DoD awards $130M for bomb kits, with General Dynamics securing a sole-source contract

Contract Overview

Contract Amount: $130,161,422 ($130.2M)

Contractor: General Dynamics Ordnance and Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-06-08

End Date: 2024-10-31

Contract Duration: 876 days

Daily Burn Rate: $148.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS AWARD IS TO ISSUE REQUIREMENTS FOR THE MK80 SERIES GENERAL PURPOSE BOMB KITS - WHICH CONSISTS OF THE MK81-1 BOMB BODY, MK82-1 BOMB BODY, MK84-4 BOMB BODY, MK3-0 SUSPENSION LUG, MS3314 SUSPENSION LUGS, ALUMINUM POWDER AND TNT.

Place of Performance

Location: GARLAND, DALLAS County, TEXAS, 75040

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $130.2 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC. for work described as: THIS AWARD IS TO ISSUE REQUIREMENTS FOR THE MK80 SERIES GENERAL PURPOSE BOMB KITS - WHICH CONSISTS OF THE MK81-1 BOMB BODY, MK82-1 BOMB BODY, MK84-4 BOMB BODY, MK3-0 SUSPENSION LUG, MS3314 SUSPENSION LUGS, ALUMINUM POWDER AND TNT. Key points: 1. The contract focuses on essential components for general-purpose bomb kits, indicating a critical need for munitions. 2. A sole-source award suggests potential limitations in market competition or unique capabilities required. 3. The duration of the contract (over 2 years) points to sustained demand for these ordnance components. 4. The fixed-price nature of the contract provides cost certainty for the government. 5. The award is managed by the Department of the Army, highlighting its role in equipping forces. 6. The specific bomb bodies (MK81, MK82, MK84) suggest a range of ordnance capabilities are being provisioned.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific cost breakdowns or comparisons to similar sole-source awards for bomb kits. The total award amount of $130 million over approximately two years suggests a significant investment in munitions. However, the lack of competition raises concerns about whether the pricing reflects the best possible value for the taxpayer. Further analysis would require access to detailed cost data and historical pricing for comparable items.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Ordnance and Tactical Systems, Inc., was solicited. This approach is typically used when a unique capability is required, or when only one responsible source can fulfill the requirement. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This necessitates robust government oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. Army and potentially other branches of the Department of Defense, receiving critical components for aerial munitions. The services delivered involve the manufacturing and supply of bomb bodies and associated kits for general-purpose bombs. The geographic impact is primarily within Texas, where General Dynamics Ordnance and Tactical Systems, Inc. is located, but the ultimate impact is on national defense capabilities. Workforce implications include employment at General Dynamics' facilities involved in the production of these ordnance components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could mask inefficiencies.
Dependence on a single supplier for critical munitions components poses a supply chain risk.
The specific nature of ordnance manufacturing may limit the pool of qualified suppliers.

Positive Signals

Contract ensures availability of critical munitions components for national defense.
General Dynamics is an established defense contractor with a track record in ordnance production.
Fixed-price contract provides budget predictability for the Department of Defense.
The award supports domestic manufacturing capabilities within the defense industrial base.

Sector Analysis

This contract falls within the Ammunition (except Small Arms) Manufacturing sector, a critical part of the defense industrial base. The market for such specialized ordnance components is often concentrated among a few key defense contractors. General Dynamics Ordnance and Tactical Systems, Inc. is a significant player in this niche. The total federal spending on ammunition manufacturing can fluctuate based on geopolitical events and military readiness requirements, but it represents a consistent and substantial segment of defense procurement.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large defense contractor, the direct impact on the small business ecosystem is likely minimal, unless General Dynamics has established subcontracting relationships with small businesses for specific components or services not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which shifts some risk to the contractor. Transparency is limited due to the sole-source nature, but contract awards are generally reported. The Inspector General for the Department of Defense would have jurisdiction over any allegations of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
General Purpose Bomb Production
Ordnance Manufacturing Contracts
Army Aviation Support
Defense Industrial Base Sustainment

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for elevated pricing
Supply chain dependency on a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $130.2 million to GENERAL DYNAMICS ORDNANCE AND TACTICAL SYSTEMS, INC.. THIS AWARD IS TO ISSUE REQUIREMENTS FOR THE MK80 SERIES GENERAL PURPOSE BOMB KITS - WHICH CONSISTS OF THE MK81-1 BOMB BODY, MK82-1 BOMB BODY, MK84-4 BOMB BODY, MK3-0 SUSPENSION LUG, MS3314 SUSPENSION LUGS, ALUMINUM POWDER AND TNT.

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 $130.2 million.

What is the period of performance?

Start: 2022-06-08. End: 2024-10-31.

What is the historical spending pattern for MK80 series bomb kits by the Department of Defense?

Analyzing historical spending on MK80 series bomb kits requires accessing detailed procurement data over multiple fiscal years. Typically, such spending would be categorized under ammunition or ordnance procurement. Factors influencing spending include operational tempo, inventory levels, modernization programs, and geopolitical demands. A review of past contracts awarded to General Dynamics and other potential suppliers for similar bomb components would reveal trends in volume, pricing, and contract types. Without specific historical data, it's difficult to ascertain if the current $130 million award represents an increase, decrease, or stable level of investment compared to previous periods. However, the sustained need for these fundamental munitions suggests a consistent, albeit potentially variable, budget allocation.

How does the unit cost of components in this contract compare to similar items procured competitively?

Directly comparing the unit cost of components within this sole-source award to competitively procured items is challenging without detailed cost breakdowns. Sole-source contracts often lack the price discovery mechanism inherent in competitive bidding, potentially leading to higher unit costs. To assess value, one would need to benchmark against similar bomb bodies (e.g., MK81, MK82, MK84) procured under full and open competition by the DoD or allied nations. If comparable competitive contracts exist, their unit prices, adjusted for inflation and quantity, would serve as a benchmark. The absence of such a benchmark in the provided data makes a definitive value-for-money assessment difficult, suggesting a 'fair' or 'questionable' rating might be appropriate pending further investigation.

What are the specific risks associated with a sole-source award for critical munitions components?

The primary risks associated with a sole-source award for critical munitions components like the MK80 series bomb kits include elevated costs due to lack of competition, potential for complacency from the sole supplier regarding innovation or efficiency, and significant supply chain vulnerability. If General Dynamics faces production issues, capacity constraints, or business disruptions, the DoD has limited alternative sources to turn to quickly. This dependence can impact readiness and operational capabilities. Furthermore, the absence of competitive pressure might reduce the incentive for the contractor to invest in process improvements or cost-saving measures, potentially leading to sustained higher prices over the contract's life.

What is General Dynamics Ordnance and Tactical Systems, Inc.'s track record with similar DoD contracts?

General Dynamics Ordnance and Tactical Systems, Inc. (GD-OTS) has a well-established track record as a major supplier of munitions and ordnance systems to the U.S. Department of Defense and allied nations. They are known for producing a wide range of products, including bomb bodies, artillery shells, and other energetic materials. Their history with the DoD includes numerous contracts, often awarded competitively, for various ordnance requirements. GD-OTS is generally considered a reliable supplier within the defense industrial base. However, like any large contractor, specific contract performance can vary, and a detailed review of their past performance ratings on similar large-scale ordnance contracts would provide a more granular assessment.

What is the strategic importance of the MK80 series bomb kits to current military operations?

The MK80 series bomb kits are fundamental components for a wide array of general-purpose bombs used extensively by U.S. and allied air forces. These bombs are versatile, relatively low-cost, and can be configured with various guidance kits (like Paveway or JDAM) to achieve precision strike capabilities. The MK81, MK82, MK83, and MK84 variants represent different weight classes, offering flexibility for different mission requirements, from close air support to deep interdiction. Ensuring a steady supply of these basic bomb bodies and their associated kits is crucial for maintaining airpower readiness, supporting ongoing combat operations, and replenishing inventories. Their strategic importance lies in their ubiquity, adaptability, and cost-effectiveness as a primary aerial munition.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1200 N GLENBROOK DR, GARLAND, TX, 75040

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: $130,161,422

Exercised Options: $130,161,422

Current Obligation: $130,161,422

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $63,302,963

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J19D0015

IDV Type: IDC

Timeline