Army Awards $29M for 25MM Target Practice Cartridges to General Dynamics

Contract Overview

Contract Amount: $29,026,261 ($29.0M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-09-13

End Date: 2025-01-31

Contract Duration: 871 days

Daily Burn Rate: $33.3K/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: AWARD OF FY22 REQUIREMENT OF 25MM PGU-23/U TARGET PRACTICE CARTRIDGES, NSN:1305-01-210-6802

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: AWARD OF FY22 REQUIREMENT OF 25MM PGU-23/U TARGET PRACTICE CARTRIDGES, NSN:1305-01-210-6802 Key points: 1. Spending on ammunition manufacturing is a consistent defense need. 2. General Dynamics is a major defense contractor with significant market share. 3. Potential risks include supply chain disruptions and price volatility for raw materials. 4. The sector is characterized by high barriers to entry and specialized production.

Value Assessment

Rating: good

The award of $29.03 million for PGU-23/U cartridges appears reasonable given the quantity and the firm fixed price contract type. Benchmarking against similar ammunition contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' suggesting a competitive process but with specific source limitations. This method may impact price discovery compared to unrestricted full and open competition.

Taxpayer Impact: Taxpayer funds are being used for essential military training ammunition, ensuring readiness.

Public Impact

Ensures readiness for military training exercises. Supports domestic manufacturing capabilities for defense articles. Contributes to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may not yield the best price.
Reliance on a single supplier for specific components.
Potential for cost overruns if material prices increase.

Positive Signals

Firm fixed price contract provides cost certainty.
Long-term contract supports production stability.
Awarded to a reputable defense contractor.

Sector Analysis

The ammunition manufacturing sector is critical for defense readiness, with significant government contracts driving demand. Spending benchmarks vary widely based on specific munition types and quantities.

Small Business Impact

This contract was not awarded to a small business. The defense industrial base often relies on large, specialized manufacturers for complex munitions.

Oversight & Accountability

The Department of the Army's contracting process, including the use of competitive procedures, is subject to oversight by the Government Accountability Office (GAO) and the Department of Defense's Inspector General.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Limited competition
Supply chain vulnerability
Price volatility of raw materials
Dependence on specific manufacturing capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. AWARD OF FY22 REQUIREMENT OF 25MM PGU-23/U TARGET PRACTICE CARTRIDGES, NSN:1305-01-210-6802

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 $29.0 million.

What is the period of performance?

Start: 2022-09-13. End: 2025-01-31.

What is the historical pricing trend for PGU-23/U cartridges, and how does this award compare?

Analyzing historical contract awards for PGU-23/U cartridges is crucial to assess if the current $29.03 million award represents a fair market price. Without historical data, it's difficult to definitively state if this represents value for money. However, the firm fixed price nature of the contract offers some protection against future price increases.

What specific factors led to the exclusion of other sources in this 'Full and Open Competition After Exclusion of Sources' award?

The exclusion of sources typically occurs when only a limited number of responsible contractors can fulfill the requirement due to technical specifications, proprietary technology, or unique manufacturing capabilities. Understanding these specific factors is key to assessing if the competition was truly maximized within the given constraints.

How does the unit cost of these cartridges compare to similar training munitions used by allied nations?

Comparing the unit cost of PGU-23/U cartridges to similar training munitions used by allied nations can provide an international benchmark for cost-effectiveness. Differences in material costs, manufacturing processes, and economies of scale can influence these comparisons, impacting the overall assessment of 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 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: $29,026,261

Exercised Options: $29,026,261

Current Obligation: $29,026,261

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $12,951,583

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