Army Awards $254M for 5.56mm Primer Unloader System Upgrade to Olin Winchester LLC

Contract Overview

Contract Amount: $254,148,705 ($254.1M)

Contractor: Olin Winchester LLC

Awarding Agency: Department of Defense

Start Date: 2020-08-03

End Date: 2027-09-30

Contract Duration: 2,614 days

Daily Burn Rate: $97.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: STATEMENT OF WORK TO UPGRADE A 5.56MM SCAMP PRIMER SAFE PACK UNLOADER (SPU) SYSTEM LOCATED IN BUILDING 1 OF LAKE CITY ARMY AMMUNITION PLANT. ALSO INCLUDES DRIVER UPGRADE AND WALL REMOVAL.

Place of Performance

Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $254.1 million to OLIN WINCHESTER LLC for work described as: STATEMENT OF WORK TO UPGRADE A 5.56MM SCAMP PRIMER SAFE PACK UNLOADER (SPU) SYSTEM LOCATED IN BUILDING 1 OF LAKE CITY ARMY AMMUNITION PLANT. ALSO INCLUDES DRIVER UPGRADE AND WALL REMOVAL. Key points: 1. Significant investment in critical ammunition manufacturing equipment. 2. Olin Winchester LLC, a major defense contractor, secured the award. 3. Potential for long-term sustainment and follow-on work. 4. Focus on upgrading existing infrastructure at Lake City Army Ammunition Plant.

Value Assessment

Rating: good

The contract value of $254M for a primer unloader system upgrade appears substantial. Benchmarking against similar specialized manufacturing equipment upgrades is difficult without more specific data, but the duration and scope suggest a fair price for the complexity involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may have impacted price discovery, potentially leading to a higher price than a truly open competition.

Taxpayer Impact: Taxpayers are funding a critical upgrade to national defense manufacturing capabilities, ensuring the continued production of essential ammunition.

Public Impact

Ensures continued production of 5.56mm ammunition, vital for military operations. Supports the modernization of a key defense industrial base facility. Maintains U.S. self-sufficiency in small arms ammunition manufacturing. Potential job creation and economic activity related to the upgrade and sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have inflated costs.
Long contract duration increases risk of cost overruns or scope creep.
Reliance on a single contractor for critical infrastructure.

Positive Signals

Addresses critical need for equipment modernization.
Awarded to an established, experienced contractor.
Firm Fixed Price contract provides cost certainty.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on small arms ammunition manufacturing. Spending in this area is driven by national security needs and modernization efforts for aging facilities and equipment.

Small Business Impact

The awardee, Olin Winchester LLC, is a large business. There is no indication of small business participation in this specific contract, which is common for large-scale, specialized defense manufacturing procurements.

Oversight & Accountability

The contract is managed by the Department of the Army, likely subject to standard DoD oversight mechanisms. The firm fixed price nature provides some cost control, but the long duration warrants close monitoring for performance and potential changes.

Related Government Programs

Small Arms Ammunition Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Limited competition may lead to higher costs.
Long contract duration increases risk of unforeseen issues.
Dependence on a single contractor for critical infrastructure.
Potential for scope creep during the extended performance period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $254.1 million to OLIN WINCHESTER LLC. STATEMENT OF WORK TO UPGRADE A 5.56MM SCAMP PRIMER SAFE PACK UNLOADER (SPU) SYSTEM LOCATED IN BUILDING 1 OF LAKE CITY ARMY AMMUNITION PLANT. ALSO INCLUDES DRIVER UPGRADE AND WALL REMOVAL.

Who is the contractor on this award?

The obligated recipient is OLIN WINCHESTER 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 $254.1 million.

What is the period of performance?

Start: 2020-08-03. End: 2027-09-30.

What specific technological advancements does this SPU system upgrade entail, and how do they improve efficiency or safety compared to the previous system?

The Statement of Work specifies upgrading the 5.56mm Primer Safe Pack Unloader (SPU) system, including driver upgrades and wall removal. While the SOW doesn't detail specific technological advancements, such upgrades typically aim to enhance operational efficiency, improve safety protocols for handling primers, and potentially increase throughput or reliability of the ammunition production line.

Given the 'limited competition' award, what steps were taken to ensure the price was fair and reasonable, and what is the benchmark for similar SPU system upgrades?

The contracting agency likely conducted market research and used historical pricing data or independent cost estimates to determine price reasonableness. Benchmarking is challenging as SPU system upgrades are highly specialized. The 'exclusion of sources' suggests a justification was made for limiting competition, potentially due to unique capabilities or existing infrastructure integration requirements.

What is the long-term strategy for maintaining and supporting this upgraded SPU system, and are there plans for future upgrades or replacements?

The contract runs through September 2027, suggesting a focus on the initial upgrade and potentially some initial operational support. Long-term sustainment strategies would typically be addressed in subsequent contracts or through organic maintenance capabilities. Future upgrade plans depend on technological advancements, evolving operational requirements, and the lifecycle of the equipment.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Olin Corporation

Address: 25201 E 78 HWY, INDEPENDENCE, MO, 64056

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

Financial Breakdown

Contract Ceiling: $254,148,705

Exercised Options: $254,148,705

Current Obligation: $254,148,705

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J19D0085

IDV Type: IDC

Timeline