DoD awards $110M for illumination and infrared flares to ATK Launch Systems LLC

Contract Overview

Contract Amount: $110,132,504 ($110.1M)

Contractor: ATK Launch Systems LLC

Awarding Agency: Department of Defense

Start Date: 2010-09-24

End Date: 2013-09-18

Contract Duration: 1,090 days

Daily Burn Rate: $101.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD OF LUU-2D/B ILLUMINATION FLARES AND LUU-19B/B INFRARED FLARES

Place of Performance

Location: CORINNE, BOX ELDER County, UTAH, 84307

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $110.1 million to ATK LAUNCH SYSTEMS LLC for work described as: AWARD OF LUU-2D/B ILLUMINATION FLARES AND LUU-19B/B INFRARED FLARES Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The firm-fixed-price contract structure shifts performance risk to the contractor. 3. Limited competition may indicate a lack of market alternatives or strategic sourcing decisions. 4. The contract duration of nearly three years suggests a sustained need for these specific munitions. 5. The award falls within the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' NAICS code, a broad category. 6. The contractor, ATK Launch Systems LLC, is a significant player in the defense sector.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable contract data for these specific flares. The total award of over $110 million for a three-year period suggests a substantial procurement. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if taxpayers received the best possible price. The absence of competition could lead to higher costs than if multiple vendors had vied for the contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning ATK Launch Systems LLC was the only bidder considered. This approach is typically justified when only one responsible source is available or when there's a compelling urgency. The lack of competition means there was no opportunity for price negotiation based on multiple offers, potentially impacting the final price paid by the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher costs for taxpayers compared to a competitively bid contract.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Army, for essential illumination and infrared flare capabilities. These flares are critical for military operations, providing battlefield illumination and signaling capabilities. The geographic impact is primarily within the defense supply chain and operational theaters where these munitions are deployed. The contract supports jobs within ATK Launch Systems LLC and its associated supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Lack of transparency in pricing justification due to limited competition.
Potential for contractor lock-in given the specialized nature of munitions.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Long-term contract provides supply chain stability for critical munitions.
Award to an established defense contractor suggests a degree of reliability.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ordnance and munitions. The market for specialized flares is likely concentrated among a few defense contractors with the necessary technical expertise and production capabilities. The total value of this award is significant within this niche, reflecting the critical nature of the supplies for military operations.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting plans for small businesses in the provided data. This suggests that the primary awardee is a large defense contractor, and the specialized nature of the product may limit opportunities for small business participation in the prime contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, making detailed public scrutiny of pricing and justification more difficult.

Related Government Programs

Department of Defense Ammunition Procurement
Military Pyrotechnics
Illumination Flares
Infrared Flares
Chemical Product Manufacturing

Risk Flags

Sole-source award
Lack of competitive pricing data
Potential for cost overruns without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.1 million to ATK LAUNCH SYSTEMS LLC. AWARD OF LUU-2D/B ILLUMINATION FLARES AND LUU-19B/B INFRARED FLARES

Who is the contractor on this award?

The obligated recipient is ATK LAUNCH SYSTEMS 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 $110.1 million.

What is the period of performance?

Start: 2010-09-24. End: 2013-09-18.

What is the track record of ATK Launch Systems LLC in delivering similar munitions to the DoD?

ATK Launch Systems LLC, now part of Northrop Grumman's defense sector, has a long history of supplying munitions and propulsion systems to the U.S. military. They are known for producing a wide range of ordnance, including flares, rockets, and missile components. Their track record generally indicates a capacity to meet stringent military specifications and delivery schedules. However, specific performance metrics for this particular contract, such as on-time delivery rates or quality defect reports, are not publicly detailed in the provided data. Given their established position, it's reasonable to assume a level of competence, but independent verification of consistent high performance across all contracts would require deeper analysis of DoD performance databases.

How does the per-unit cost of these flares compare to similar products procured competitively?

Direct comparison of per-unit costs is not feasible with the provided data, primarily because the contract was awarded sole-source and specific unit quantities are not detailed. Without competitive bids or publicly available pricing for comparable items from other vendors, establishing a benchmark for value-for-money is impossible. Sole-source awards often lack the price transparency that competitive bidding provides. To assess this, one would need access to historical competitive solicitations for similar flares or internal DoD cost analysis reports that benchmark ATK's pricing against market rates or other government contracts.

What are the primary risks associated with a sole-source award for critical munitions?

The primary risks associated with a sole-source award for critical munitions include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or improve efficiency, and a risk of supply chain disruption if the sole provider faces production issues. Taxpayers may bear a higher cost than necessary. Furthermore, reliance on a single supplier can create strategic vulnerabilities if that supplier's capabilities are compromised or if geopolitical factors affect their operations. The government also loses the opportunity to foster a broader base of qualified suppliers through competition, which could enhance long-term supply chain resilience.

What is the strategic importance of illumination and infrared flares for military operations?

Illumination flares are crucial for providing battlefield visibility during nighttime operations, enabling troops to see enemy positions, navigate terrain, and coordinate movements. They can disrupt enemy observation and provide tactical advantages. Infrared (IR) flares serve multiple purposes, including countermeasure against heat-seeking missiles (decoy flares) and as signaling devices visible only through night vision equipment, maintaining operational security. Both types of flares are considered essential components of modern military logistics and tactical operations, contributing directly to force protection and mission success across various environments and threat levels.

What is the historical spending trend for illumination and infrared flares by the Department of Defense?

Historical spending on illumination and infrared flares by the Department of Defense is likely substantial and fluctuates based on operational tempo, technological advancements, and inventory management strategies. While specific aggregate data for these flares isn't provided, the DoD consistently procures a wide array of pyrotechnics and munitions. Spending in this category is influenced by ongoing conflicts, training exercises, and the need to maintain readiness. Over the years, there has been a continuous requirement for these items, suggesting consistent, albeit variable, budgetary allocations. Analyzing past DoD budgets and contract awards for similar items would reveal trends in volume and value.

Are there any known quality issues or performance deficiencies reported for ATK Launch Systems LLC's flares?

Publicly available information does not detail specific quality issues or performance deficiencies for ATK Launch Systems LLC's flares under this particular contract (LUU-2D/B and LUU-19B/B). Generally, defense contractors are subject to rigorous quality assurance processes and performance standards. However, like any complex manufacturing, isolated incidents can occur. A comprehensive assessment would require reviewing DoD's contract performance databases, quality inspection reports, and any formal complaints or corrective action requests filed against the contractor for this specific product line. Without such detailed records, it's difficult to definitively assess their quality performance beyond their general industry reputation.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

Product/Service Code: NUCLEAR ORDNANCE

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J08R0066

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 9160 N HWY 83, CORINNE, UT, 84307

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: $110,132,504

Exercised Options: $110,132,504

Current Obligation: $110,132,504

Subaward Activity

Number of Subawards: 58

Total Subaward Amount: $37,318,261

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline