Army awards $25.5M contract for M58A4 Mine Clearing Line Charge to American Ordnance LLC

Contract Overview

Contract Amount: $25,468,557 ($25.5M)

Contractor: American Ordnance LLC

Awarding Agency: Department of Defense

Start Date: 2018-09-25

End Date: 2021-09-30

Contract Duration: 1,101 days

Daily Burn Rate: $23.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SUPPLY CONTRACT - M58A4 MINE CLEARING LINE CHARGE.

Place of Performance

Location: MIDDLETOWN, DES MOINES County, IOWA, 52638

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to AMERICAN ORDNANCE LLC for work described as: SUPPLY CONTRACT - M58A4 MINE CLEARING LINE CHARGE. Key points: 1. Contract awarded for specialized ordnance used in mine clearing operations. 2. Sole-source award to American Ordnance LLC, a key defense contractor. 3. Potential for higher costs due to lack of competition. 4. Spending falls within the Ammunition Manufacturing sector.

Value Assessment

Rating: fair

The contract value of $25.5 million for ammunition manufacturing appears reasonable for specialized ordnance. However, without competitive bidding, it's difficult to definitively assess if this represents the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to American Ordnance LLC. This limits price discovery and may result in less favorable terms for the government compared to a competitive process.

Taxpayer Impact: The lack of competition could lead to taxpayers paying a premium for this essential military equipment.

Public Impact

Ensures availability of critical mine-clearing equipment for military operations. Supports a specific defense contractor, potentially impacting industry capacity. Highlights reliance on specialized manufacturers for niche defense products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls under the Ammunition (except Small Arms) Manufacturing sector. Spending benchmarks for similar specialized ordnance can vary significantly based on quantity, complexity, and specific threat requirements.

Small Business Impact

There is no indication of small business participation in this contract. The award was made directly to American Ordnance LLC, suggesting a focus on established prime contractors rather than subcontracting opportunities for smaller firms.

Oversight & Accountability

The contract was awarded by the Department of the Army. Oversight would typically involve contract management teams ensuring delivery schedules, quality standards, and adherence to the firm fixed price terms.

Related Government Programs

Risk Flags

Tags

ammunition-except-small-arms-manufacturi, department-of-defense, ia, definitive-contract, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to AMERICAN ORDNANCE LLC. SUPPLY CONTRACT - M58A4 MINE CLEARING LINE CHARGE.

Who is the contractor on this award?

The obligated recipient is AMERICAN ORDNANCE 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 $25.5 million.

What is the period of performance?

Start: 2018-09-25. End: 2021-09-30.

What is the justification for the sole-source award, and how does it align with DoD's competition goals?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For the DoD, while competition is preferred, sole-source awards are sometimes necessary. The alignment with competition goals would depend on whether this was a last resort due to specific circumstances or a recurring practice for this type of munition.

How does the unit cost of the M58A4 Mine Clearing Line Charge compare to similar historical or alternative systems?

Without access to specific unit cost data or benchmarks for comparable mine-clearing systems, a direct comparison is difficult. The $25.5 million total award over a multi-year period suggests a significant quantity. A thorough analysis would require comparing the price per charge against other available technologies or previous procurements of similar capabilities, considering factors like effectiveness and operational lifespan.

What are the long-term implications for military readiness if only one supplier can produce this critical ordnance?

A sole-source dependency for critical ordnance like the M58A4 poses a significant risk to long-term military readiness. It creates a vulnerability if the sole supplier faces production issues, financial instability, or geopolitical disruptions. Diversifying the supply chain or developing alternative technologies would be crucial to mitigate this risk and ensure consistent availability during potential conflicts or extended operational demands.

Industry Classification

NAICS: ManufacturingOther Fabricated Metal Product ManufacturingAmmunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J17R0096

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: DAY & Zimmermann Group Inc., the

Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 52638

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,468,557

Exercised Options: $25,468,557

Current Obligation: $25,468,557

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline

Start Date: 2018-09-25

Current End Date: 2021-09-30

Potential End Date: 2021-09-30 12:09:00

Last Modified: 2023-02-04

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