Army awards $20.8M contract for ammunition manufacturing to General Dynamics

Contract Overview

Contract Amount: $20,800,218 ($20.8M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-08-25

End Date: 2008-05-30

Contract Duration: 644 days

Daily Burn Rate: $32.3K/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: 200611!001870!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J06C0050 !A!N! !N! ! !20060825!20080229!006317473!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000020793714!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !332993!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!002!N!3A!Z!N!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 $20.8 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 200611!001870!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J06C0050 !A!N! !N! ! !20060825!20080229!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 services. 2. General Dynamics secured the contract, indicating a strong position in defense manufacturing. 3. The contract duration of 644 days suggests a medium-term need for these services. 4. The award was made under full and open competition after exclusion of sources, implying a structured procurement process. 5. The fixed-price contract type suggests predictable costs for the government. 6. The contract is for ammunition, through 30 mm, a critical component for military operations.

Value Assessment

Rating: good

The contract value of $20.8 million for approximately two years of service appears reasonable for specialized ammunition manufacturing. Benchmarking against similar contracts for ammunition production is challenging without more specific details on the exact types and quantities of ammunition. However, the fixed-price nature of the contract provides cost certainty for the Department of the Army.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be open, certain sources may have been excluded based on specific criteria. The number of bidders is not explicitly stated, but the 'limited' competition level suggests that the field of potential contractors was narrowed down, potentially impacting the breadth of price discovery.

Taxpayer Impact: This procurement method, while allowing for competition, may not have yielded the absolute lowest price achievable through a completely unrestricted open competition. Taxpayers benefit from a structured process that aims for competitive pricing while ensuring specific requirements are met.

Public Impact

The U.S. Army is the primary beneficiary, receiving critical ammunition supplies. Services delivered include the manufacturing of ammunition, through 30 mm. The geographic impact is primarily within Illinois, where General Dynamics' facility is located. This contract supports jobs within the defense manufacturing sector, specifically at General Dynamics' Marion, Illinois facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition to reduce price discovery.
Reliance on a single contractor for a critical defense component.

Positive Signals

Awarded under a structured competition process.
Fixed-price contract provides cost predictability.
Contractor is a known entity in defense manufacturing.

Sector Analysis

This contract falls within the Ammunition (except Small Arms) Manufacturing sector (NAICS 332993). This sector is crucial for national defense, supplying essential munitions to military branches. The market size for defense manufacturing is substantial, with significant government spending allocated to procurement of weapons and ammunition. This contract represents a portion of the Department of Defense's overall spending on ordnance.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large defense contractor like General Dynamics suggests that the primary focus was on established capabilities rather than fostering small business participation in this specific instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance Manufacturing Contracts
U.S. Army Industrial Operations
Defense Manufacturing Sector Spending

Risk Flags

Limited competition may impact price optimization.
Reliance on a single contractor for critical supplies.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.8 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 200611!001870!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J06C0050 !A!N! !N! ! !20060825!20080229!006317473!194860813!001381284!N!GENERAL DYNAMICS ORDNANCE AND !8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000020793714!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !NOT DISCERNABLE !332993!E! !3! ! ! ! ! !999

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 $20.8 million.

What is the period of performance?

Start: 2006-08-25. End: 2008-05-30.

What is the track record of General Dynamics Ordnance and Tactical Systems in fulfilling similar ammunition manufacturing contracts for the U.S. Army?

General Dynamics Ordnance and Tactical Systems (GD-OTS) is a well-established entity within the defense industry, known for its extensive experience in manufacturing a wide range of ordnance, including ammunition. They have a history of supplying various calibers and types of munitions to the U.S. military and allied nations. While specific details of past performance on contracts of identical scope and value are not provided in this data snippet, GD-OTS's long-standing presence and broad capabilities suggest a strong track record. Their involvement in numerous defense programs indicates a capacity to meet stringent military specifications and delivery schedules. Further analysis would require examining their performance history on specific, comparable contracts, including any past issues or commendations.

How does the awarded price of $20.8 million compare to market rates for similar ammunition manufacturing services?

Directly comparing the $20.8 million award to precise market rates for ammunition manufacturing is complex without knowing the exact specifications, quantities, and types of ammunition produced under this contract. Ammunition production costs vary significantly based on caliber, complexity, materials, and production volume. However, the contract's firm-fixed-price nature suggests that the government and General Dynamics agreed on a price that was deemed fair and reasonable at the time of award, considering the anticipated costs and risks. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates some level of competitive bidding, which typically helps in achieving market-aligned pricing. To provide a more definitive comparison, one would need access to data on recent contracts for similar ammunition types and quantities awarded to other manufacturers or even to General Dynamics itself.

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

Key risks associated with this ammunition manufacturing contract include potential production delays, quality control issues, and fluctuations in raw material costs (though mitigated by the fixed-price nature). Production delays could impact military readiness, while quality issues could lead to mission failure or safety hazards. Mitigation strategies likely involve stringent quality assurance protocols mandated by the Army, regular performance reviews, and potentially liquidated damages clauses for late delivery. The fixed-price contract shifts some cost-overrun risk to the contractor, incentivizing efficient production. Furthermore, the selection of a reputable contractor like General Dynamics, with a known history in defense manufacturing, inherently reduces some performance and quality risks.

What is the expected effectiveness of this contract in meeting the U.S. Army's ammunition needs?

The effectiveness of this contract hinges on General Dynamics' ability to consistently deliver high-quality ammunition that meets all specified military requirements within the contracted timeframe. Given that the contract is for a critical component like ammunition, its successful execution is vital for supporting Army operations and training. The fixed-price structure and the contractor's established expertise suggest a high likelihood of meeting these needs. However, effectiveness also depends on the accuracy of the initial demand forecasting by the Army and the flexibility of the contract to adapt to potential changes in operational requirements or threat landscapes during the contract period.

What have been the historical spending patterns for ammunition manufacturing by the Department of the Army in recent years?

Historical spending patterns for ammunition manufacturing by the Department of the Army are substantial and fluctuate based on global security environments, ongoing conflicts, and modernization efforts. The Army consistently procures large volumes of ammunition across various calibers and types, from small arms to artillery and beyond. Annual spending can range from billions to tens of billions of dollars, depending on strategic priorities and budget allocations. This $20.8 million contract represents a relatively small portion of the Army's overall annual ammunition budget, likely fulfilling a specific need for a particular type of ammunition or supporting a specific program. Analyzing broader spending trends would involve examining multi-year procurement data and major contract awards within the ordnance and ammunition sectors.

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

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