DoD's $296M Grenade System Contract with AMTEC Corporation: A Decade of Ammunition Procurement
Contract Overview
Contract Amount: $296,030,663 ($296.0M)
Contractor: Amtec Corporation
Awarding Agency: Department of Defense
Start Date: 2010-02-18
End Date: 2018-12-31
Contract Duration: 3,238 days
Daily Burn Rate: $91.4K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: 40MM GRENADE FAMILY SYSTEMS FOR FY10-14.
Place of Performance
Location: JANESVILLE, ROCK County, WISCONSIN, 53546
Plain-Language Summary
Department of Defense obligated $296.0 million to AMTEC CORPORATION for work described as: 40MM GRENADE FAMILY SYSTEMS FOR FY10-14. Key points: 1. The contract spans five fiscal years (FY10-14) with a total value of $296 million. 2. AMTEC Corporation is the sole awardee, raising questions about competition. 3. The contract type, Fixed Price with Economic Price Adjustment, introduces potential cost escalation risks. 4. Spending in the Ammunition Manufacturing sector is significant, but specific benchmarks for grenade systems are not readily available.
Value Assessment
Rating: fair
The total award of $296 million over a decade suggests a substantial but potentially variable annual spend. Without specific per-unit cost data or comparison to similar contracts, assessing value for money is difficult. The economic price adjustment clause adds uncertainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition scenario. This method may not have yielded the most competitive pricing, as alternative sources were excluded.
Taxpayer Impact: The pricing structure with economic adjustments could lead to higher taxpayer costs if raw material prices increase significantly over the contract's long duration.
Public Impact
Ensures a consistent supply of critical grenade systems for military operations. Long-term contract may provide stability for the awarded manufacturer. Potential for price increases due to economic adjustments impacts budget predictability. Lack of broad competition limits opportunities for other manufacturers and potentially higher value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Economic price adjustment clause
- Long contract duration (2010-2018)
Positive Signals
- Consistent supply of essential munitions
- Award to a specific manufacturer
Sector Analysis
The Department of Defense is a major consumer of ammunition, with significant annual spending. Benchmarks for grenade systems specifically are not publicly detailed, but overall ammunition procurement represents a substantial portion of defense budgets.
Small Business Impact
The contract was awarded to AMTEC CORPORATION, and there is no indication that small businesses were involved as subcontractors or partners in this specific award. The 'sb' field is false.
Oversight & Accountability
The contract's long duration and limited competition warrant oversight to ensure fair pricing and performance. Regular reviews of the economic price adjustment mechanism are crucial for accountability.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to economic price adjustments.
- Limited competition may have resulted in suboptimal pricing.
- Long contract duration increases exposure to market and economic volatility.
- Lack of transparency regarding source exclusion rationale.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, wi, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $296.0 million to AMTEC CORPORATION. 40MM GRENADE FAMILY SYSTEMS FOR FY10-14.
Who is the contractor on this award?
The obligated recipient is AMTEC CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $296.0 million.
What is the period of performance?
Start: 2010-02-18. End: 2018-12-31.
What was the rationale for excluding other sources during the competition phase for this grenade system contract?
The exclusion of sources suggests a specific technical requirement, proprietary technology, or a previous determination that only AMTEC Corporation could meet the needs. Understanding the justification is key to assessing if the limited competition was indeed necessary and resulted in the best possible outcome for the government.
How have the economic price adjustments impacted the total cost of the contract over its lifespan?
The economic price adjustment (EPA) clause allows for changes in contract price based on fluctuations in specified economic factors, such as labor or material costs. Without detailed financial data, it's impossible to quantify the exact impact of EPAs on this $296 million contract. However, such clauses inherently carry a risk of increased costs for the government.
What is the current operational readiness or inventory status of these grenade systems within the Department of the Army?
Information regarding the current operational readiness or inventory status of these specific grenade systems is not provided in the data. This metric is crucial for understanding the actual utility and effectiveness of the procured items and whether the substantial investment has translated into tangible military capability.
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: W52P1J08R0153
Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: National Presto Industries Inc (UEI: 006196174)
Address: 4230 CAPITAL CIR DR, JANESVILLE, WI, 53546
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $296,030,663
Exercised Options: $296,030,663
Current Obligation: $296,030,663
Contract Characteristics
Consolidated Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-02-18
Current End Date: 2018-12-31
Potential End Date: 2018-12-31 12:12:00
Last Modified: 2019-04-05
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- Fixed Price W/ EPA Contract. This Contract IS for the Production of 40MM Grenade Systems Family of Ammunition: M430a1-Metal Pallet, M430a1-Wood Pallet, M433, M583A1, M781, M918, Mixed Belt, M385A1, M992, M585, M661, M662, and M433E1, and M583A1 — $965.1M (Department of Defense)
- 200508!000997!2100!w52p1j!u.s. Army Industrial Operations !w52p1j05c0030 !A!N! !N! ! !20050429!20100930!884356429!884356429!006196174!n!amtec Corporation !4230 Capital Circle DR !janesville !wi!53546!37825!105!55!janesville !rock !wisconsin !+000046910882!n!n!000046910882!1310!ammunition, Over 30 MM UP to 75 MM !A6 !ammunition !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !a!n!k!2!006!k! !Z!N!F! ! !n!b!n!n! ! !D! !b!a!000!a!b!y!c! ! ! ! ! !0001! ! — $675.2M (Department of Defense)
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