DoD awards $23.3M contract for M940 MPT-SD ammunition to General Dynamics

Contract Overview

Contract Amount: $23,344,775 ($23.3M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-09-22

End Date: 2025-09-30

Contract Duration: 1,834 days

Daily Burn Rate: $12.7K/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 20MM M940 MPT-SD (AC34).

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $23.3 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: THIS DO IS FOR THE PROCUREMENT OF 20MM M940 MPT-SD (AC34). Key points: 1. Contract awarded through full and open competition, indicating a competitive bidding process. 2. The contract is for ammunition manufacturing, a critical component for military readiness. 3. Performance period extends over 1834 days, suggesting a long-term supply need. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. The procurement is managed by the Department of the Army, a major DoD component. 6. The North American Industry Classification System (NAICS) code 332993 points to ammunition manufacturing.

Value Assessment

Rating: good

The contract value of $23.3 million for M940 MPT-SD ammunition appears reasonable given the duration and nature of the product. Without specific per-unit cost data or comparable contract benchmarks, a precise value-for-money assessment is challenging. However, the firm fixed-price structure suggests the government has secured a predictable cost, transferring potential overruns to the contractor. Further analysis would require benchmarking against similar ammunition procurements or historical pricing for this specific munition.

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,' which implies that while the competition was open, specific sources may have been excluded based on pre-defined criteria. The presence of multiple bidders, though not explicitly stated in the provided data, is generally expected under such a competitive framework. This approach aims to ensure fair pricing and access to a broad range of qualified suppliers.

Taxpayer Impact: A competitive bidding process like this generally benefits taxpayers by fostering price discovery and encouraging contractors to offer their best pricing to win the award.

Public Impact

The primary beneficiaries are the U.S. Army, receiving essential ammunition for its operations. The contract ensures the supply of M940 MPT-SD (AC34) ammunition, vital for training and combat readiness. The contract is being performed in Illinois, potentially impacting the local workforce and economy in that state. This procurement supports the defense industrial base, specifically the ammunition manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for a critical munition could pose supply chain risks.
The exclusion of sources, even if justified, might limit the pool of potential suppliers and innovation.

Positive Signals

Firm Fixed Price contract structure provides cost certainty for the government.
Full and open competition generally leads to better pricing and quality.
Long contract duration (over 4 years) suggests a stable and predictable supply chain.

Sector Analysis

The defense sector, particularly the ammunition manufacturing sub-sector, is characterized by high barriers to entry due to specialized knowledge, capital investment, and stringent quality control requirements. This contract falls under the broader category of defense manufacturing, which is a significant part of the U.S. industrial base. Comparable spending benchmarks would involve analyzing other large-volume ammunition procurements by the Department of Defense, which often run into tens or hundreds of millions of dollars annually.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside. This suggests that the contract was not specifically targeted towards small businesses. Consequently, the primary contractor, General Dynamics, will likely be responsible for managing the supply chain, and any subcontracting opportunities for small businesses would be at their discretion, rather than mandated by the contract terms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the Firm Fixed Price contract type, which holds the contractor responsible for cost overruns. Transparency is facilitated through contract databases like FPDS, where such awards are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Ammunition Systems
General Dynamics Ordnance & Tactical Systems Contracts
Defense Manufacturing Industrial Base

Risk Flags

Potential supply chain disruption risk due to single awardee.
Long-term contract duration may not account for future technological advancements.
Competition level 'after exclusion of sources' warrants further investigation into exclusion criteria.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.3 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. THIS DO IS FOR THE PROCUREMENT OF 20MM M940 MPT-SD (AC34).

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 $23.3 million.

What is the period of performance?

Start: 2020-09-22. End: 2025-09-30.

What is the historical spending pattern for M940 MPT-SD ammunition by the Department of the Army?

Analyzing historical spending for the M940 MPT-SD ammunition requires access to detailed procurement data over multiple fiscal years. The current award of $23.3 million represents a significant single procurement action. To understand the pattern, one would need to aggregate all previous awards for this specific munition, noting quantities, unit prices, and contract types. This would reveal trends in demand, pricing fluctuations, and the consistency of the supply chain. For instance, if previous awards were smaller or less frequent, this current large award might indicate an increased operational tempo or a strategic stock-up. Conversely, if this award is in line with previous large procurements, it suggests a stable, ongoing requirement. Without this historical context, it's difficult to gauge if the current spending is anomalous or typical for this munition.

How does the unit cost of this ammunition compare to similar munitions procured by the DoD?

A precise unit cost comparison is not possible with the provided data, as only the total contract value and duration are given. To perform this analysis, the total contract value ($23,344,774.80) would need to be divided by the total quantity of ammunition procured. This unit cost would then be benchmarked against publicly available data for similar munitions, such as other types of medium-caliber ammunition (e.g., 25mm, 30mm rounds) or even small-arms ammunition if the scale of production is comparable. Factors like material costs, manufacturing complexity, and technological advancements significantly influence unit prices. If the unit cost for the M940 MPT-SD is substantially higher or lower than comparable items, it could indicate exceptional value, potential overpricing, or unique performance characteristics.

What are the specific risks associated with General Dynamics Ordnance & Tactical Systems, Inc. as the sole awardee for this contract?

While the contract was awarded under 'full and open competition after exclusion of sources,' General Dynamics is the sole awardee for this specific delivery order. The primary risk associated with a single awardee for a critical item like ammunition is supply chain vulnerability. If General Dynamics faces production issues, labor strikes, raw material shortages, or other disruptions, the entire supply of M940 MPT-SD ammunition could be jeopardized, impacting military readiness. Another risk is potential price escalation in future contracts if competition is not robustly re-established. Furthermore, over-reliance on a single supplier can reduce the government's leverage in negotiations and potentially stifle innovation from other manufacturers who are not part of the supply chain for this specific munition.

What is the assessed performance history of General Dynamics Ordnance & Tactical Systems, Inc. on similar defense contracts?

Assessing the performance history of General Dynamics Ordnance & Tactical Systems, Inc. on similar defense contracts would typically involve reviewing their past performance evaluations, such as Contractor Performance Assessment Reporting System (CPARS) data. This data, often proprietary or accessible through specific government portals, provides insights into a contractor's track record regarding quality, timeliness, cost control, and management. For a contract involving ammunition manufacturing, key performance indicators would include defect rates, on-time delivery metrics, and adherence to specifications. A positive performance history suggests reliability and reduces the perceived risk for the government. Conversely, a history of poor performance might warrant closer scrutiny, increased oversight, or consideration of alternative suppliers for future procurements.

How does the duration of this contract (1834 days) align with typical procurement cycles for ammunition?

A contract duration of 1834 days, approximately five years, is relatively common for major defense procurements, especially for items like ammunition where production runs can be lengthy and demand is sustained. This duration allows for stable production planning, efficient resource allocation by the contractor, and ensures a consistent supply for the military over a significant period. Shorter contracts might be used for urgent, smaller-quantity needs or during periods of rapid technological change. Longer durations, like this one, often indicate a mature technology and a predictable requirement. The firm fixed-price nature combined with a long duration suggests the government has locked in pricing for an extended period, which can be advantageous if market prices are expected to rise.

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: $23,344,775

Exercised Options: $23,344,775

Current Obligation: $23,344,775

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $7,546,095

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