DoD Awards $51.7M for M789 Cartridges to Alliant Techsystems, Amidst Ammunition Manufacturing Sector Activity

Contract Overview

Contract Amount: $51,697,500 ($51.7M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2014-03-25

End Date: 2016-02-28

Contract Duration: 705 days

Daily Burn Rate: $73.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD OF M789 CARTRIDGES

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $51.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: AWARD OF M789 CARTRIDGES Key points: 1. The contract award of $51.7 million for M789 cartridges indicates significant spending in the ammunition manufacturing sector. 2. Alliant Techsystems Operations LLC, a large business, secured this award, highlighting established players in defense contracting. 3. The contract's 'Full and Open Competition After Exclusion of Sources' suggests a specific justification for limiting initial bidders, potentially impacting price discovery. 4. The duration of 705 days for delivery suggests a substantial production run or complex logistical requirements for these ammunition components.

Value Assessment

Rating: good

The award amount of $51.7 million for M789 cartridges appears reasonable given the nature of defense procurement and the supplier's capabilities. Benchmarking against similar ammunition contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were initially excluded. This method can sometimes lead to less aggressive pricing compared to unrestricted full and open competition.

Taxpayer Impact: Taxpayer funds are being utilized for essential defense materiel. The competitive process, even with exclusions, aims to secure the best value, but the specific exclusion warrants scrutiny for potential cost implications.

Public Impact

Ensures supply of critical ammunition for military operations. Supports a major defense contractor and its manufacturing capabilities. Contributes to the economic activity within the defense industrial base. Highlights the ongoing need for specialized ammunition components in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition method may impact price.
Lack of small business participation.
Potential for sole-source justification to be challenged.

Positive Signals

Award to established defense contractor.
Addresses critical defense materiel needs.
Clear contract duration and delivery schedule.

Sector Analysis

The ammunition manufacturing sector is a critical component of the defense industrial base, characterized by specialized production processes and stringent quality requirements. Spending in this area is often driven by military readiness and modernization efforts.

Small Business Impact

This contract was not awarded to a small business, as indicated by 'sb': false. The focus appears to be on established large defense contractors with the capacity to fulfill significant ammunition orders.

Oversight & Accountability

The 'Full and Open Competition After Exclusion of Sources' clause suggests a need for clear justification and documentation to ensure accountability and prevent undue restrictions on competition. Regular oversight is crucial to monitor performance and adherence to contract terms.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Limited competition may lead to higher costs.
Lack of small business participation.
Potential for price increases due to source exclusion.
Dependence on a single large contractor for specific components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. AWARD OF M789 CARTRIDGES

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 $51.7 million.

What is the period of performance?

Start: 2014-03-25. End: 2016-02-28.

What was the specific justification for excluding certain sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did it impact the final price?

The justification for excluding sources typically relates to factors such as unique capabilities, proprietary technology, or urgent requirements that only specific contractors can meet. Understanding this rationale is key to assessing whether the exclusion was necessary and if it resulted in a fair price. Without the specific justification, it's difficult to definitively state the price impact, but such exclusions can sometimes limit competitive pressure.

What are the primary risks associated with awarding ammunition contracts to large, established companies, and how can these be mitigated?

Risks include potential complacency leading to higher prices or lower quality, and reduced opportunities for smaller, innovative firms. Mitigation strategies involve robust performance monitoring, clear quality control metrics, regular market research to ensure competitive pricing, and actively seeking opportunities to engage small businesses in subcontracting roles or future procurements.

How effectively does this contract contribute to the Department of the Army's overall ammunition readiness and strategic goals?

This contract directly addresses the need for M789 cartridges, a specific type of ammunition, contributing to the Army's operational readiness. The award's value and duration suggest a significant quantity, supporting ongoing training and potential deployment needs. Its effectiveness is tied to timely delivery, quality, and integration with broader ammunition stockpile management strategies.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 4700 NATHAN LN N, PLYMOUTH, MN, 55442

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

Financial Breakdown

Contract Ceiling: $51,697,500

Exercised Options: $51,697,500

Current Obligation: $51,697,500

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J13D0037

IDV Type: IDC

Timeline