DoD awards $34.3M for conventional ammunition demilitarization, with 7 bids received

Contract Overview

Contract Amount: $34,372,539 ($34.4M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-05-20

End Date: 2024-07-10

Contract Duration: 1,147 days

Daily Burn Rate: $30.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEMIL OF VARIOUS FAMILIES OF CONVENTIONAL AMMO.

Place of Performance

Location: CARTHAGE, JASPER County, MISSOURI, 64836

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $34.4 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: DEMIL OF VARIOUS FAMILIES OF CONVENTIONAL AMMO. Key points: 1. Contract value represents a significant investment in munitions lifecycle management. 2. Competition dynamics suggest a healthy market for specialized demilitarization services. 3. Potential risks include environmental compliance and safe disposal of hazardous materials. 4. Performance context is critical for ensuring timely and safe demilitarization of aging stockpiles. 5. This contract positions the DoD to manage its conventional ammunition inventory effectively.

Value Assessment

Rating: good

The contract value of $34.3 million for demilitarization services appears reasonable given the scope of work. Benchmarking against similar contracts for ammunition disposal is challenging due to the specialized nature of the services and varying quantities and types of munitions. However, the firm fixed-price structure provides cost certainty for the government. The number of bids received (7) suggests competitive pricing was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The receipt of 7 bids suggests a robust level of competition for this specialized service. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: The full and open competition and multiple bids indicate that taxpayer dollars are likely being used efficiently, as the government received a range of offers to choose from, fostering a competitive environment that drives down prices.

Public Impact

The Department of Defense benefits from the safe and compliant demilitarization of its conventional ammunition stockpile. Services delivered include the safe dismantling and disposal of various types of conventional munitions. The geographic impact is primarily within the United States, where demilitarization facilities are located. Workforce implications include employment opportunities for skilled technicians and environmental specialists in the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Environmental compliance risks associated with the disposal of potentially hazardous materials.
Ensuring the safe handling and transportation of decommissioned munitions.
Potential for unforeseen costs if munitions are found to be more complex to demilitarize than initially assessed.

Positive Signals

Firm fixed-price contract structure provides cost predictability.
Robust competition with 7 bidders suggests market interest and potential for competitive pricing.
Contract duration of over three years allows for sustained management of demilitarization efforts.

Sector Analysis

The defense industrial base includes a segment focused on the lifecycle management of munitions, including demilitarization. This contract falls within the broader category of defense manufacturing and services. The market for specialized ammunition demilitarization is relatively niche, requiring specific expertise and facilities to handle hazardous materials safely and in compliance with environmental regulations. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of each demilitarization project.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, and the prime contractor, General Dynamics Ordnance and Tactical Systems, Inc., is a large business. There is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether General Dynamics engages small businesses for specialized support services related to the demilitarization process.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Army, under the Department of Defense. Accountability measures would include adherence to contract terms, performance standards, and environmental regulations. Transparency is facilitated through contract award data made public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Stockpile Management
Environmental Compliance and Remediation Services
Ordnance Disposal and Demilitarization
Conventional Ammunition Lifecycle Management

Risk Flags

Environmental Compliance
Safety Protocols
Munitions Stability
Hazardous Material Disposal

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.4 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. DEMIL OF VARIOUS FAMILIES OF CONVENTIONAL AMMO.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE AND 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 $34.4 million.

What is the period of performance?

Start: 2021-05-20. End: 2024-07-10.

What is the historical spending trend for ammunition demilitarization by the Department of the Army?

Analyzing historical spending on ammunition demilitarization by the Department of the Army requires access to detailed budget and contract data over multiple fiscal years. Generally, such spending fluctuates based on the volume of munitions reaching their end-of-life, changes in military readiness requirements, and the availability of demilitarization facilities and contractors. Factors like geopolitical events and shifts in defense strategy can also influence the need for demilitarization. Without specific historical data for this particular type of demilitarization, it's difficult to provide precise figures. However, it is a consistent requirement within the DoD's operational lifecycle management to ensure safety and environmental compliance.

How does the number of bids (7) compare to typical competition levels for similar defense contracts?

A full and open competition yielding 7 bids for a specialized service like ammunition demilitarization is generally considered a healthy level of competition within the defense contracting landscape. While some large-scale, broadly defined contracts might attract dozens of bidders, niche technical services often see fewer, but still robust, responses. The number 7 suggests that the market has sufficient capacity and interest to support competitive bidding for this type of work. It indicates that the solicitation was likely well-publicized and that the requirements were clear enough for multiple capable firms to pursue the opportunity, which is favorable for price discovery and value for the government.

What are the primary risks associated with demilitarizing conventional ammunition?

The primary risks associated with demilitarizing conventional ammunition are multifaceted and significant. Safety is paramount, as munitions can be unstable and pose explosion hazards during dismantling. Environmental risks are also substantial, involving the proper handling and disposal of propellants, explosives, and potentially hazardous chemical residues to prevent soil and water contamination. Compliance with stringent federal, state, and local environmental regulations is critical and can lead to penalties if not met. Furthermore, there are logistical risks related to the transportation of munitions to demilitarization sites and the potential for unforeseen technical challenges with specific munition types that may require specialized procedures or equipment, impacting timelines and costs.

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

General Dynamics Ordnance and Tactical Systems, Inc. (GD-OTS) has a well-established track record as a major defense contractor, particularly in the realm of munitions, ordnance, and tactical systems. They are known for manufacturing and supporting a wide array of defense products. In terms of contract fulfillment, GD-OTS generally has a history of delivering on complex defense requirements. Their experience spans production, sustainment, and lifecycle support for various military platforms and munitions. While specific performance metrics for every contract are not publicly detailed, their continued success in securing significant defense contracts, including this demilitarization award, suggests a consistent ability to meet government specifications and delivery schedules.

How does the firm fixed-price contract type influence the government's risk exposure?

A firm fixed-price (FFP) contract type is generally favored by the government when the scope of work is well-defined and risks can be reasonably estimated. Under an FFP agreement, the contractor assumes the majority of the financial risk. This means that the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. If their costs exceed the fixed price, they absorb the loss. Conversely, if their costs are lower, they realize a higher profit. For the government, this structure provides cost certainty and predictability, minimizing the risk of cost overruns. However, it can also incentivize contractors to cut corners if not properly monitored, making performance oversight crucial.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11399 16TH CT N STE 200, SAINT PETERSBURG, FL, 33716

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: $34,372,539

Exercised Options: $34,372,539

Current Obligation: $34,372,539

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $80,663

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J21D0024

IDV Type: IDC

Timeline