DoD Awards Olin Winchester $310M for Ammunition Production Through 2026
Contract Overview
Contract Amount: $309,756,353 ($309.8M)
Contractor: Olin Winchester, LLC
Awarding Agency: Department of Defense
Start Date: 2021-03-15
End Date: 2026-12-31
Contract Duration: 2,117 days
Daily Burn Rate: $146.3K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: MANUFACTURE OF 5.56MM, 7.62MM, AND CALIBER .50 AMMUNITION.
Place of Performance
Location: OXFORD, LAFAYETTE County, MISSISSIPPI, 38655
Plain-Language Summary
Department of Defense obligated $309.8 million to OLIN WINCHESTER, LLC for work described as: MANUFACTURE OF 5.56MM, 7.62MM, AND CALIBER .50 AMMUNITION. Key points: 1. Significant contract value highlights sustained demand for small arms ammunition. 2. Olin Winchester, a major player, dominates this niche market. 3. Potential risks include supply chain disruptions and price volatility for raw materials. 4. Spending falls within the defense manufacturing sector, characterized by long-term procurement cycles.
Value Assessment
Rating: good
The contract's fixed-price with economic price adjustment structure aims to balance cost control with market fluctuations. Benchmarking against similar large-scale ammunition procurements suggests this pricing is competitive given the scale and duration.
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 scenario. This approach may impact price discovery by restricting the pool of potential bidders.
Taxpayer Impact: Taxpayer funds are allocated for essential defense materiel, with the contract aiming for cost efficiency through its pricing structure.
Public Impact
Ensures continued supply of critical ammunition for military operations. Supports domestic manufacturing capabilities within the defense industrial base. Potential for job creation and economic activity in Mississippi. Price adjustments could lead to increased costs if raw material prices surge.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may lead to suboptimal pricing.
- Economic price adjustment introduces cost uncertainty.
- Dependence on a single contractor for a critical defense item.
Positive Signals
- Secures a vital supply chain for the U.S. Army.
- Long-term contract provides stability for the manufacturer.
- Potential for future innovation in ammunition technology.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically small arms ammunition. Spending benchmarks for similar long-term, high-volume ammunition procurements are typically in the hundreds of millions of dollars, aligning with this award.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as Olin Winchester, LLC is a large corporation. There is no indication of subcontracting opportunities for small businesses within this specific award notice.
Oversight & Accountability
The contract's 'Full and Open Competition After Exclusion of Sources' suggests a specific justification for limiting bidders. Further review of the exclusion rationale and ongoing performance monitoring are key oversight areas.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for price increases due to economic price adjustment.
- Limited competition may reduce cost-saving opportunities.
- Supply chain vulnerabilities for raw materials.
- Dependence on a single supplier for critical defense needs.
Tags
small-arms-ammunition-manufacturing, department-of-defense, ms, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $309.8 million to OLIN WINCHESTER, LLC. MANUFACTURE OF 5.56MM, 7.62MM, AND CALIBER .50 AMMUNITION.
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 $309.8 million.
What is the period of performance?
Start: 2021-03-15. End: 2026-12-31.
What is the specific justification for excluding other sources in this 'Full and Open Competition After Exclusion of Sources' award?
The justification for excluding other sources typically relates to unique capabilities, existing infrastructure, or specific security requirements that only the awarded contractor can meet. Detailed documentation within the contract file would outline the precise reasons, ensuring that the exclusion serves a legitimate government interest and does not unduly restrict competition.
How will the economic price adjustment clause be monitored to mitigate taxpayer risk from fluctuating material costs?
The economic price adjustment (EPA) clause is usually tied to specific, verifiable indices for raw materials (e.g., metals, propellants). The Department of Defense will monitor these indices and the contractor's actual cost data. Any adjustments must be substantiated and fall within pre-defined parameters to prevent excessive cost increases and ensure fair pricing.
What are the performance metrics and quality assurance measures in place to ensure the effectiveness and reliability of the manufactured ammunition?
Performance metrics likely include on-time delivery, adherence to strict quality specifications (e.g., NATO standards), and defect rates. Robust quality assurance processes, including government inspections and testing at various production stages, are critical. Failure to meet these standards could result in contract penalties or termination.
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
Solicitation ID: W52P1J20R0046
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 33 COUNTY ROAD 166, OXFORD, MS, 38655
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $309,756,353
Exercised Options: $309,756,353
Current Obligation: $309,756,353
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-03-15
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 12:12:00
Last Modified: 2025-12-22
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