Army awards $474M for Small Arms Ammunition Manufacturing to Olin Winchester LLC
Contract Overview
Contract Amount: $474,113,464 ($474.1M)
Contractor: Olin Winchester LLC
Awarding Agency: Department of Defense
Start Date: 2016-01-29
End Date: 2021-07-30
Contract Duration: 2,009 days
Daily Burn Rate: $236.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: NSNS: 1305-01-155-5459, 1305-01-559-3333, 1305-01-606-7003, 1305-00-028-6574, 1305-01-370-2594
Place of Performance
Location: OXFORD, LAFAYETTE County, MISSISSIPPI, 38655
Plain-Language Summary
Department of Defense obligated $474.1 million to OLIN WINCHESTER LLC for work described as: NSNS: 1305-01-155-5459, 1305-01-559-3333, 1305-01-606-7003, 1305-00-028-6574, 1305-01-370-2594 Key points: 1. Significant contract value of $474 million awarded. 2. Olin Winchester LLC is the sole awardee. 3. Contract type is Fixed Price with Economic Price Adjustment. 4. The sector is Manufacturing, specifically Small Arms Ammunition.
Value Assessment
Rating: good
The contract value is substantial, indicating a significant need for small arms ammunition. Pricing is subject to economic adjustments, which could impact the final cost over the contract's duration.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a limited competition. This method may impact price discovery compared to unrestricted full and open competition.
Taxpayer Impact: Taxpayer funds are being used for a critical defense supply, with potential for price fluctuations due to economic adjustments.
Public Impact
Ensures a consistent supply of small arms ammunition for the Department of the Army. Supports a key defense manufacturing capability within the United States. Potential for price increases due to economic price adjustment clauses.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could lead to cost overruns.
- Limited competition may not yield the best possible price.
- Contract duration and potential for follow-on orders.
Positive Signals
- Secures a vital defense supply chain.
- Supports domestic manufacturing.
- Award to a known entity with relevant experience.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. Spending benchmarks for such specialized manufacturing can vary widely based on geopolitical factors and demand.
Small Business Impact
The contract was not awarded to a small business. Analysis of subcontracting opportunities for small businesses is not provided in the data.
Oversight & Accountability
Oversight is managed by the Department of the Army. The contract type and duration suggest ongoing monitoring is necessary to ensure performance and cost control.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost escalation due to economic price adjustment.
- Limited competition may result in suboptimal pricing.
- Dependence on a single supplier for critical ammunition.
- Lack of transparency regarding the exclusion of other sources.
Tags
small-arms-ammunition-manufacturing, department-of-defense, ms, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $474.1 million to OLIN WINCHESTER LLC. NSNS: 1305-01-155-5459, 1305-01-559-3333, 1305-01-606-7003, 1305-00-028-6574, 1305-01-370-2594
Who is the contractor on this award?
The obligated recipient is OLIN WINCHESTER 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 $474.1 million.
What is the period of performance?
Start: 2016-01-29. End: 2021-07-30.
What is the historical pricing trend for this type of ammunition under similar economic conditions?
Analyzing historical pricing data for small arms ammunition, particularly under fixed-price contracts with economic price adjustment clauses, is crucial. This helps establish a baseline for fair pricing and identify potential anomalies. Understanding past trends in raw material costs and labor can inform whether the current economic adjustment mechanisms are likely to result in significant price increases or remain within reasonable bounds compared to market fluctuations.
What specific factors led to the exclusion of other sources in this competition?
The exclusion of other sources suggests that only a limited number of entities possessed the necessary capabilities, security clearances, or production capacity to fulfill the contract requirements. This could be due to specialized manufacturing processes, proprietary technology, or existing long-term relationships. Understanding these specific factors is key to assessing whether the limited competition was justified or if it represents a missed opportunity for broader market engagement.
How effectively does the economic price adjustment clause protect the government from excessive cost increases?
The effectiveness of the economic price adjustment clause hinges on the specific indices and caps defined within the contract. While intended to account for legitimate cost fluctuations in materials and labor, poorly defined clauses can expose the government to significant price hikes. Robust oversight and clear benchmarks are needed to ensure that adjustments are reasonable and directly tied to verifiable economic factors, rather than market speculation or supplier inefficiencies.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition 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: W52P1J15R0009
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 600 POWDER MILL RD, EAST ALTON, IL, 62024
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $474,113,464
Exercised Options: $474,113,464
Current Obligation: $474,113,464
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-01-29
Current End Date: 2021-07-30
Potential End Date: 2021-07-30 12:07:00
Last Modified: 2023-05-10
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