General Dynamics secures $20.4M contract for M793 TP-T cartridges, highlighting defense ammunition manufacturing

Contract Overview

Contract Amount: $20,452,485 ($20.5M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-04-26

End Date: 2024-08-30

Contract Duration: 1,953 days

Daily Burn Rate: $10.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS DO IS FOR THE PROCUREMENT OF 25MM M793 TP-T NAVSEA CARTRIDGES (AMMUNITION). NSN: 1305-01-212-5066

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: THIS DO IS FOR THE PROCUREMENT OF 25MM M793 TP-T NAVSEA CARTRIDGES (AMMUNITION). NSN: 1305-01-212-5066 Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1953 days indicates a long-term supply need for ammunition. 3. This procurement falls under the Ammunition (except Small Arms) Manufacturing sector. 4. The firm-fixed-price contract type aims to provide cost certainty for the government. 5. Delivery order signifies a specific call-off against a potentially larger contract vehicle. 6. The award to General Dynamics Ordnance & Tactical Systems, Inc. points to established defense contractor capabilities.

Value Assessment

Rating: good

The total award amount of $20.4 million for 25mm M793 TP-T cartridges appears reasonable given the nature of defense procurement and the specified duration. Benchmarking against similar ammunition contracts is challenging without more specific details on quantity and technical specifications, but the firm-fixed-price structure provides a degree of cost control. The contract's value is consistent with the scale of typical defense supply chain requirements for specialized munitions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, specific sources may have been initially excluded based on pre-qualification or other criteria before the final competition. The presence of multiple bidders (implied by 'full and open') generally fosters price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, which limits a deeper analysis of the competition's intensity.

Taxpayer Impact: A competitive bidding process, even with initial source exclusions, is generally beneficial for taxpayers as it encourages multiple companies to offer their best pricing and terms, potentially leading to cost savings compared to sole-source awards.

Public Impact

The primary beneficiaries are the Department of the Army and potentially other branches of the Department of Defense requiring these specific training cartridges. The contract ensures the supply of 25mm M793 TP-T (Tracer) cartridges, crucial for training exercises. The geographic impact is primarily within the United States, related to the manufacturing and delivery of the ammunition. Workforce implications include employment at General Dynamics Ordnance & Tactical Systems, Inc. and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Reliance on a single primary contractor for a critical defense item.
Fluctuations in raw material costs could impact long-term affordability if not adequately managed in the pricing structure.

Positive Signals

Awarded through full and open competition, indicating a robust market.
Firm-fixed-price contract provides cost predictability.
Long contract duration suggests a stable, ongoing requirement and relationship.
Contractor has a track record in ordnance manufacturing.

Sector Analysis

This contract falls within the defense industrial base, specifically the manufacturing of ammunition. The market for military ammunition is characterized by high barriers to entry due to stringent quality control, security requirements, and specialized manufacturing capabilities. Spending in this sector is driven by military readiness, training needs, and operational deployments. Comparable spending benchmarks would involve analyzing other large-volume ammunition procurements across different calibers and types.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' (small business) flag is false. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that the prime contractor, General Dynamics, is likely a large business, and opportunities for small businesses would primarily exist further down the supply chain, if at all.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of the Army. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Training Ammunition Contracts
Ordnance Manufacturing Contracts
General Dynamics Defense Contracts

Risk Flags

Potential for supply chain vulnerabilities
Dependence on specific manufacturing capabilities
Long-term sustainment planning required

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. THIS DO IS FOR THE PROCUREMENT OF 25MM M793 TP-T NAVSEA CARTRIDGES (AMMUNITION). NSN: 1305-01-212-5066

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE & 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 $20.5 million.

What is the period of performance?

Start: 2019-04-26. End: 2024-08-30.

What is the historical spending pattern for M793 TP-T cartridges by the Department of Defense?

Analyzing historical spending for M793 TP-T cartridges requires accessing detailed procurement data over multiple fiscal years. While this specific award totals $20.45 million, understanding the broader trend involves looking at previous contracts for the same NSN (1305-01-212-5066) or similar training ammunition. Factors influencing historical spending include changes in training doctrine, force structure, and budget allocations. A comprehensive review would likely reveal fluctuations based on these variables, potentially showing periods of higher or lower demand and corresponding contract values. Without access to a multi-year database focused solely on this item, precise historical figures are difficult to ascertain, but the current award suggests a consistent need.

How does the per-unit cost of these cartridges compare to market rates or similar government procurements?

Determining the precise per-unit cost is not possible with the provided data, as the total award amount ($20.45 million) does not specify the exact quantity of cartridges procured. To benchmark per-unit cost, one would need the total quantity. If, for example, 1 million cartridges were procured, the per-unit cost would be approximately $20.45. This figure would then need to be compared against other government contracts for the same or similar M793 TP-T cartridges, or against commercial price lists if available. Government contracts often benefit from bulk purchasing power, potentially leading to lower per-unit costs than commercial sales, but this is highly dependent on the specific terms, competition, and quantity involved.

What is General Dynamics Ordnance & Tactical Systems, Inc.'s track record with similar ammunition contracts?

General Dynamics Ordnance & Tactical Systems, Inc. (GD-OTS) has a well-established track record in the defense industry, particularly in the manufacturing of munitions and ordnance systems. They are a significant supplier to the U.S. military and allied nations. Their portfolio includes a wide range of ammunition types, from small-caliber to larger artillery and mortar rounds. GD-OTS has consistently secured contracts for various ammunition needs, indicating a strong capability in production, quality control, and program management. Their experience with similar contracts suggests a high likelihood of successful performance on this M793 TP-T cartridge award, given their established infrastructure and expertise in this specialized manufacturing domain.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks for this contract include potential supply chain disruptions for raw materials or components, manufacturing quality control issues, and delivery delays. Mitigation strategies are typically embedded within the contract terms. The firm-fixed-price structure incentivizes GD-OTS to manage costs effectively. Contract clauses often include penalties for late delivery and requirements for stringent quality assurance testing. The government's oversight, through contracting officers and quality assurance representatives, further mitigates risks by monitoring performance and compliance. GD-OTS's experience and established processes also serve as a risk-reduction factor.

How does this contract align with the Department of the Army's overall ammunition procurement strategy?

This contract for M793 TP-T cartridges aligns with the Department of the Army's strategy to maintain adequate training ammunition stocks. The M793 is a tracer round often used in training scenarios to simulate live fire and improve marksmanship. The Army's strategy typically involves ensuring a steady supply of various ammunition types, including training rounds, to support readiness and proficiency across its forces. Procurements like this, often awarded through competitive means and with firm-fixed-price terms, aim to balance cost-effectiveness with the critical need for reliable and readily available munitions for training exercises.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 6658 ROUTE 148, MARION, IL, 62959

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: $20,452,485

Exercised Options: $20,452,485

Current Obligation: $20,452,485

Subaward Activity

Number of Subawards: 38

Total Subaward Amount: $7,406,687

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J18D0093

IDV Type: IDC

Timeline