Department of the Army awarded $123.3M contract for 50 million rounds of 5.56mm ammunition to miscellaneous foreign awardees

Contract Overview

Contract Amount: $12,331,700 ($12.3M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of Defense

Start Date: 2007-12-08

End Date: 2007-12-08

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: {PIIN: W91GY008C0005} 50 MILLON ROUNDS OF 5.56MM AMMUNITION

Plain-Language Summary

Department of Defense obligated $12.3 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: {PIIN: W91GY008C0005} 50 MILLON ROUNDS OF 5.56MM AMMUNITION Key points: 1. Contract awarded under firm fixed price terms, indicating clear cost expectations. 2. Full and open competition suggests a broad market search for the best value. 3. The contract's duration is a single day, implying a specific, immediate need. 4. Award to 'miscellaneous foreign awardees' raises questions about supply chain origin and oversight. 5. The sheer volume of ammunition procured highlights significant operational requirements. 6. Lack of small business participation noted, suggesting focus on large-scale foreign suppliers.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the specific nature of military ammunition procurement and the 'miscellaneous foreign awardees' designation. Without detailed cost breakdowns or comparisons to similar foreign military sales or direct procurements, assessing the price against market rates or similar contracts is difficult. The firm fixed price suggests the government accepted the offered price, but the value proposition hinges on the quality and reliability of the ammunition from these specific foreign sources.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of the Army sought bids from all responsible sources. The number of bidders is not specified, but the designation of 'miscellaneous foreign awardees' suggests that the competition may have been structured to attract international suppliers. This broad approach aims to ensure a competitive environment, potentially leading to better pricing and availability.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple suppliers to offer their best prices, increasing the likelihood of securing goods at a competitive rate.

Public Impact

The primary beneficiaries are military units requiring 5.56mm ammunition for training and operational readiness. Services delivered include the supply of a large quantity of essential ammunition. Geographic impact is global, as the ammunition will be used by Army forces wherever deployed. Workforce implications are indirect, potentially supporting manufacturing jobs in the countries of the foreign awardees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on 'miscellaneous foreign awardees' introduces potential supply chain risks and geopolitical considerations.
Lack of specific contractor identification hinders assessment of past performance and reliability.
The single-day duration raises questions about the logistics and delivery timeline for such a large quantity.

Positive Signals

Awarded under full and open competition, suggesting a structured procurement process.
Firm fixed price contract provides cost certainty for the government.
Procurement of a critical warfighting resource ensures operational readiness.

Sector Analysis

This contract falls within the defense sector, specifically focusing on the procurement of ammunition. The defense industry is characterized by large-scale, high-value contracts often involving specialized manufacturing and global supply chains. Benchmarking this specific ammunition purchase against broader defense spending requires analyzing trends in munitions procurement, which can fluctuate based on geopolitical events and military readiness requirements.

Small Business Impact

The data indicates that this contract did not involve small business set-asides, nor does it appear to have specific subcontracting requirements for small businesses mentioned. Given the nature of ammunition manufacturing and the award to 'miscellaneous foreign awardees,' it is unlikely that small businesses played a direct role in fulfilling this specific contract. The focus was likely on large-scale production capabilities available internationally.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and inspection processes. Given the foreign awardees, additional oversight may involve diplomatic channels and host nation agreements. Transparency is facilitated by the contract award notice, but detailed oversight mechanisms for foreign suppliers and the specific quality assurance processes for the ammunition are not detailed in the provided data.

Related Government Programs

Department of Defense Ammunition Procurement
Foreign Military Sales
Small Arms Ammunition Contracts
Defense Logistics Agency (DLA) Contracts

Risk Flags

Supply Chain Risk (Foreign Sources)
Quality Assurance Concerns (Foreign Sources)
Geopolitical Instability Impact
Lack of Specific Contractor Identification
Potential for Substandard Materials

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to MISCELLANEOUS FOREIGN AWARDEES. {PIIN: W91GY008C0005} 50 MILLON ROUNDS OF 5.56MM AMMUNITION

Who is the contractor on this award?

The obligated recipient is MISCELLANEOUS FOREIGN AWARDEES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $12.3 million.

What is the period of performance?

Start: 2007-12-08. End: 2007-12-08.

What is the typical lead time for procuring 50 million rounds of 5.56mm ammunition from foreign sources?

The typical lead time for procuring such a large quantity of ammunition can vary significantly based on the manufacturer's existing production capacity, raw material availability, and the specific terms negotiated in the contract. For foreign awardees, factors like shipping logistics, customs clearance, and geopolitical stability in the region of origin also play a crucial role. While this contract has a single-day award date, the actual delivery timeline could range from several weeks to many months. Without specific delivery clauses or further details on the awardees' production capabilities, it's difficult to pinpoint an exact lead time. However, historical data on large-scale ammunition procurements suggests that fulfilling such an order often requires substantial planning and execution over an extended period.

How does the unit cost of this ammunition compare to domestically produced 5.56mm ammunition?

Directly comparing the unit cost of this contract to domestically produced ammunition is challenging without knowing the exact price per round. The total award amount of $123.3 million for 50 million rounds suggests a price of approximately $2.47 per round. This figure needs to be compared against the cost of similar ammunition procured from U.S. manufacturers, which can fluctuate based on market conditions, production scale, and specific quality standards. Historically, foreign-sourced ammunition can sometimes be cheaper due to lower labor costs or different regulatory environments, but this can be offset by shipping, import duties, and potential quality control concerns. A comprehensive analysis would require benchmarking against recent domestic contracts for comparable ammunition types and quantities.

What are the specific risks associated with awarding ammunition contracts to 'miscellaneous foreign awardees'?

Awarding ammunition contracts to 'miscellaneous foreign awardees' presents several risks. Firstly, supply chain security and reliability can be compromised; the origin and quality control processes of these suppliers may be less transparent or rigorous than those of established domestic contractors. Geopolitical risks are also significant, as international relations can impact delivery schedules or the availability of goods. Furthermore, ensuring compliance with U.S. export control regulations and quality standards can be more complex with foreign entities. There's also a potential risk of counterfeit or substandard products entering the supply chain. Finally, the lack of specific contractor identification makes it difficult to assess past performance, track record, and potential for future issues.

What is the significance of a 'firm fixed price' contract for this type of procurement?

A 'firm fixed price' (FFP) contract is significant because it establishes a ceiling price that the contractor must not exceed, and the government is obligated to pay the negotiated price regardless of the contractor's actual costs. For the procurement of a high-volume commodity like ammunition, an FFP contract offers the government maximum price certainty and shifts the risk of cost overruns to the contractor. This is advantageous for budgeting and financial planning. It incentivizes the contractor to manage costs efficiently to maximize profit. However, it also means the government may forgo potential savings if the contractor's actual costs turn out to be lower than anticipated, and it requires careful negotiation upfront to ensure the fixed price is fair and reasonable.

How does this contract fit into the broader context of U.S. military ammunition stockpiling strategies?

This contract for 50 million rounds of 5.56mm ammunition represents a substantial procurement aimed at maintaining or replenishing U.S. military stockpiles. Ammunition is a critical consumable resource, and maintaining adequate levels is essential for operational readiness, training, and sustained combat capability. Such large-volume purchases often reflect strategic decisions to ensure sufficient supply in anticipation of potential conflicts, support ongoing operations, or replace aging inventory. The decision to procure from foreign sources might be driven by factors such as cost-effectiveness, production capacity limitations within the U.S., or specific strategic partnerships. This procurement likely aligns with broader Department of Defense strategies for ensuring a robust and readily available supply of essential munitions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: MISCELLANEOUS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2011 CRYSTAL DR STE 911, ARLINGTON, VA, 08

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $12,331,700

Exercised Options: $12,331,700

Current Obligation: $12,331,700

Contract Characteristics

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline