industry reports and analyses of similar large-scale defense contracts would be needed for a more robust benchmark.

What are the primary risks associated with this contract?

Key risks associated with this ammunition manufacturing contract include potential supply chain vulnerabilities for critical raw materials, the possibility of production delays impacting military readiness, and the long-term reliance on a single contractor for a vital defense commodity. Geopolitical instability could also affect the cost and availability of necessary components. Furthermore, technological obsolescence in ammunition design or manufacturing processes could pose a risk if not managed proactively. The government's mitigation strategies would likely involve robust oversight, contingency planning, and potentially diversifying future supply sources.

How effective is the Army's oversight of ammunition production contracts?

The effectiveness of the Army's oversight for ammunition production contracts is generally considered robust, given the critical nature of these supplies. Oversight typically involves quality assurance representatives embedded at the manufacturing facilities, regular performance reviews, and adherence to strict military specifications. The Army employs program managers and contracting officers to monitor progress, ensure compliance, and manage any deviations. While specific effectiveness metrics for this particular contract are not available, the Army's established processes aim to ensure that production meets required standards and timelines. Inspector General reports and program audits can provide further insights into oversight effectiveness.

What are the historical spending patterns for ammunition by the Department of the Army?

Historical spending patterns for ammunition by the Department of the Army are substantial and fluctuate based on global security environments, operational tempo, and modernization efforts. The Army consistently allocates significant portions of its budget to ordnance and munitions procurement to maintain readiness for training and combat. Over the years, spending has ranged from billions to tens of billions of dollars annually, depending on major conflicts or strategic shifts. Contracts like this one, awarded over extended periods, represent a portion of that ongoing investment. Analyzing historical budget requests and appropriations data for the Army's weapons systems and procurement accounts would reveal detailed spending trends.

What is the strategic importance of this contract for the U.S. Army?

This contract holds significant strategic importance for the U.S. Army as it ensures a consistent and reliable supply of essential ammunition. Ammunition is a consumable but critical resource for training, power projection, and sustained combat operations. By securing a long-term manufacturing agreement with a capable contractor like General Dynamics, the Army reinforces its logistical capabilities and maintains a baseline level of domestic production capacity for key munitions. This contract directly supports the Army's readiness posture and its ability to meet national defense objectives in various 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: ONLY ONE SOURCE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 8820 ROUTE 148, MARION, IL, 12

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline