DoD awards $198M for Hydra 70 rocket hardware in 2007, a non-competed sole-source contract
Contract Overview
Contract Amount: $198,121,196 ($198.1M)
Contractor: General Dynamics-Ots, Inc.
Awarding Agency: Department of Defense
Start Date: 2007-08-28
End Date: 2014-06-30
Contract Duration: 2,498 days
Daily Burn Rate: $79.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DELIVERY ORDER AWARD FY 2007 SUPPLEMENTAL FOR HYDRA 70 2.75 INCH HARDWARE.
Place of Performance
Location: HAMPTON, CALHOUN County, ARKANSAS, 71744
State: Arkansas Government Spending
Plain-Language Summary
Department of Defense obligated $198.1 million to GENERAL DYNAMICS-OTS, INC. for work described as: DELIVERY ORDER AWARD FY 2007 SUPPLEMENTAL FOR HYDRA 70 2.75 INCH HARDWARE. Key points: 1. Significant award value of $198M for rocket hardware. 2. Sole-source award to General Dynamics-OTS, Inc. raises competition concerns. 3. Long contract duration (2007-2014) suggests potential for price escalation. 4. Ammunition manufacturing sector is critical for defense readiness.
Value Assessment
Rating: questionable
The contract was awarded in 2007 with a long duration extending to 2014. Without competitive bidding, it's difficult to assess if the $198M price reflects fair market value compared to similar ammunition contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning no competition was sought. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.
Taxpayer Impact: The lack of competition for a large contract like this may result in taxpayers paying more than necessary for essential defense hardware.
Public Impact
Taxpayers may have overpaid due to the absence of competition. The long duration of the contract could mask inefficiencies or price increases over time. Dependence on a single supplier for critical defense components poses a supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
- No small business participation reported
Positive Signals
- Essential defense hardware procurement
- Long-term supply assurance
Sector Analysis
This contract falls within the defense manufacturing sector, specifically ammunition production. Spending benchmarks for similar large-scale, sole-source defense hardware contracts are difficult to establish due to the nature of such awards.
Small Business Impact
The data indicates no small business participation in this contract. This is common for large, specialized defense contracts but represents a missed opportunity for small business engagement.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny regarding the justification for not seeking competitive bids. Oversight should ensure the pricing remains reasonable throughout the contract's extended period.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competition
- Potential for inflated pricing
- Long contract duration increases risk
- Lack of small business participation
- Supply chain vulnerability
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ar, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $198.1 million to GENERAL DYNAMICS-OTS, INC.. DELIVERY ORDER AWARD FY 2007 SUPPLEMENTAL FOR HYDRA 70 2.75 INCH HARDWARE.
Who is the contractor on this award?
The obligated recipient is GENERAL DYNAMICS-OTS, 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 $198.1 million.
What is the period of performance?
Start: 2007-08-28. End: 2014-06-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative sources considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's impossible to confirm the exact reasoning. However, the absence of competition suggests that either no other vendors could meet the requirements, or the procuring agency did not adequately explore competitive options, potentially impacting overall value for money.
How was the 'firm fixed price' determined without competitive bidding, and what mechanisms were in place to prevent price creep over the contract's long duration?
Determining a firm fixed price without competition is challenging and relies heavily on historical data, cost estimates, and negotiation. The long duration (2007-2014) increases the risk of price creep due to inflation, material cost fluctuations, or changes in production efficiency. Robust oversight and clear contract clauses addressing potential price adjustments would be crucial to mitigate this risk.
What is the long-term strategic impact of relying on a single supplier for such a critical defense component like the Hydra 70 rocket hardware?
Sole-source reliance on General Dynamics-OTS for Hydra 70 hardware creates a significant supply chain vulnerability. Any disruption to this single supplier, whether due to production issues, financial instability, or geopolitical factors, could severely impact military readiness. Diversifying the supplier base or developing alternative domestic production capabilities would enhance long-term strategic resilience.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 326 IBM ROAD BUILDING 862, WILLISTON, VT, 00
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $198,121,196
Exercised Options: $198,121,196
Current Obligation: $198,121,196
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q05D0001
IDV Type: IDC
Timeline
Start Date: 2007-08-28
Current End Date: 2014-06-30
Potential End Date: 2014-06-30 00:00:00
Last Modified: 2014-08-20
More Contracts from General Dynamics-Ots, Inc.
- FY 10 Requirements for Family of Munitions - Hydra-70 2.75-Inch Rocket System — $1.1B (Department of Defense)
- Procurement of FY 14-18 Hydra-70 Rocket System. This Requirement Includes Rockets, Warheads, Motors and Containers, Which Will BE Produced IAW a Government-Provided TDP — $815.7M (Department of Defense)
- Procurement of Active Protection Systems and CLS Support for the Bradley Fighting Vehicle — $383.5M (Department of Defense)
- Vehicle SET (P/N 13004403) — $347.8M (Department of Defense)
- 200602!700012!1700!m67854!commanding General !M6785406D7004 !A!N! !N!0001 ! !20051107!20060530!003567125!003567125!001381284!n!general Dynamics Armament and !128 Lakeside AVE !burlington !vt!05401!10675!007!50!burlington !chittenden !vermont !+000073387414!n!n!000000000000!5810!communications Security Equip and Comps !A7 !electronics and Communication Equip !000 !NOT Discernable !334220!E! !5!B!S! ! !D!20060530!B! ! !n!a!a!u!j!2!002!n!2a!z!n!z! ! !Y!C!N! ! ! !z!a!a!a!000!a!b!n! ! ! ! !1727!M67854!0001! ! — $320.5M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)