DoD awards $110M contract to General Dynamics for ammunition, lacking competition

Contract Overview

Contract Amount: $110,362,999 ($110.4M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-13

End Date: 2026-11-30

Contract Duration: 3,000 days

Daily Burn Rate: $36.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK82-1 NSN: 1325-00-585-3841; MK82-6 NSN: 1325-00-559-1663; MK84-4 NSN: 1325-00-008-0335

Place of Performance

Location: GARLAND, DALLAS County, TEXAS, 75040

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $110.4 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: MK82-1 NSN: 1325-00-585-3841; MK82-6 NSN: 1325-00-559-1663; MK84-4 NSN: 1325-00-008-0335 Key points: 1. Significant contract value of over $110 million for ammunition manufacturing. 2. Sole awardee, General Dynamics, indicates a lack of competitive bidding. 3. Risk of inflated pricing and reduced innovation due to non-competitive award. 4. Ammunition manufacturing falls under the broader 'Defense' sector.

Value Assessment

Rating: questionable

The contract's value of $110M for ammunition is substantial. Without competitive benchmarking, it's difficult to assess if this price is optimal. The lack of competition raises concerns about potential overpricing compared to what might be achieved through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method bypasses the price discovery benefits of a competitive environment, potentially leading to higher costs for the government and taxpayers.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for this ammunition procurement.

Public Impact

Ensures supply of critical ammunition for military operations. Potential for higher costs due to lack of competitive pressure. Reliance on a single contractor for essential defense materiel. Impacts the defense industrial base and supply chain resilience. Opportunity for future competition if market conditions change.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for cost overruns
Single point of failure in supply chain

Positive Signals

Ensures critical supply
Long-term contract stability

Sector Analysis

This contract falls within the Defense sector, specifically ammunition manufacturing. Spending benchmarks for this niche are difficult to ascertain without specific competitive data, but large sole-source awards warrant scrutiny for cost-effectiveness.

Small Business Impact

The data indicates this contract was awarded to General Dynamics, a large business. There is no indication of small business participation in this specific award, suggesting missed opportunities for small business engagement.

Oversight & Accountability

The 'NOT COMPETED' status suggests limited upfront oversight on price negotiation. Ongoing oversight will be crucial to monitor performance and ensure fair pricing throughout the contract duration, especially given the lack of initial competition.

Related Government Programs

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

Risk Flags

Sole-source award
High contract value
Lack of transparency in price determination
Potential for cost creep
Limited market access for competitors

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.4 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. MK82-1 NSN: 1325-00-585-3841; MK82-6 NSN: 1325-00-559-1663; MK84-4 NSN: 1325-00-008-0335

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 $110.4 million.

What is the period of performance?

Start: 2018-09-13. End: 2026-11-30.

What is the justification for awarding this ammunition contract on a sole-source basis?

The justification for a sole-source award typically involves factors such as unique capabilities of the contractor, urgent need, or lack of adequate competition. Without specific documentation, it's presumed that the Department of Defense determined that only General Dynamics could fulfill the requirement, or that competition was not feasible or cost-effective at the time of award.

What are the potential risks associated with a sole-source contract for ammunition?

The primary risks include paying a premium price due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and potential supply chain vulnerabilities if the sole contractor faces production issues. This also limits opportunities for other capable manufacturers to enter the market.

How can the government ensure value for money on this non-competed contract?

The government can ensure value through robust contract administration, including detailed performance monitoring, independent cost analysis where possible, and negotiation of favorable terms. Establishing clear performance metrics and potentially seeking competitive bids for future contract modifications or replacements can also drive better value.

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: W52P1J16R0121

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $110,362,999

Exercised Options: $110,362,999

Current Obligation: $110,362,999

Subaward Activity

Number of Subawards: 94

Total Subaward Amount: $45,829,787

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline