Department of the Army awards $26.2M contract for small arms, ordnance, and accessories to SIG Sauer Inc

Contract Overview

Contract Amount: $26,207,659 ($26.2M)

Contractor: SIG Sauer Inc.

Awarding Agency: Department of Defense

Start Date: 2009-04-23

End Date: 2011-02-10

Contract Duration: 658 days

Daily Burn Rate: $39.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER 0001 AGAINST BASIC CINTRACT W52H09-09-D-0158

Place of Performance

Location: EXETER, ROCKINGHAM County, NEW HAMPSHIRE, 03833

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $26.2 million to SIG SAUER INC. for work described as: DELIVERY ORDER 0001 AGAINST BASIC CINTRACT W52H09-09-D-0158 Key points: 1. Contract awarded as a delivery order against a basic contract, indicating a pre-existing relationship. 2. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 3. The award was not competitively procured, raising questions about potential price optimization. 4. The contract duration is 658 days, spanning nearly two years. 5. The contractor, SIG Sauer Inc., is a known entity in the firearms industry. 6. The North American Industry Classification System (NAICS) code 332994 suggests a focus on small arms manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without comparable contract data for similar small arms and ordnance. The firm fixed price structure provides cost certainty but does not inherently guarantee optimal value. Further analysis would require comparing unit prices for specific items against market rates or other government contracts for similar equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' designation, indicating a sole-source procurement. This means only one contractor, SIG Sauer Inc., was solicited. The lack of competition limits the government's ability to explore alternative suppliers or negotiate potentially lower prices through a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the benefits of competition, such as price reductions and innovation, are not realized.

Public Impact

The primary beneficiaries are likely military personnel requiring small arms and ordnance. The contract delivers essential equipment for defense operations. The geographic impact is primarily tied to the Department of the Army's operational needs. Workforce implications may include support roles within SIG Sauer Inc. and potentially related defense supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in a higher price than a competitively awarded contract.
Sole-source awards can reduce transparency in pricing and value assessment.
Dependence on a single supplier could pose supply chain risks if the contractor faces production issues.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Award to an established manufacturer like SIG Sauer Inc. suggests a focus on proven capabilities.
The contract addresses a specific need for small arms and ordnance, indicating a clear requirement.

Sector Analysis

The defense sector, specifically the manufacturing of small arms and ordnance, is characterized by specialized production capabilities and often involves long-standing relationships between government agencies and key suppliers. This contract fits within the broader category of defense procurement for weaponry and related accessories. Market size for such specialized defense equipment is substantial, driven by military readiness requirements globally.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. The award to a likely larger, established firm suggests limited direct opportunities for small businesses within this specific contract, though they may be part of SIG Sauer's broader supply chain.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed price structure, requiring the contractor to deliver specified goods. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Small Arms Procurement
Ordnance and Ammunition Manufacturing Contracts
SIG Sauer Inc. Government Contracts
Firm Fixed Price Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.2 million to SIG SAUER INC.. DELIVERY ORDER 0001 AGAINST BASIC CINTRACT W52H09-09-D-0158

Who is the contractor on this award?

The obligated recipient is SIG SAUER 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 $26.2 million.

What is the period of performance?

Start: 2009-04-23. End: 2011-02-10.

What is the track record of SIG Sauer Inc. in fulfilling government contracts for small arms and ordnance?

SIG Sauer Inc. has a well-established reputation as a manufacturer of firearms and related accessories for military and law enforcement agencies worldwide. Their history includes supplying various pistol and rifle platforms to numerous government entities. While specific performance metrics for past contracts are not detailed here, their continued presence as a supplier suggests a generally satisfactory track record in delivering products that meet military specifications. However, a deeper dive into past contract performance, including any instances of delays, quality issues, or disputes, would be necessary for a comprehensive assessment.

How does the awarded price compare to market rates for similar small arms and ordnance?

Directly comparing the $26.2 million total award value to market rates is difficult without itemized pricing and specific product details. The contract is for 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing,' a broad category. To assess value, one would need to benchmark the unit cost of specific items (e.g., individual firearms, ammunition types, accessories) against publicly available commercial prices or prices from other government contracts awarded competitively for similar items. The sole-source nature of this award also raises concerns that the price may not reflect the best possible value achievable through competition.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract include potential overpayment due to the lack of competitive bidding, which limits price discovery and negotiation leverage for the government. There is also a risk of reduced innovation, as the contractor may have less incentive to offer cost-saving improvements or new technologies. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; any disruption in SIG Sauer Inc.'s production or delivery capabilities could directly impact the Department of the Army's operational readiness. Finally, the lack of transparency inherent in sole-source awards makes it harder to scrutinize the fairness of the pricing.

What is the historical spending pattern for small arms and ordnance by the Department of the Army?

Historical spending patterns for small arms and ordnance by the Department of the Army are substantial and fluctuate based on global security environments, modernization programs, and operational tempo. The Army consistently procures large quantities of firearms, ammunition, and related accessories to equip its forces. This spending is often distributed across multiple contracts, with significant portions allocated to major defense contractors and specialized manufacturers like SIG Sauer Inc. Analyzing historical data would reveal trends in specific weapon systems procured, average unit costs over time, and the proportion of spending allocated to competitive versus sole-source awards within this category.

What are the implications of the Firm Fixed Price (FFP) contract type for this award?

The Firm Fixed Price (FFP) contract type means that SIG Sauer Inc. is obligated to complete the work and deliver the specified goods for a predetermined price. This structure shifts the majority of the cost risk from the government to the contractor. If the contractor's costs exceed the fixed price, they absorb the loss. Conversely, if their costs are lower than anticipated, they retain the profit. For the government, FFP provides budget certainty and simplifies financial management, as the total cost is known upfront. However, it can also incentivize contractors to minimize costs, potentially impacting quality or service if not carefully monitored, and may lead to higher initial prices compared to cost-reimbursement contracts to account for contractor risk.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 18 INDUSTRIAL DR, EXETER, NH, 03833

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,207,659

Exercised Options: $26,207,659

Current Obligation: $26,207,659

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52H0909D0158

IDV Type: IDC

Timeline