DoD awards $177.6M for non-standard ammunition, with General Dynamics securing the largest share

Contract Overview

Contract Amount: $177,609,134 ($177.6M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-25

End Date: 2021-11-30

Contract Duration: 4,449 days

Daily Burn Rate: $39.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACT IS FOR VARIOUS NON-STANDARD AMMUNITION FOR AFGHANISTAN AND US FORCES.

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $177.6 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: CONTRACT IS FOR VARIOUS NON-STANDARD AMMUNITION FOR AFGHANISTAN AND US FORCES. Key points: 1. Value for money appears reasonable given the long-term nature of the contract and the specialized nature of the ammunition. 2. Full and open competition was utilized, suggesting a competitive environment for pricing. 3. The contract duration of over 12 years indicates a long-term need for these specific munitions. 4. Performance is tied to delivery of critical ordnance for both U.S. forces and allies. 5. This contract falls within the Defense sector, specifically focusing on ammunition manufacturing. 6. The fixed-price contract type helps mitigate cost overrun risks for the government.

Value Assessment

Rating: good

The contract value of $177.6 million over nearly 12 years suggests a significant but potentially justified expenditure for specialized ammunition. Benchmarking against similar long-term, full-and-open competition contracts for niche ordnance would provide a clearer picture of value. The firm fixed-price structure is a positive indicator for cost control. However, without detailed cost breakdowns or comparisons to alternative suppliers, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The presence of two bids suggests a moderate level of competition for this specialized requirement. While more than one bidder is positive, the exact number and the nature of the competition (e.g., were there significant barriers to entry?) would further inform the assessment of price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces. The fact that this contract was competed suggests that the government likely received competitive pricing, although the exact savings are not quantifiable without more data.

Public Impact

U.S. and allied forces in Afghanistan and elsewhere benefit from the reliable supply of essential, non-standard ammunition. The contract ensures the availability of critical ordnance required for military operations and training. Geographic impact is global, supporting deployed forces wherever these specific munitions are needed. The contract supports jobs within the defense manufacturing sector, specifically at General Dynamics Ordnance and Tactical Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential obsolescence of technology if not managed proactively.
Dependence on a single primary contractor for specialized munitions could pose supply chain risks.
The 'non-standard' nature of the ammunition implies potential challenges in sourcing and standardization across different military branches or allies.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a robust process for selecting the most advantageous offer.
Long-term contract provides supply chain stability for critical defense materiel.

Sector Analysis

This contract operates within the defense manufacturing sector, specifically focusing on ammunition production. The market for specialized and non-standard ammunition is often characterized by a limited number of qualified manufacturers due to stringent quality and production requirements. Spending in this sub-sector is driven by military readiness needs and geopolitical demands. Comparable spending benchmarks would likely be found within other large-scale, long-term defense procurement contracts for munitions or weapon systems.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as indicated by 'sb': false. There is no explicit mention of small business set-asides. Subcontracting opportunities for small businesses may exist within the supply chain for General Dynamics, but this contract does not appear to be directly structured to promote small business prime contracting.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration and oversight. The firm fixed-price nature of the contract inherently includes accountability for the contractor to deliver goods at the agreed-upon price. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics and cost breakdowns are typically not publicly disclosed.

Related Government Programs

Department of Defense Ammunition Procurement
Foreign Military Sales
Ordnance Manufacturing Contracts
General Dynamics Defense Contracts

Risk Flags

Long contract duration may increase risk of technology obsolescence.
Dependence on specific ammunition types could create logistical challenges if not managed.
Potential for supply chain vulnerabilities for specialized components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $177.6 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. CONTRACT IS FOR VARIOUS NON-STANDARD AMMUNITION FOR AFGHANISTAN AND US FORCES.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $177.6 million.

What is the period of performance?

Start: 2009-09-25. End: 2021-11-30.

What is the historical spending trend for this specific type of non-standard ammunition by the Department of Defense?

Analyzing historical spending for this specific type of non-standard ammunition requires delving into detailed procurement databases beyond the provided summary. Typically, the Department of Defense procures ammunition through various contract vehicles, including indefinite-delivery/indefinite-quantity (IDIQ) contracts and specific fixed-price awards like this one. Spending trends are influenced by operational tempo, geopolitical events (such as the U.S. presence in Afghanistan during the contract period), and modernization efforts. A review of past contracts for similar ordnance, potentially from different manufacturers or for different theaters of operation, would reveal if this $177.6 million award represents a significant increase or decrease in overall spending for such items. Factors like the number of contracts awarded annually and their average values would provide context on the sustained demand for these specialized munitions over time.

How does the unit cost of this ammunition compare to similar items procured through other contracts or by allied nations?

A precise unit cost comparison is challenging without knowing the specific types and quantities of ammunition covered under this $177.6 million contract. However, the firm fixed-price nature suggests that the unit costs were negotiated and agreed upon at the outset. To benchmark, one would need to identify comparable ammunition types (e.g., by caliber, explosive fill, guidance systems) procured by the DoD or other allied nations around the same period. Publicly available data from defense spending reports, contract award databases (like FPDS or USAspending), and reports from international defense analysis groups can be consulted. Factors such as production volume, technological sophistication, and the competitive landscape at the time of procurement significantly influence unit costs. If this contract involved unique or highly specialized munitions with limited production sources, the unit costs might be expected to be higher than more common, mass-produced items.

What are the key performance indicators (KPIs) used to evaluate General Dynamics' performance under this contract?

While the specific KPIs are not detailed in the provided summary, defense contracts of this magnitude typically include stringent performance metrics. These often revolve around on-time delivery schedules, quality control (defect rates, adherence to specifications), and compliance with technical requirements. For ammunition, critical performance indicators would likely include reliability in various environmental conditions, accuracy, and safety standards. The contract may also stipulate requirements for production capacity and surge capability. Performance evaluations are usually conducted by the contracting officer's representative (COR) or the Defense Contract Management Agency (DCMA), who monitor adherence to the contract terms and assess the contractor's ability to meet delivery milestones and quality standards. Failure to meet KPIs could result in penalties, reduced future contract awards, or termination.

What risks were identified during the solicitation process, and how were they mitigated?

The provided data does not detail the specific risks identified during the solicitation process for this contract. However, common risks associated with large defense procurement contracts include supply chain disruptions, technical performance issues, cost overruns (though mitigated by fixed-price), schedule delays, and contractor performance failures. Given the nature of ammunition, risks related to manufacturing quality, safety, and shelf-life stability are also paramount. Mitigation strategies typically employed during solicitation involve thorough vetting of potential bidders' technical capabilities, financial stability, and past performance. Contract terms themselves, such as firm fixed-price structures, phased deliveries with payment milestones, and performance bonds, serve as risk mitigation tools. The use of full and open competition also aims to mitigate risks by ensuring a broad base of potential suppliers and fostering competitive pricing.

What is the strategic importance of 'various non-standard ammunition' for U.S. forces and allies in Afghanistan during the contract period?

During the period of performance (2009-2021), U.S. forces and allies operating in Afghanistan faced complex counter-insurgency and stability operations. 'Various non-standard ammunition' likely refers to munitions not typically found in the standard U.S. inventory but required for specific weapon systems used by Afghan forces or for specialized operational needs. This could include ammunition for Soviet-era or other foreign-origin weapons that were prevalent in the region, or specialized rounds for unique tactical situations. Ensuring a reliable supply of these specific munitions was strategically vital for maintaining operational effectiveness, supporting partner forces, and achieving mission objectives. The 'non-standard' aspect highlights the need for tailored logistical support to meet the diverse and evolving requirements on the ground, preventing critical capability gaps.

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: W52P1J09R0093

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 100 CARILLON PKWY, SAINT PETERSBURG, FL, 33716

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

Financial Breakdown

Contract Ceiling: $177,609,134

Exercised Options: $177,609,134

Current Obligation: $177,609,134

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline