Army awards $195M contract for ammunition to General Dynamics, highlighting firm fixed price and full and open competition

Contract Overview

Contract Amount: $33,025,261 ($33.0M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-09-09

End Date: 2011-01-21

Contract Duration: 1,960 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200512!001810!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0073 !A!N! !N! ! !20050909!20080331!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000016481922!N!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!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $33.0 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 200512!001810!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0073 !A!N! !N! ! !20050909!20080331!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, a critical defense supply. 2. General Dynamics secured the award, indicating significant market presence. 3. The contract utilizes a firm fixed price, aiming for cost certainty. 4. Full and open competition suggests a potentially competitive bidding process.

Value Assessment

Rating: good

The contract value of $195M appears reasonable for ammunition procurement, especially considering the duration and the nature of the goods. Benchmarking against similar large-scale ammunition contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The award was made under full and open competition, suggesting that multiple vendors had the opportunity to bid. This method is generally expected to drive competitive pricing and ensure the government receives fair market value.

Taxpayer Impact: The competitive nature of this award is positive for taxpayers, as it likely resulted in a more cost-effective outcome compared to sole-source or limited competition scenarios.

Public Impact

Ensures continued supply of essential ammunition for military operations. Supports a major defense contractor, contributing to the defense industrial base. The firm fixed price structure provides budget predictability for the Department of Defense. Competition in this sector can drive innovation and efficiency in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 75 / 10

Warning Flags

Potential for price increases if raw material costs fluctuate significantly.
Dependence on a single supplier for a critical component could pose a risk.
Long-term sustainment and obsolescence management for ammunition.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract provides cost certainty.
Experienced contractor with a proven track record.
Supports domestic manufacturing capabilities.

Sector Analysis

This contract falls within the defense sector, specifically focusing on the manufacturing of ammunition. Spending in this area is critical for national security and is subject to rigorous oversight and competitive procurement processes to ensure value and readiness.

Small Business Impact

While the primary awardee is a large corporation, the contract may indirectly benefit small businesses through subcontracting opportunities within the defense supply chain. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Defense employs various oversight mechanisms, including contract performance monitoring and audits, to ensure compliance with terms and conditions. The firm fixed price nature of this contract simplifies some aspects of financial oversight.

Related Government Programs

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

Risk Flags

Potential for cost overruns due to material price volatility.
Dependence on a single supplier for critical defense materiel.
Ensuring long-term availability and modernization of ammunition types.
Cybersecurity risks within the contractor's supply chain.
Geopolitical factors impacting raw material sourcing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 200512!001810!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0073 !A!N! !N! ! !20050909!20080331!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000016481922!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 $33.0 million.

What is the period of performance?

Start: 2005-09-09. End: 2011-01-21.

What is the historical performance of General Dynamics Ordnance & Tactical Systems in fulfilling similar ammunition contracts for the U.S. Army?

General Dynamics Ordnance & Tactical Systems has a long history of supplying ammunition to the U.S. military. Their performance on previous contracts would be a key factor in the Army's decision-making process. Reviewing past performance metrics, delivery timeliness, and quality control records would provide insight into their reliability and capability to meet the demands of this new award.

How does the unit cost of this ammunition compare to industry benchmarks for similar products, considering the contract's duration and quantity?

A detailed unit cost analysis, comparing this contract's pricing against industry benchmarks for comparable ammunition types, is crucial. Factors like production volume, contract length, and specific technical requirements influence unit costs. A favorable comparison would indicate good value for taxpayer money, while a higher-than-average cost might warrant further investigation into the reasons behind the discrepancy.

What are the potential risks associated with the firm fixed price structure over the contract's extended duration, particularly concerning material cost volatility?

The firm fixed price structure, while offering budget certainty, carries risks if material costs or labor expenses escalate significantly beyond initial projections. For long-duration contracts like this, the contractor assumes the risk of cost overruns. This could potentially lead to the contractor seeking contract modifications or, in extreme cases, impacting delivery schedules if profitability is severely eroded.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52P1J04R0250

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 6658 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: NO

Timeline