Department of Defense awarded $57.9M contract for aluminum products, with limited competition

Contract Overview

Contract Amount: $57,880,710 ($57.9M)

Contractor: Colt Defense LLC

Awarding Agency: Department of Defense

Start Date: 2008-07-21

End Date: 2010-06-30

Contract Duration: 709 days

Daily Burn Rate: $81.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY08 SUPPLEMENTAL

Place of Performance

Location: WEST HARTFORD, HARTFORD County, CONNECTICUT, 06110

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $57.9 million to COLT DEFENSE LLC for work described as: FY08 SUPPLEMENTAL Key points: 1. Contract value of $57.9M for aluminum sheet, plate, and foil manufacturing. 2. Awarded to COLT DEFENSE LLC, a single entity. 3. Contract duration spans from July 2008 to June 2010. 4. The contract type is Firm Fixed Price, indicating price certainty. 5. No small business set-aside was applied to this award. 6. The North American Industry Classification System (NAICS) code is 331315.

Value Assessment

Rating: fair

The contract value of $57.9 million for aluminum products appears substantial. Benchmarking this against similar contracts for aluminum sheet, plate, and foil manufacturing is challenging without more specific details on the exact specifications and quantities. However, given the duration and the nature of defense procurement, the pricing would need to be carefully evaluated against market rates for raw materials and manufacturing at the time of award. The absence of competitive bidding could potentially lead to less favorable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, COLT DEFENSE LLC, was considered. This approach bypasses the standard competitive bidding process, which typically involves soliciting proposals from multiple interested parties. The lack of competition means that the government did not explore alternative suppliers or negotiate prices with a range of vendors, potentially limiting the opportunity for cost savings.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no market pressure to drive down prices. The government may not be receiving the best possible value for its expenditure when competition is absent.

Public Impact

This contract supports the Department of Defense's material needs for defense applications. It ensures the supply of critical aluminum components for military equipment. The contract's geographic impact is primarily tied to the contractor's location in Connecticut. Workforce implications include employment at COLT DEFENSE LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices.
Limited transparency in pricing due to sole-source award.
Potential for less innovation without competitive pressure.

Positive Signals

Ensures supply of critical materials for defense.
Firm Fixed Price contract provides budget certainty.
Contract awarded to a known entity within the defense sector.

Sector Analysis

The aluminum sheet, plate, and foil manufacturing sector (NAICS 331315) is a key component of the broader metals manufacturing industry. This contract falls within the defense industrial base, supplying essential materials for military hardware. The market for specialized aluminum products for defense applications can be niche, with a limited number of qualified suppliers capable of meeting stringent military specifications. Benchmarking this contract's value would require comparison to other defense contracts for similar materials or to commercial market rates for high-grade aluminum.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no subcontracting goals were specified. The award to COLT DEFENSE LLC, a single entity, suggests that small businesses were not directly involved as primary awardees or necessarily as significant subcontractors in this specific transaction. The impact on the small business ecosystem is therefore minimal for this particular contract, as it did not leverage small business participation programs.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management systems. As a sole-source award, the justification and approval process would be subject to specific regulations and review. Transparency is limited due to the lack of competitive bidding. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Department of Defense Procurement
Defense Industrial Base Contracts
Aluminum Manufacturing Contracts
Sole-Source Defense Awards

Risk Flags

Sole-source award limits price competition.
Lack of transparency in pricing justification.
Potential for above-market pricing due to no competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.9 million to COLT DEFENSE LLC. FY08 SUPPLEMENTAL

Who is the contractor on this award?

The obligated recipient is COLT DEFENSE 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 $57.9 million.

What is the period of performance?

Start: 2008-07-21. End: 2010-06-30.

What is the historical spending pattern for aluminum products by the Department of Defense?

Analyzing historical spending on aluminum products by the Department of Defense requires access to comprehensive procurement databases. While this specific contract from FY08 Supplemental accounts for $57.9 million, broader trends would involve examining spending across multiple fiscal years and various military branches. Factors influencing historical spending include geopolitical events, modernization programs, and changes in material requirements for defense systems. Without a broader dataset, it's difficult to establish a definitive pattern, but defense spending on raw materials like aluminum is generally tied to the production of aircraft, vehicles, and other equipment. The trend can fluctuate based on budget allocations and strategic priorities.

How does the pricing of this contract compare to similar aluminum supply contracts?

Direct price comparison for this $57.9 million contract is challenging without detailed specifications of the aluminum products (e.g., alloy type, thickness, dimensions, quantity) and the specific market conditions at the time of award (2008-2010). As a sole-source award, there was no competitive bidding to establish a market-driven price. To assess value, one would need to benchmark against other defense contracts for similar aluminum materials or consult commercial market data for comparable grades and volumes. The absence of competition suggests a potential for the government to have paid a premium compared to what might have been achieved through a competitive process.

What are the risks associated with sole-source defense contracts for raw materials?

Sole-source defense contracts for raw materials carry several risks. Primarily, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most competitive rate. This reduces the government's purchasing power and potentially wastes taxpayer funds. Secondly, it limits the government's ability to explore alternative suppliers, potentially hindering access to more innovative or cost-effective solutions. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially impacting supply chain resilience. Finally, without competitive proposals, it can be harder to objectively assess whether the awarded price represents fair market value.

What is COLT DEFENSE LLC's track record with the Department of Defense?

COLT DEFENSE LLC, the contractor for this $57.9 million aluminum supply contract, has a history of providing goods and services to the Department of Defense. While this specific contract was for aluminum products, the company is more widely known for its firearms manufacturing. Its track record with the DoD would encompass various contracts over time, potentially including weapon systems, components, and related materials. A comprehensive review would involve examining past performance evaluations, contract modifications, and any disputes or issues that may have arisen on previous awards to assess their reliability and performance history.

What is the typical duration and value of contracts for aluminum manufacturing within the defense sector?

The duration and value of contracts for aluminum manufacturing within the defense sector can vary significantly based on the specific application, quantity, and complexity of the materials required. Contracts can range from short-term supply agreements for specific components to longer-term agreements for ongoing material needs. Values can span from thousands to millions of dollars. This $57.9 million contract, awarded over a two-year period (2008-2010), appears to be a substantial award for aluminum sheet, plate, and foil. However, without more context on the exact specifications and market rates, it's difficult to definitively classify its typicality.

Industry Classification

NAICS: Manufacturing › Alumina and Aluminum Production and Processing › Aluminum Sheet, Plate, and Foil Manufacturing

Product/Service Code: WEAPONS

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: Colt Defense Holding LLC (UEI: 603395794)

Address: 547 NEW PARK AVE, WEST HARTFORD, CT, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $57,880,710

Exercised Options: $57,880,710

Current Obligation: $57,880,710

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52H0907D0425

IDV Type: IDC

Timeline