Army awards $189.5M contract for ammunition manufacturing, with General Dynamics as prime

Contract Overview

Contract Amount: $189,451,360 ($189.5M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-08-18

End Date: 2013-02-28

Contract Duration: 2,751 days

Daily Burn Rate: $68.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200511!001830!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0075 !A!N! !N! ! !20050818!20070630!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !11399 16TH COURT N - SUIT!SAINT PETERSBU !FL!33716!10675!007!50!BURLINGTON !CHITTENDEN !VERMONT !+000029999988!N!N!000000000000!AD24!RDTE/SERVICES-DEMO/VALID !S1 !SERVICES !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!J!2!004!B! !C!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!B!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $189.5 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: 200511!001830!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0075 !A!N! !N! ! !20050818!20070630!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !11399 16TH COURT N - SUIT!SAINT PETERSBU !FL!33716!10675!007!50!BURLINGTON !CHIT… Key points: 1. Contract value of $189.5M for ammunition manufacturing indicates significant investment in defense readiness. 2. The award to General Dynamics highlights the role of large defense contractors in supplying critical munitions. 3. A long contract duration of 2751 days suggests a need for sustained production and supply chain stability. 4. The 'Ammunition (except Small Arms) Manufacturing' classification points to a specific niche within the defense industrial base. 5. The contract's firm fixed price structure aims to control costs and provide predictability for the government. 6. The absence of small business set-asides suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: good

The contract value of $189.5 million for ammunition manufacturing appears reasonable given the scope and duration. Benchmarking against similar large-scale defense production contracts would provide further context, but the firm fixed-price nature suggests an effort to manage costs effectively. The specific nature of ammunition production often involves specialized facilities and processes, which can influence pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 4 bids suggests a competitive environment, which generally benefits the government by driving down prices and encouraging innovation. The specific number of bidders can influence the degree of price discovery and the likelihood of securing the best value.

Taxpayer Impact: Full and open competition for this significant ammunition contract is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government explores a wide range of potential suppliers.

Public Impact

The U.S. Army is the primary beneficiary, securing a critical supply of ammunition. Services delivered include the manufacturing of ammunition, essential for military operations and training. The contract's impact is primarily national, supporting defense readiness across the United States. Workforce implications include job creation and sustainment within the defense manufacturing sector, particularly at General Dynamics facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long-term reliance on a single large contractor for critical munitions.
Geographic concentration of production could pose supply chain risks.
Fluctuations in raw material costs could impact the contractor's profitability and potentially lead to future price adjustments if not adequately managed.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm fixed-price contract provides cost certainty for the government.
General Dynamics is a well-established defense contractor with a track record in ordnance production.
The contract duration indicates a stable, long-term supply relationship.

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, high barriers to entry due to specialized technology and security requirements, and significant consolidation among prime contractors. Spending in this area is driven by national security needs and geopolitical factors. Comparable spending benchmarks would typically involve other large-scale ammunition procurement contracts from various branches of the military.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, General Dynamics, is a large corporation. While there may be subcontracting opportunities for small businesses within the supply chain, the primary award does not directly benefit small businesses through a set-aside. The impact on the small business ecosystem is indirect, relying on the prime contractor's subcontracting practices.

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 requirements and delivery schedules. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Ordnance Programs
Defense Industrial Base Manufacturing
General Dynamics Defense Contracts

Risk Flags

Long contract duration may increase exposure to economic fluctuations.
Reliance on a single large prime contractor for critical supplies.
Potential for supply chain disruptions if raw material sources are concentrated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $189.5 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. 200511!001830!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0075 !A!N! !N! ! !20050818!20070630!194860813!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !11399 16TH COURT N - SUIT!SAINT PETERSBU !FL!33716!10675!007!50!BURLINGTON !CHITTENDEN !VERMONT !+000029999988!N!N!000000000000!AD24!RDTE/SERVICES-DEMO/VALID !S1 !SERVICES !000 !* !332993!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND 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 $189.5 million.

What is the period of performance?

Start: 2005-08-18. End: 2013-02-28.

What is the historical spending trend for ammunition manufacturing contracts by the Department of the Army?

Historical spending on ammunition manufacturing by the Department of the Army has fluctuated based on global security environments, operational tempo, and strategic modernization efforts. In the years leading up to and following the initial award of this contract (2005), the U.S. was engaged in significant military operations in Iraq and Afghanistan, which typically drives higher demand and spending on munitions. Post-2010, as these conflicts wound down, spending may have seen adjustments. Analyzing annual defense budgets and specific procurement line items for ammunition would reveal trends, showing periods of increased investment during active combat and potentially lower, more sustainment-focused spending during peacetime. The $189.5 million awarded here represents a substantial, but not unprecedented, single contract award within this broader spending context.

How does the per-unit cost of ammunition under this contract compare to industry benchmarks?

Determining the precise per-unit cost of ammunition under this contract is challenging without detailed breakdowns of the specific types and quantities of munitions produced. The contract value of $189.5 million over its duration (2005-2013) and the number of bids (4) provide some context. However, ammunition costs vary widely based on caliber, explosive fill, guidance systems, and production volume. General Dynamics is a major producer, and their efficiency could lead to competitive pricing. To benchmark effectively, one would need to compare the unit cost of specific ammunition types (e.g., artillery shells, mortar rounds) against publicly available data for similar government contracts or commercial sales, adjusted for inflation and quantity discounts. Without this granular data, a definitive per-unit cost comparison is not feasible.

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

General Dynamics, through its Ordnance and Tactical Systems (GD-OTS) division, has a long and extensive track record in manufacturing a wide array of munitions for the U.S. military and allied nations. They are a primary supplier for various types of ammunition, including artillery shells, mortar rounds, tank rounds, and small-caliber ammunition. Their history includes numerous large-scale contracts with the Department of Defense, often awarded through competitive processes. GD-OTS is known for its production capabilities, technological expertise in energetic materials, and its role in sustaining critical defense supply chains. This specific contract aligns well with their core competencies and historical performance in delivering large quantities of ammunition under firm fixed-price agreements.

What are the key performance indicators (KPIs) typically associated with ammunition manufacturing contracts?

Key performance indicators (KPIs) for ammunition manufacturing contracts typically revolve around production quality, delivery timeliness, cost control, and safety. Quality is paramount, measured by defect rates, adherence to strict specifications (e.g., explosive stability, dimensional accuracy), and performance in testing. Delivery timeliness is critical, tracked by on-time delivery rates against scheduled milestones to ensure the military's operational readiness. Cost control is monitored through adherence to the firm fixed-price budget, with variances analyzed. Safety KPIs include incident rates (e.g., lost time injuries, accidental detonations) and compliance with hazardous material handling protocols. Meeting these KPIs ensures the reliable supply of safe and effective munitions.

How has the market for ammunition manufacturing evolved since this contract was awarded?

The market for ammunition manufacturing has seen significant evolution since this contract's award in 2005, particularly influenced by geopolitical events and technological advancements. Initially, demand was high due to ongoing conflicts. Post-2010, there was a shift towards modernization and readiness for potential near-peer competition, leading to investments in advanced munitions and increased production capacity. Supply chain resilience has become a major focus, with efforts to onshore critical manufacturing capabilities and diversify sources. Technological advancements include smart munitions, precision-guided projectiles, and more efficient manufacturing processes. The industry continues to consolidate, with large players like General Dynamics playing a crucial role, while also facing pressures to increase output and innovate in response to global demand and evolving threats.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 11399 16TH COURT N - SUIT, SAINT PETERSBU, FL, 33716

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline