DoD Awards $208M for Small Caliber Ammunition Production at Lake City Army Ammunition Plant
Contract Overview
Contract Amount: $207,984,360 ($208.0M)
Contractor: Alliant Techsystems Operations LLC
Awarding Agency: Department of Defense
Start Date: 2018-03-26
End Date: 2020-03-31
Contract Duration: 736 days
Daily Burn Rate: $282.6K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: SMALL CALIBER AMMUNITION PRODUCTION AWARD AT LAKE CITY ARMY AMMUNITION PLANT.
Place of Performance
Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $208.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: SMALL CALIBER AMMUNITION PRODUCTION AWARD AT LAKE CITY ARMY AMMUNITION PLANT. Key points: 1. Significant award for essential small caliber ammunition production. 2. Alliant Techsystems Operations LLC is the incumbent and likely competitor. 3. Potential risk of supply chain disruption if production capacity is strained. 4. Ammunition manufacturing is a critical defense sector.
Value Assessment
Rating: good
The award value of $208M over two years suggests a competitive pricing environment. Benchmarking against similar ammunition production contracts would provide further insight into cost-effectiveness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a robust price discovery process. This method generally leads to more competitive pricing for the government.
Taxpayer Impact: The competitive award ensures taxpayer funds are used efficiently for critical defense materiel.
Public Impact
Ensures continued supply of small caliber ammunition for military operations. Supports domestic manufacturing capabilities for defense readiness. Potential impact on civilian shooting sports and hunting markets if supply is diverted.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Dependence on a single production facility (Lake City Army Ammunition Plant).
- Potential for cost increases due to economic price adjustment clause.
- Geopolitical factors could impact raw material availability and cost.
Positive Signals
- Secures a vital component for national defense.
- Leverages established production capacity at a government-owned, contractor-operated facility.
- Full and open competition promotes cost savings.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically small arms ammunition. Spending benchmarks for this category are highly dependent on global demand and geopolitical tensions.
Small Business Impact
While the prime contractor is a large business, the contract may offer subcontracting opportunities for small businesses involved in raw material supply or specialized manufacturing processes.
Oversight & Accountability
The Department of the Army oversees this contract, ensuring production meets stringent quality and quantity requirements. Regular performance reviews and audits are standard for such critical defense awards.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Dependence on a single production facility.
- Potential for cost escalation due to EPA.
- Supply chain vulnerability for raw materials.
- Long-term strategic sourcing needs for ammunition.
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 $208.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. SMALL CALIBER AMMUNITION PRODUCTION AWARD AT LAKE CITY ARMY AMMUNITION PLANT.
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 $208.0 million.
What is the period of performance?
Start: 2018-03-26. End: 2020-03-31.
What is the historical cost performance of Alliant Techsystems Operations LLC at the Lake City Army Ammunition Plant for similar contracts?
Historical cost performance data for Alliant Techsystems Operations LLC at the Lake City Army Ammunition Plant would be crucial for a comprehensive value assessment. Analyzing past contract pricing, cost overruns, and efficiency metrics can reveal trends and potential areas for cost savings or identify risks associated with price escalation under the economic price adjustment clause.
What are the specific risks associated with the economic price adjustment (EPA) clause in this contract?
The primary risk of an EPA clause is the potential for cost increases beyond initial projections, driven by fluctuations in raw material prices (e.g., metals, chemicals) or labor costs. This can lead to higher overall spending for the government, especially during periods of high inflation or supply chain volatility, potentially impacting the total value of the award.
How does the production capacity at Lake City Army Ammunition Plant compare to current and projected demand for small caliber ammunition?
Assessing the production capacity relative to demand is key to understanding effectiveness. If demand consistently outstrips capacity, it could lead to shortages, increased lead times, and potentially higher prices due to scarcity. Conversely, excess capacity could indicate inefficient resource allocation or a need to re-evaluate production levels.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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: $207,984,360
Exercised Options: $207,984,360
Current Obligation: $207,984,360
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W52P1J12D0078
IDV Type: IDC
Timeline
Start Date: 2018-03-26
Current End Date: 2020-03-31
Potential End Date: 2020-03-31 12:03:00
Last Modified: 2021-09-28
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