DoD's $18.5M contract for ammunition manufacturing awarded to Alliant Techsystems Operations LLC

Contract Overview

Contract Amount: $18,513,523 ($18.5M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2009-08-28

End Date: 2013-12-31

Contract Duration: 1,586 days

Daily Burn Rate: $11.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: EPA FOR ZINC

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.5 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: EPA FOR ZINC Key points: 1. Value for money appears fair given the firm-fixed-price contract type, which shifts risk to the contractor. 2. Competition dynamics indicate a full and open process, suggesting a competitive bidding environment. 3. Risk indicators are moderate, with a fixed-price contract type mitigating cost overrun risks. 4. Performance context is within ammunition manufacturing, a critical defense supply chain component. 5. Sector positioning is within the defense industrial base, supporting military readiness.

Value Assessment

Rating: fair

The contract value of $18.5 million for ammunition manufacturing is difficult to benchmark without specific unit details. However, the firm-fixed-price (FFP) contract type is generally favorable for the government as it caps the contractor's profit and transfers cost overrun risk. Compared to similar large-scale ammunition procurements, the pricing would need detailed analysis of the specific types and quantities of ammunition. The absence of detailed cost breakdowns makes a precise value-for-money assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This suggests that while the competition was intended to be open, certain sources were excluded, potentially limiting the pool of bidders. The number of bidders is not explicitly stated, but the 'limited' competition level might imply fewer than ideal participants, potentially impacting price discovery and the government's ability to secure the lowest possible price.

Taxpayer Impact: A limited competition may result in higher prices for taxpayers compared to a truly full and open competition with maximum bidder participation. This could mean less competitive pressure driving down costs.

Public Impact

The primary beneficiary is the Department of Defense, ensuring a supply of ammunition for military operations. Services delivered include the manufacturing of ammunition, crucial for national defense. Geographic impact is centered in West Virginia, where the contractor Alliant Techsystems Operations LLC is located. Workforce implications include job creation and maintenance within the defense manufacturing sector in West Virginia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to suboptimal pricing for taxpayers.
Exclusion of sources, even if justified, reduces the potential for broader market engagement.
Lack of detailed cost breakdowns hinders granular value assessment.

Positive Signals

Firm-fixed-price contract type effectively transfers cost overrun risk to the contractor.
Award to an established entity like Alliant Techsystems suggests a degree of reliability.
The contract supports critical defense supply chains.

Sector Analysis

The defense industrial base, specifically the ammunition manufacturing sector, is a critical component of national security. This contract falls within the broader manufacturing industry, with a focus on defense-related goods. The market for ammunition is characterized by high barriers to entry due to specialized knowledge, capital investment, and stringent quality control requirements. Spending in this sector is driven by military readiness needs and geopolitical factors. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). Therefore, its direct impact on small business participation is likely minimal unless Alliant Techsystems Operations LLC engages in subcontracting with small businesses. The analysis of subcontracting plans and actual performance would be necessary to determine the extent of small business involvement and its impact on the small business ecosystem.

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, requiring delivery of specified goods. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. The contract duration and value suggest regular reporting and oversight mechanisms would be in place.

Related Government Programs

Department of Defense Ammunition Procurement
Defense Industrial Base Manufacturing Contracts
Army Ammunition Production
Small Arms Ammunition Manufacturing (related category)

Risk Flags

Limited Competition
Potential for Price Escalation
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. EPA FOR ZINC

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.5 million.

What is the period of performance?

Start: 2009-08-28. End: 2013-12-31.

What is the specific type and quantity of ammunition being manufactured under this contract?

The provided data indicates the contract is for 'Ammunition (except Small Arms) Manufacturing' with the Product and Service Code (PSC) '332993'. However, the specific types and quantities of ammunition are not detailed in the summary data. This level of granularity is typically found in the contract's statement of work or line item details. Understanding the specific items is crucial for a precise assessment of value, risk, and performance, as different types of ammunition have vastly different manufacturing complexities, material costs, and unit prices.

How does the unit cost of this ammunition compare to similar contracts or market rates?

Without specific unit cost data or detailed breakdowns of the ammunition types and quantities, a direct comparison of unit costs is not possible. The total contract value of $18.5 million spread over its duration (2009-2013) and the number of units produced would be needed. Benchmarking would require access to historical pricing data for comparable ammunition items procured by the DoD or other government agencies, as well as commercial market rates if available. The firm-fixed-price nature suggests the price was agreed upon upfront, but its competitiveness relies on the negotiation and bidding process.

What is Alliant Techsystems Operations LLC's track record in fulfilling defense manufacturing contracts, particularly for ammunition?

Alliant Techsystems Operations LLC (now part of Northrop Grumman) has a significant history and established presence in defense manufacturing, including ammunition production. They have been a major supplier to the U.S. military for decades. Their track record generally includes the capability to produce large quantities of munitions and meet stringent military specifications. However, like any large contractor, specific contract performance can vary. A deeper dive into their past performance ratings, any contract disputes, or quality issues related to similar ammunition contracts would provide a more comprehensive view of their reliability for this specific award.

What were the primary factors driving the 'exclusion of sources' in this full and open competition?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that while the competition was intended to be open to all responsible sources, certain entities were specifically excluded from bidding. The reasons for exclusion are typically documented in the contract file and can include factors such as: failure to meet minimum technical requirements in a prior solicitation, lack of necessary security clearances, inability to meet production capacity demands, or specific government mandates. Without access to the contract's justification for exclusion, the precise reasons remain unknown, but it suggests a deliberate narrowing of the potential bidder pool for specific, documented reasons.

How has spending on ammunition manufacturing by the Department of the Army trended over the period of this contract and subsequently?

Spending on ammunition manufacturing by the Department of the Army can fluctuate significantly based on operational tempo, strategic priorities, and inventory levels. During the period of this contract (2009-2013), the U.S. was involved in ongoing conflicts (e.g., Iraq, Afghanistan), which likely drove demand for various types of ammunition. Post-2013, spending patterns may have shifted due to drawdowns in those conflicts and evolving geopolitical threats. Analyzing historical DoD spending reports and budget justifications for the relevant fiscal years would reveal trends in ammunition procurement, including the types and quantities purchased, and overall investment in the defense industrial base for munitions.

What are the potential risks associated with relying on a single primary contractor for a critical defense supply like ammunition?

Relying heavily on a single primary contractor, even with competition in the award process, carries inherent risks. These include: supply chain disruptions (e.g., due to natural disasters, labor issues, or geopolitical events affecting the contractor's operations), potential for price increases in subsequent contracts if competition diminishes, reduced innovation if the contractor faces less pressure, and vulnerability if the contractor experiences financial distress or strategic shifts. For critical defense supplies like ammunition, these risks can impact military readiness. Mitigation strategies often involve maintaining multiple qualified suppliers, strategic stockpiling, and robust oversight.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52P1J09R0054

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 210 STATE ROUTE 956, KEYSER, WV, 02

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

Financial Breakdown

Contract Ceiling: $18,513,523

Exercised Options: $18,513,523

Current Obligation: $18,513,523

Contract Characteristics

Cost or Pricing Data: NO

Timeline