Department of the Army awards $33.5M contract for ammunition demilitarization, highlighting potential value in disposal services

Contract Overview

Contract Amount: $33,494,469 ($33.5M)

Contractor: Expal USA Inc.

Awarding Agency: Department of Defense

Start Date: 2021-05-20

End Date: 2028-01-31

Contract Duration: 2,447 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEMILITARIZATION OF VARIOUS AMMUNITION

Place of Performance

Location: HOOKS, BOWIE County, TEXAS, 75561

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to EXPAL USA INC. for work described as: DEMILITARIZATION OF VARIOUS AMMUNITION Key points: 1. Contract value of $33.5 million indicates significant investment in safe and compliant ammunition disposal. 2. Full and open competition suggests a robust market for demilitarization services. 3. The contract duration of approximately 6.8 years allows for sustained service delivery and potential cost efficiencies. 4. Fixed-price contract type shifts risk to the contractor, potentially benefiting the government. 5. The award to EXPAL USA INC. positions them as a key player in defense logistics and ordnance management. 6. Geographic location in Texas may point to specific logistical or environmental considerations for demilitarization.

Value Assessment

Rating: good

The contract value of $33.5 million for demilitarization services appears reasonable given the complexity and safety requirements involved in handling various types of ammunition. Benchmarking against similar large-scale ordnance disposal contracts would provide further insight, but the fixed-price nature suggests an effort to control costs. The duration of the contract allows for amortizing setup and operational costs over a longer period, potentially leading to better overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited and submitted proposals. The presence of 7 bidders (as suggested by 'no': 7) demonstrates a healthy competitive environment for these specialized services. This level of competition is generally favorable for price discovery and ensures the government receives competitive offers.

Taxpayer Impact: A competitive bidding process for ammunition demilitarization helps ensure taxpayer funds are used efficiently by driving down costs and encouraging high-quality service delivery.

Public Impact

The Department of Defense benefits from the safe and environmentally sound disposal of surplus or obsolete ammunition. This contract supports national security by managing ordnance responsibly. The services delivered ensure compliance with environmental regulations and safety standards. The primary geographic impact is within Texas, where the contractor is located, potentially involving local logistics and workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for environmental risks if demilitarization processes are not strictly managed.
Ensuring consistent adherence to safety protocols across the contract duration is critical.
Managing the logistics of transporting various types of ammunition to the demilitarization site.

Positive Signals

Full and open competition suggests a market capable of meeting stringent requirements.
Fixed-price contract type provides cost certainty for the government.
Long contract duration allows for specialized expertise development and operational efficiency.

Sector Analysis

The defense logistics and ordnance management sector is critical for military readiness and involves specialized capabilities for handling hazardous materials. This contract for ammunition demilitarization fits within the broader defense services industry, which sees significant government spending. Comparable spending benchmarks would likely be found in contracts related to hazardous waste disposal, munitions manufacturing support, and military base operations.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, EXPAL USA INC., is likely a large business. There is no explicit information on subcontracting plans, but large defense contracts often include provisions for small business participation, which would need to be verified through the contract details.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and potentially the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the firm-fixed-price structure and delivery order requirements. Transparency is generally maintained through contract award databases, though specific operational details of demilitarization processes may be sensitive.

Related Government Programs

Ordnance Demilitarization Services
Ammunition Stockpile Management
Defense Logistics Support
Hazardous Material Disposal
Military Munitions Response Program

Risk Flags

Potential environmental hazards
Safety risks associated with ordnance
Contractor performance reliability
Regulatory compliance adherence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to EXPAL USA INC.. DEMILITARIZATION OF VARIOUS AMMUNITION

Who is the contractor on this award?

The obligated recipient is EXPAL USA 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 $33.5 million.

What is the period of performance?

Start: 2021-05-20. End: 2028-01-31.

What is EXPAL USA INC.'s track record with similar defense contracts, particularly in ordnance demilitarization?

Information regarding EXPAL USA INC.'s specific track record with defense contracts, especially in ordnance demilitarization, would require a deeper dive into contract databases and performance reports. However, being awarded a contract of this magnitude by the Department of the Army suggests they possess the necessary certifications, experience, and capacity to handle such sensitive operations. Further investigation into past performance evaluations and any reported issues or commendations would provide a more comprehensive understanding of their reliability and expertise in this specialized field. It's crucial to assess if they have successfully managed similar projects in terms of scope, safety, and environmental compliance.

How does the $33.5 million contract value compare to historical spending on ammunition demilitarization by the Department of the Army?

To assess the $33.5 million contract value against historical spending, one would need to analyze prior Department of the Army contracts for ammunition demilitarization. This would involve querying databases for similar services over the past 5-10 years, noting contract values, scopes of work, and durations. If this contract represents a significant increase or decrease compared to previous average contract values, it could indicate shifts in demand, pricing, or the availability of service providers. For instance, a higher value might suggest increased needs for disposal or more complex requirements, while a lower value could point to improved efficiency or increased competition. Without specific historical data, it's difficult to definitively benchmark this award.

What are the primary risks associated with this ammunition demilitarization contract, and how are they being mitigated?

The primary risks associated with this ammunition demilitarization contract revolve around safety and environmental compliance. Mishandling or improper disposal of ammunition can lead to accidents, injuries, and environmental contamination. Mitigation strategies likely include stringent adherence to safety protocols, specialized training for personnel, robust environmental monitoring, and compliance with all relevant federal, state, and local regulations. The firm-fixed-price contract structure also incentivizes the contractor to manage risks effectively to maintain profitability. Furthermore, the Department of the Army's oversight and inspection processes are critical for ensuring these risks are adequately controlled throughout the contract's performance period.

What is the expected effectiveness of the demilitarization services under this contract in terms of environmental impact and safety?

The expected effectiveness of the demilitarization services hinges on the contractor's adherence to best practices and regulatory standards. Effective demilitarization ensures that ammunition is rendered inert and safe for disposal, preventing accidental detonation or misuse. Environmentally, effective processes minimize the release of hazardous substances into the soil, water, and air. The Department of the Army likely includes specific performance metrics and environmental compliance requirements within the contract to measure and ensure effectiveness. Regular audits and inspections by government representatives would verify that the contractor is meeting these standards, thereby safeguarding both personnel and the environment.

How has the number of bidders (7) for this contract influenced the final award price and terms?

Having seven bidders for this ammunition demilitarization contract suggests a competitive marketplace, which generally benefits the government by driving down prices and improving the quality of proposals. A higher number of bidders typically leads to more aggressive pricing as companies vie for the award. It also increases the likelihood that the government will receive innovative solutions or more favorable terms. The final award price is likely a result of this competitive pressure, potentially offering better value for taxpayer money compared to a sole-source or limited-competition scenario. The government's evaluation process would have weighed technical merit alongside price to determine the best overall value.

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: 690 N ELLIS, HOOKS, TX, 75561

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

Financial Breakdown

Contract Ceiling: $33,494,469

Exercised Options: $33,494,469

Current Obligation: $33,494,469

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $401,360

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J21D0026

IDV Type: IDC

Timeline