Army awards $417M for .50 Cal Ammunition to Alliant Techsystems, a sole-source delivery order
Contract Overview
Contract Amount: $416,878,259 ($416.9M)
Contractor: Alliant Techsystems Operations LLC
Awarding Agency: Department of Defense
Start Date: 2011-09-23
End Date: 2015-09-30
Contract Duration: 1,468 days
Daily Burn Rate: $284.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: DELIVERY ORDER 0004 BASIC AWARD (.50 CAL)
Place of Performance
Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $416.9 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: DELIVERY ORDER 0004 BASIC AWARD (.50 CAL) Key points: 1. Significant award value of $417 million for small arms ammunition. 2. Alliant Techsystems is the sole awardee, raising questions about competition. 3. The contract type, Fixed Price with Economic Price Adjustment, carries inflation risk. 4. The sector is Defense, specifically small arms ammunition manufacturing.
Value Assessment
Rating: questionable
The contract is a delivery order with an economic price adjustment, making direct pricing comparisons difficult. The lack of competition further complicates value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning there was no competitive bidding process. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a large contract value suggests potential overspending and reduced value for taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The Department of Defense relies on this ammunition, making supply chain continuity a key concern. The economic price adjustment clause could lead to costs exceeding initial estimates due to market fluctuations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Economic price adjustment
- Lack of transparency in pricing
Positive Signals
- Essential defense procurement
- Established contractor
Sector Analysis
This contract falls within the Defense sector, specifically focusing on the manufacturing of small arms ammunition. Spending benchmarks for this niche are difficult to ascertain due to its specialized nature and reliance on specific manufacturing capabilities.
Small Business Impact
The contract data indicates that small business participation was not a factor in this award (sb: false). There is no indication of subcontracting opportunities for small businesses within this sole-source delivery order.
Oversight & Accountability
As a sole-source award, oversight is critical to ensure fair pricing and performance. The lack of competition necessitates robust monitoring by the Department of the Army to mitigate potential risks.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Economic price adjustment introduces cost uncertainty.
- Potential for inflated pricing due to lack of competition.
- Limited transparency on the justification for sole-source award.
Tags
small-arms-ammunition-manufacturing, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $416.9 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. DELIVERY ORDER 0004 BASIC AWARD (.50 CAL)
Who is the contractor on this award?
The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $416.9 million.
What is the period of performance?
Start: 2011-09-23. End: 2015-09-30.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of other sources. Without specific documentation, it's impossible to determine the exact reason, but it's a critical factor in assessing the necessity and fairness of the procurement process.
How does the economic price adjustment clause impact the final cost and taxpayer exposure?
The economic price adjustment (EPA) clause allows for changes in contract price based on fluctuations in specified economic factors, such as labor or material costs. This protects the contractor from unforeseen cost increases but exposes taxpayers to potentially higher final costs, especially in volatile markets.
What mechanisms are in place to ensure fair pricing and performance given the sole-source nature of this contract?
Robust oversight by the contracting agency is essential. This includes detailed cost analysis, performance monitoring, and potentially negotiating price ceilings or review clauses within the EPA to mitigate risks associated with sole-source procurements and ensure fair value.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: HWY 7 & 78 LAKE CITY ARMY AMUNITION PLANT, INDEPENDENCE, MO, 64056
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: $416,878,259
Exercised Options: $416,878,259
Current Obligation: $416,878,259
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W52P1J09D0027
IDV Type: IDC
Timeline
Start Date: 2011-09-23
Current End Date: 2015-09-30
Potential End Date: 2015-09-30 12:09:00
Last Modified: 2019-09-23
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