Department of the Army awards $38.7M contract for 30X113MM M789 cartridges to Alliant Techsystems

Contract Overview

Contract Amount: $38,669,730 ($38.7M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2015-03-26

End Date: 2017-06-30

Contract Duration: 827 days

Daily Burn Rate: $46.8K/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: 30X113MM M789 CARTRIDGES

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $38.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: 30X113MM M789 CARTRIDGES Key points: 1. Contract awarded through full and open competition after exclusion of sources, indicating a competitive process with specific justifications. 2. The contract value of $38.7 million for ammunition manufacturing suggests a significant investment in defense readiness. 3. The fixed-price contract type aims to control costs and provide predictability for the government. 4. The duration of 827 days indicates a medium-term supply requirement for these specialized cartridges. 5. The award to Alliant Techsystems Operations LLC highlights a key supplier in the defense ammunition sector. 6. The contract falls under the 'Ammunition (except Small Arms) Manufacturing' NAICS code, specifying the product category.

Value Assessment

Rating: good

The contract value of $38.7 million for 30X113MM M789 cartridges appears reasonable given the specialized nature of military ammunition. Benchmarking against similar contracts for defense ordnance would provide a more precise value-for-money assessment. The firm fixed-price structure suggests the government has negotiated a set price, which can be advantageous if costs are well-understood. However, without detailed cost breakdowns or comparisons to commercial equivalents (if any exist), a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be open, certain sources were excluded, likely due to specific technical requirements, security considerations, or prior performance. The presence of two bidders suggests a degree of competition, but the exclusion of other potential sources may limit the full spectrum of price discovery.

Taxpayer Impact: The exclusion of sources, even with two bidders, means taxpayers may not have benefited from the lowest possible price that a truly open competition might have yielded. However, the competition that did occur likely still provided some downward pressure on pricing.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel, who will receive essential ammunition for training and operational readiness. The services delivered include the manufacturing and supply of 30X113MM M789 cartridges, a specific type of ordnance. The geographic impact is primarily within the United States, where the contractor operates and where the ammunition will likely be supplied. Workforce implications include jobs in manufacturing, logistics, and quality control at the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources impacting price.
Reliance on a single contractor for a critical defense item could pose supply chain risks if not managed carefully.

Positive Signals

Award to an established defense contractor with likely experience in ammunition production.
Firm fixed-price contract provides cost certainty for the government.
The contract duration suggests a stable supply chain for the specified period.

Sector Analysis

The defense ammunition manufacturing sector is a critical component of the national security industrial base. Companies in this sector often require specialized facilities, stringent quality control, and adherence to government specifications. Spending in this area is driven by military readiness requirements, training needs, and the lifecycle of weapon systems. Comparable spending benchmarks would typically involve other contracts for similar types of ordnance or ammunition from various branches of the military.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). Therefore, the primary contractor, Alliant Techsystems Operations LLC, is likely a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether Alliant Techsystems engages small businesses for materials, components, or specialized services related to this contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Ammunition Procurement
Army Ordnance and Munitions Programs
Defense Industrial Base Contracts
Small Arms and Ammunition Manufacturing

Risk Flags

Limited competition due to source exclusion.
Potential supply chain vulnerabilities for specialized defense components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. 30X113MM 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 $38.7 million.

What is the period of performance?

Start: 2015-03-26. End: 2017-06-30.

What is the track record of Alliant Techsystems Operations LLC in fulfilling defense contracts, particularly for ammunition?

Alliant Techsystems Operations LLC, now part of Northrop Grumman, has a long and extensive history of supplying defense products and services to the U.S. military. They are a significant player in the aerospace and defense industry, with a strong focus on munitions, propulsion, and advanced materials. Their track record includes numerous contracts for various types of ammunition, including artillery shells, small arms ammunition, and specialized ordnance. While specific performance metrics for individual contracts are not publicly detailed, their continued success in securing large-value defense contracts suggests a generally positive performance history and capability to meet stringent military requirements. Their experience in managing complex supply chains and adhering to rigorous quality standards is a key factor in their sustained presence in the defense sector.

How does the $38.7 million contract value compare to historical spending on similar ammunition types?

The $38.7 million contract value for 30X113MM M789 cartridges represents a significant, but not extraordinary, expenditure within the broader context of defense ammunition procurement. Historical spending on ammunition varies widely based on the type of munition, quantity, and the specific operational tempo or strategic needs of the military at the time. For instance, contracts for larger caliber munitions or those required in high-volume for ongoing conflicts can easily reach hundreds of millions or even billions of dollars. Conversely, specialized or less frequently used ordnance might see awards in the tens of millions. To provide a precise comparison, one would need to analyze historical data for the M789 cartridge specifically or similar intermediate caliber rounds used by the Army, looking at quantities, unit prices, and total contract values over time. Without that granular data, this $38.7 million award appears to be a substantial, mid-range investment for a specific type of military ammunition.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential supply chain disruptions, quality control issues, and cost overruns (though mitigated by fixed-price). Supply chain risks are inherent in defense manufacturing, where reliance on specialized components and materials can be a vulnerability. Mitigation strategies often involve robust supplier vetting, maintaining strategic stockpiles, and diversifying sources where feasible. Quality control is paramount for munitions; failure can have severe operational consequences. Mitigation includes stringent testing protocols, adherence to military specifications, and contractor quality assurance programs. While the firm fixed-price (FFP) contract type aims to cap costs for the government, risks remain if unforeseen technical challenges arise during production, potentially leading to contractor performance issues or requests for contract modifications. The 'limited' competition aspect also carries a risk of not achieving the most competitive pricing.

What is the expected program effectiveness or impact of this ammunition supply on Army operations?

The expected program effectiveness of this contract is directly tied to ensuring the operational readiness and training capabilities of Army units equipped with weapons systems that utilize the 30X113MM M789 cartridge. This specific munition is often associated with aircraft armament (like the AH-64 Apache helicopter's chain gun) or certain vehicle-mounted weapon systems. By securing a supply of these cartridges, the Army ensures that its forces have the necessary ammunition for realistic training exercises, which are crucial for maintaining proficiency and combat effectiveness. Furthermore, it contributes to the strategic stockpile, ensuring availability for potential operational deployments. The effectiveness is measured by the reliable and timely delivery of high-quality ammunition, enabling units to meet their training objectives and maintain combat readiness without ammunition shortages.

How does the 'Full and Open Competition After Exclusion of Sources' classification impact taxpayer value?

The 'Full and Open Competition After Exclusion of Sources' classification presents a nuanced impact on taxpayer value. On one hand, it signifies an attempt to leverage competition to achieve better pricing and value. Having two bidders suggests that some level of market forces were at play, likely preventing the highest possible price. However, the exclusion of certain sources means that the government did not benefit from the full spectrum of potential competition. This exclusion is typically based on specific, justifiable reasons such as unique technical capabilities, security clearances, or past performance requirements. If these exclusions were indeed necessary to ensure the acquisition of a highly specialized or critical item, then the resulting price, while potentially not the absolute lowest achievable, might represent good value for the required capability. Conversely, if the exclusions were overly broad or not strictly necessary, taxpayers may have paid a premium compared to what a truly open competition could have yielded.

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: $38,669,730

Exercised Options: $38,669,730

Current Obligation: $38,669,730

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J13D0037

IDV Type: IDC

Timeline