Department of the Army awards $32.8M contract for nonstandard ammunition to GSS, highlighting a niche defense supply chain

Contract Overview

Contract Amount: $32,853,518 ($32.9M)

Contractor: GSS

Awarding Agency: Department of Defense

Start Date: 2007-08-31

End Date: 2009-01-30

Contract Duration: 518 days

Daily Burn Rate: $63.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMS NONSTANDARD AMMO FOR THE COUNTRY OF IRAQ

Place of Performance

Location: LAS VEGAS, CLARK County, NEVADA, 89119

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to GSS for work described as: FMS NONSTANDARD AMMO FOR THE COUNTRY OF IRAQ Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $32.8 million falls within a moderate spending range for specialized defense articles. 3. Fixed-price contract type indicates that the contractor bears the risk of cost overruns. 4. The duration of 518 days suggests a medium-term supply requirement. 5. The specific nature of 'nonstandard ammunition' points to specialized military needs beyond typical small arms. 6. Awarded by the Department of the Army, indicating a focus on ground force requirements. 7. The contractor, GSS, is a key player in this specialized ammunition market.

Value Assessment

Rating: good

The contract value of $32.8 million for specialized ammunition appears reasonable given the niche nature of the product. Benchmarking against similar contracts for nonstandard munitions is challenging due to limited public data on such specialized items. However, the fixed-price nature of the award suggests a degree of cost control and risk transfer to the contractor. The number of bidders (10) also implies a healthy level of competition that likely contributed to a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Ten bids were received, suggesting a robust competitive environment for this specialized defense requirement. The open competition likely drove price discovery and ensured that the Department of the Army received competitive offers.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is expected to yield a more favorable price for the ammunition compared to a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the U.S. Army's ground forces requiring specialized ammunition for operations. The contract delivers essential nonstandard ammunition, crucial for specific mission sets and equipment. The geographic impact is primarily within the defense supply chain, with potential downstream effects on military readiness. Workforce implications may include specialized manufacturing and logistics roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for reliance on a limited number of specialized manufacturers for nonstandard munitions.
Geopolitical factors could impact the supply chain for specific types of ammunition.
The 'nonstandard' nature of the ammunition may require specialized handling and storage, increasing logistical complexity.

Positive Signals

Awarded through full and open competition, indicating a healthy market and competitive pricing.
Fixed-price contract type shifts cost overrun risk to the contractor.
The Department of the Army's clear requirement for this specific ammunition ensures its utility.

Sector Analysis

The defense sector, particularly ammunition manufacturing, is characterized by specialized capabilities and stringent quality requirements. This contract falls within the 'Ammunition (except Small Arms) Manufacturing' category, representing a segment of the broader defense industrial base. Spending in this area is driven by military readiness needs and the development of advanced weaponry. Comparable spending benchmarks are difficult to establish precisely due to the 'nonstandard' nature of the ammunition, which implies unique specifications and potentially higher unit costs than mass-produced items.

Small Business Impact

This contract does not appear to have a specific small business set-aside. The award to GSS, a likely larger entity in this specialized field, suggests that small businesses may not have been the primary focus for this particular requirement, or they may participate as subcontractors. Further analysis would be needed to determine subcontracting opportunities for small businesses within the execution of this contract.

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 type, which holds the contractor responsible for delivery and cost. Transparency is facilitated by the contract award being made under full and open competition, with the details of the award being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales (FMS)
Department of Defense Ammunition Procurement
Specialized Munitions Manufacturing
Defense Logistics Agency (DLA) Support

Risk Flags

Supply Chain Risk
Foreign Military Sales Complexity
Specialized Manufacturing Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to GSS. FMS NONSTANDARD AMMO FOR THE COUNTRY OF IRAQ

Who is the contractor on this award?

The obligated recipient is GSS.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $32.9 million.

What is the period of performance?

Start: 2007-08-31. End: 2009-01-30.

What is the specific type of 'nonstandard ammunition' being procured and why is it considered nonstandard?

The term 'nonstandard ammunition' typically refers to munitions that do not conform to the most common NATO or U.S. military specifications. This could include ammunition for older weapon systems, foreign-designed weapons, or specialized applications requiring unique calibers, propellants, or fusing mechanisms. For this contract, the specific type of ammunition is not detailed in the provided data, but its 'nonstandard' designation implies it serves a particular niche requirement for the country of Iraq under a Foreign Military Sales (FMS) arrangement. The reason for it being nonstandard is likely due to the specific equipment operated by the Iraqi forces or unique operational environments they face, necessitating ammunition that deviates from standard military inventories.

How does the unit cost of this nonstandard ammunition compare to standard ammunition of a similar caliber or function?

Direct comparison of unit costs between 'nonstandard' and 'standard' ammunition is inherently difficult without knowing the exact specifications of the item procured. Generally, nonstandard or specialized munitions tend to have higher unit costs than their standard counterparts. This is due to several factors: lower production volumes (less economy of scale), more complex or unique manufacturing processes, specialized raw materials, and potentially higher research and development costs. The fact that this contract received 10 bids suggests that while specialized, there is a competitive market, which may have helped moderate the price. However, it is reasonable to assume the unit cost is likely higher than widely produced standard ammunition.

What are the potential risks associated with procuring nonstandard ammunition, particularly for a foreign military sale?

Procuring nonstandard ammunition for a foreign military sale (FMS) carries several potential risks. Firstly, supply chain reliability can be a concern, as fewer manufacturers may produce these specialized items, making them more susceptible to disruptions. Secondly, interoperability and sustainment issues could arise if the ammunition is not fully compatible with the intended weapon systems or if follow-on support is limited. Thirdly, the 'nonstandard' nature might imply older technology or less stringent safety/performance standards compared to current military specifications, potentially impacting operational effectiveness or safety. Finally, geopolitical factors and the political stability of the recipient nation can introduce risks related to delivery, end-use, and future procurement needs.

What is the track record of the contractor, GSS, in supplying defense articles, particularly ammunition?

The provided data indicates GSS (likely a contractor name) was awarded this contract. Without further external data, their specific track record in supplying defense articles, especially ammunition, cannot be definitively assessed. However, being a recipient of a competitive bid for a defense contract suggests they possess the necessary capabilities and certifications to operate within the defense industrial base. To fully assess their track record, one would need to examine past performance reviews, other contracts awarded to GSS, and their history of meeting delivery schedules and quality standards for similar defense products.

How does the total contract value of $32.8 million fit within the broader context of U.S. defense spending on ammunition?

The $32.8 million contract value represents a moderate investment within the vast landscape of U.S. defense spending on ammunition. The U.S. military procures billions of dollars worth of ammunition annually, encompassing everything from small arms rounds to large-caliber artillery shells and missiles. This specific contract focuses on 'nonstandard ammunition' for a foreign military sale, indicating a specialized segment rather than mass procurement for U.S. forces. While significant for the specific requirement and the contractor, it is a relatively small fraction of the overall annual defense budget allocated to munitions, highlighting the diverse and extensive nature of military supply chains.

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: W52P1J07R0104

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7235 BERMUDA RD STE E, LAS VEGAS, NV, 90

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $32,853,518

Exercised Options: $32,853,518

Current Obligation: $32,853,518

Timeline