DoD's $310M contract for bomb components awarded to General Dynamics, raising questions on competition and value

Contract Overview

Contract Amount: $309,935,264 ($309.9M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-07-28

End Date: 2019-09-30

Contract Duration: 1,159 days

Daily Burn Rate: $267.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK84-4 EMPTY CASE ASSEMBLY (BOMB BODY) - NSN: 1325-01-008-1335 MK3 MOD 0 SUSPENSION LUGS - NSN: 1325-00-684-1364 TRINITROTOLUENE (TNT) - NSN: 1376-00-628-3333 ALUMINUM POWDER - NSN: 6810-00-628-3382

Place of Performance

Location: GARLAND, DALLAS County, TEXAS, 75040

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $309.9 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: MK84-4 EMPTY CASE ASSEMBLY (BOMB BODY) - NSN: 1325-01-008-1335 MK3 MOD 0 SUSPENSION LUGS - NSN: 1325-00-684-1364 TRINITROTOLUENE (TNT) - NSN: 1376-00-628-3333 ALUMINUM POWDER - NSN: 6810-00-628-3382 Key points: 1. The contract, valued at $309.9 million, is for bomb components including empty cases, suspension lugs, TNT, and aluminum powder. 2. Awarded to General Dynamics Ordnance and Tactical Systems, Inc., the contract highlights a lack of competition for these specific defense materials. 3. The firm fixed-price contract spans over three years, with potential risks associated with long-term supply chain dependencies. 4. The sector is Ammunition (except Small Arms) Manufacturing, a critical but often specialized area of defense procurement.

Value Assessment

Rating: questionable

The total award of $309.9 million for bomb components lacks specific per-unit cost data for direct comparison. Without competitive bidding, it's difficult to ascertain if this price represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was 'NOT COMPETED,' indicating a sole-source award to General Dynamics. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for these essential bomb components, as there was no market pressure to drive down costs.

Public Impact

Ensures the supply of critical components for munitions, supporting military readiness. Potential for overpayment due to the absence of competitive bidding. Reliance on a single supplier could create vulnerabilities in the defense supply chain. The contract's duration and value suggest a significant, long-term commitment to this specific supplier.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Lack of transparency in pricing due to no-bid nature.
Potential for supply chain disruption if the sole provider faces issues.

Positive Signals

Ensures availability of critical defense components.
Long-term contract provides stability for the supplier and the DoD.

Sector Analysis

The Ammunition (except Small Arms) Manufacturing sector is vital for national defense. Spending benchmarks are difficult to establish due to the specialized nature and often classified requirements of such components, but large sole-source contracts warrant scrutiny.

Small Business Impact

The data indicates that this contract was not awarded to small businesses, as General Dynamics Ordnance and Tactical Systems, Inc. is a large corporation. There is no indication of subcontracting opportunities for small businesses within this specific award.

Oversight & Accountability

The 'NOT COMPETED' status raises oversight concerns. While sole-source awards can be justified, the lack of a competitive process necessitates robust justification and potentially post-award review to ensure fair pricing and value for taxpayer money.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award.
Lack of competitive bidding.
Potential for inflated pricing.
Supply chain dependency on a single entity.
Limited transparency on cost justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $309.9 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. MK84-4 EMPTY CASE ASSEMBLY (BOMB BODY) - NSN: 1325-01-008-1335 MK3 MOD 0 SUSPENSION LUGS - NSN: 1325-00-684-1364 TRINITROTOLUENE (TNT) - NSN: 1376-00-628-3333 ALUMINUM POWDER - NSN: 6810-00-628-3382

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 (Department of the Army).

What is the total obligated amount?

The obligated amount is $309.9 million.

What is the period of performance?

Start: 2016-07-28. End: 2019-09-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing without competition?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without detailed documentation, it's presumed the Department of the Army determined General Dynamics was the only source. However, the absence of competition makes verifying fair pricing challenging, often relying on historical data or cost-plus analysis, which may not fully reflect market value.

What are the long-term risks associated with relying on a single supplier for critical bomb components like TNT and aluminum powder?

Long-term reliance on a sole supplier for critical components like TNT and aluminum powder poses significant supply chain risks. These include potential price escalations, vulnerability to production disruptions (e.g., facility issues, raw material shortages), and reduced leverage for the government in future negotiations. It could also stifle innovation if alternative suppliers are not encouraged to enter the market.

How does the firm fixed-price contract structure impact the government's ability to manage costs and ensure value for money in this sole-source scenario?

A firm fixed-price contract aims to provide cost certainty. However, in a sole-source situation, the 'firm' price is set without competitive pressure, potentially inflating the cost. While it shifts cost risk to the contractor, the government may overpay if the initial price is not rigorously benchmarked against comparable market data or if the contractor has significant pricing power due to the lack of alternatives.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J16R0132

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1200 N GLENBROOK DR, GARLAND, TX, 75040

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

Financial Breakdown

Contract Ceiling: $309,935,264

Exercised Options: $309,935,264

Current Obligation: $309,935,264

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $3,595,227

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline