DoD awards $24.8M for 20mm ammunition, highlighting full and open competition for essential ordnance

Contract Overview

Contract Amount: $24,812,916 ($24.8M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-08-30

End Date: 2023-10-31

Contract Duration: 1,523 days

Daily Burn Rate: $16.3K/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: MEDIUM CALIBER 20MM PGU-28 DELIVERY ORDER AWARD.

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: MEDIUM CALIBER 20MM PGU-28 DELIVERY ORDER AWARD. Key points: 1. Value for money assessed through competitive bidding, aiming for optimal pricing on critical defense supplies. 2. Competition dynamics indicate a robust market for ammunition manufacturing, benefiting from open bidding processes. 3. Risk indicators are moderate, given the established nature of the product and supplier. 4. Performance context relies on timely delivery and adherence to specifications for military readiness. 5. Sector positioning places this contract within the broader defense industrial base for munitions.

Value Assessment

Rating: good

The contract value of $24.8 million for 20mm ammunition appears reasonable given the duration and the nature of the product. Benchmarking against similar, albeit potentially different caliber or specification, ammunition contracts would provide a clearer picture of value. However, the use of firm-fixed-price contracts generally shifts risk to the contractor, which can lead to more predictable costs for the government. The competitive nature of the award suggests that pricing was scrutinized against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple potential bidders were allowed to submit proposals. The specific exclusion of sources might relate to proprietary technology or specific manufacturing capabilities, but the overall framework allowed for broad participation. The presence of multiple bidders typically fosters price discovery and encourages competitive pricing, leading to better value for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure the best possible price for this essential defense materiel.

Public Impact

The primary beneficiaries are the U.S. Army units requiring 20mm ammunition for training and operational readiness. Services delivered include the manufacturing and delivery of PGU-28 20mm ammunition. Geographic impact is national, supporting military readiness across various deployments, with manufacturing likely concentrated in specific industrial facilities. Workforce implications include employment in defense manufacturing, logistics, and quality assurance roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring consistent quality control across all manufactured rounds is critical.
Dependence on a single supplier for this specific order could pose a risk if not managed.

Positive Signals

Awarded through a competitive process, suggesting favorable pricing and supplier selection.
Firm-fixed-price contract type helps control costs and budget predictability.
Long-term contract duration allows for sustained supply and potential volume discounts.

Sector Analysis

The defense sector for ammunition manufacturing is a critical component of national security. This contract falls under the 'Ammunition (except Small Arms) Manufacturing' industry, which is characterized by specialized production processes and stringent quality requirements. The market size is substantial, driven by consistent military demand. This specific award for 20mm rounds contributes to the overall readiness and operational capability of the armed forces, fitting within the broader landscape of defense procurement.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor is a large business. There is no explicit information on subcontracting plans for small businesses within this award notice. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, though large prime contractors often engage small businesses for various components or services in their broader supply chains.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. 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 would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Aviation Support Contracts
Ordnance and Tactical Systems Manufacturing
Medium Caliber Ammunition Supply

Risk Flags

Potential supply chain vulnerabilities for critical raw materials.
Ensuring consistent quality control for explosive ordnance.
Dependence on specific manufacturing capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. MEDIUM CALIBER 20MM PGU-28 DELIVERY ORDER AWARD.

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 $24.8 million.

What is the period of performance?

Start: 2019-08-30. End: 2023-10-31.

What is the historical spending trend for 20mm ammunition by the Department of Defense?

Analyzing historical spending on 20mm ammunition by the Department of Defense reveals a consistent demand driven by training exercises and operational requirements for various aircraft and ground platforms. While specific figures fluctuate year-to-year based on global security postures and budget allocations, the overall trend indicates sustained procurement. For instance, prior to this $24.8 million award, there may have been other significant contracts for similar ammunition types. Examining data from sources like the Federal Procurement Data System (FPDS) over the past 5-10 years would show the aggregate annual spending, identify major awardees, and highlight any significant shifts in contract values or quantities. This context helps in evaluating whether the current award represents a typical procurement volume or a deviation, potentially influenced by factors like inventory levels, new platform introductions, or changes in threat assessments.

How does the unit cost of this PGU-28 ammunition compare to similar contracts awarded to other manufacturers?

Directly comparing the unit cost of the PGU-28 ammunition in this $24.8 million award requires access to detailed pricing breakdowns not publicly available in the award notice. However, the fact that this was awarded under 'full and open competition after exclusion of sources' suggests that multiple bids were evaluated, implying a competitive pricing environment. To benchmark, one would need to identify comparable contracts for the same or similar 20mm rounds (e.g., PGU-27, PGU-30) awarded around the same period. Analyzing the price per round across these contracts, while accounting for differences in quantity, delivery schedules, and specific technical specifications, would reveal if General Dynamics Ordnance & Tactical Systems' pricing was competitive. If this award represents a significant portion of the total market volume, its pricing can serve as a benchmark itself. Without specific unit cost data, the assessment relies on the assumption that the competitive process yielded a fair market price.

What are the specific risks associated with the supply chain for this type of ammunition?

The supply chain for 20mm ammunition, like many defense materiel, carries several inherent risks. Key among these is the availability and cost of raw materials, such as propellants, explosives, and specific metal alloys for casings and projectiles. Geopolitical instability or disruptions in global commodity markets can impact these inputs. Furthermore, the manufacturing process itself requires specialized facilities and adherence to strict safety and environmental regulations, which can limit the number of qualified suppliers and create bottlenecks. Transportation and logistics also pose risks, particularly for hazardous materials, requiring specialized handling and security. Finally, reliance on a limited number of key component suppliers or a single prime contractor for a specific order can increase vulnerability to disruptions. The Department of Defense actively manages these risks through strategies like maintaining strategic stockpiles, diversifying supplier bases where feasible, and conducting thorough risk assessments during the procurement process.

What is the track record of General Dynamics Ordnance & Tactical Systems, Inc. in fulfilling similar defense contracts?

General Dynamics Ordnance & Tactical Systems, Inc. (GD-OTS) has a well-established track record as a major supplier of munitions and ordnance systems to the U.S. military and allied nations. They are known for producing a wide range of ammunition, including medium-caliber rounds like the PGU-28. Historically, GD-OTS has demonstrated the capability to meet demanding production schedules and quality standards required by defense contracts. Performance on previous contracts, including delivery timeliness, product quality, and adherence to specifications, would be a key factor in their selection for this award. While specific contract performance metrics are not detailed here, their continued presence as a prime contractor in this sector suggests a generally positive performance history. Government contract databases and past performance reviews would offer more granular insights into their specific track record.

How does the 'full and open competition after exclusion of sources' clause impact the overall cost-effectiveness for taxpayers?

The 'full and open competition after exclusion of sources' clause aims to balance the benefits of broad competition with the need to potentially leverage specific, advanced, or proprietary capabilities. In essence, it means that while the competition was open to all responsible sources, certain entities might have been excluded based on specific criteria (e.g., intellectual property rights, unique manufacturing processes, or security clearances). For taxpayers, this clause can have mixed impacts on cost-effectiveness. Ideally, if the exclusion criteria are narrowly defined and justified, it still allows for a competitive environment among qualified bidders, driving down prices. However, if the exclusion significantly limits the pool of potential bidders, it could reduce competitive pressure and potentially lead to higher prices than a truly unrestricted open competition. The key determinant of cost-effectiveness lies in the number and capability of the bidders who remained eligible to compete.

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: $24,812,916

Exercised Options: $24,812,916

Current Obligation: $24,812,916

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $5,303,802

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