DoD awards $119M for bullet manufacturing modernization, with Alliant Techsystems Operations LLC

Contract Overview

Contract Amount: $119,236,523 ($119.2M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2013-09-18

End Date: 2020-09-30

Contract Duration: 2,569 days

Daily Burn Rate: $46.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: AWARD MODERNIZATION OF CAL .50 FRONT END BULLET MANUFACTURING PROCESS.

Place of Performance

Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $119.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: AWARD MODERNIZATION OF CAL .50 FRONT END BULLET MANUFACTURING PROCESS. Key points: 1. Contract awarded for modernization of .50 caliber front-end bullet manufacturing. 2. Alliant Techsystems Operations LLC is the sole awardee. 3. The contract spans over 7 years, from 2013 to 2020. 4. This award falls under Small Arms Ammunition Manufacturing. 5. The contract type is Fixed Price with Economic Price Adjustment. 6. The award was made via a Delivery Order. 7. The contract is for a significant modernization effort.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable modernization projects. The fixed-price with economic price adjustment structure suggests an attempt to control costs while accounting for potential material fluctuations. However, the long duration and significant dollar amount warrant scrutiny to ensure the modernization achieved its intended efficiencies and cost savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was initiated. This approach is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring that the government is not overpaying for goods or services.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring .50 caliber ammunition. The contract aims to modernize the manufacturing process for critical ammunition components. The geographic impact is primarily centered around the manufacturing facilities, likely in Missouri where the contractor operates. Workforce implications include potential job creation or retention in the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the 'Economic Price Adjustment' clause over a long contract duration.
Risk of technological obsolescence if modernization efforts do not keep pace with evolving manufacturing capabilities.
Dependence on a single contractor for a critical manufacturing process could pose supply chain risks.

Positive Signals

Modernization of a critical defense manufacturing process can lead to improved efficiency and quality.
Awarding under full and open competition suggests a potentially competitive pricing structure.
Long-term contract provides stability for the contractor and ensures a consistent supply of modernized ammunition components.

Sector Analysis

The defense manufacturing sector, specifically small arms ammunition, is a critical component of national security. This contract addresses the need for technological advancement in a mature industry, aiming to improve production capabilities for essential munitions. Comparable spending benchmarks would typically involve other large-scale defense manufacturing modernization efforts or significant ammunition procurement contracts.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it appear to have significant subcontracting implications for small businesses based on the provided details. The primary awardee is a large defense contractor. Further analysis would be needed to determine if any small business subcontracting plans were mandated or voluntarily pursued.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the delivery order requirements and performance standards outlined in the contract. Transparency is generally facilitated through contract award databases, though specific details of the modernization process may be sensitive.

Related Government Programs

Department of Defense Ammunition Procurement
Defense Manufacturing Modernization Programs
Small Arms Ammunition Production
Army Combat Ammunition Systems

Risk Flags

Potential cost escalation due to Economic Price Adjustment clause.
Long contract duration may not fully capture rapid technological advancements.
Dependence on a single contractor for critical manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $119.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. AWARD MODERNIZATION OF CAL .50 FRONT END BULLET MANUFACTURING PROCESS.

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 $119.2 million.

What is the period of performance?

Start: 2013-09-18. End: 2020-09-30.

What specific improvements in efficiency or cost reduction were realized through the modernization of the .50 caliber bullet manufacturing process?

The provided data does not detail the specific outcomes of the modernization effort. To assess the realized improvements, one would need to examine post-award performance reports, program reviews, or contractor deliverables. Key metrics to look for would include changes in production cycle times, reduction in material waste, improvements in defect rates, and overall cost per unit produced before and after the modernization. Without this information, it's difficult to quantify the value-for-money achieved by the $119 million investment.

How did the 'Economic Price Adjustment' clause impact the final cost of the contract compared to a fixed-price award?

The 'Economic Price Adjustment' (EPA) clause allows for adjustments to the contract price based on fluctuations in specified economic factors, such as labor or material costs. Over the 7-year duration of this $119 million contract, the EPA could have significantly increased the final cost beyond the initial award amount if input costs rose substantially. To understand its impact, a comparison of the initial estimated cost with the final disbursed amount, alongside an analysis of the economic indices used for adjustment, would be necessary. This clause is often used in long-term contracts to protect contractors from unforeseen cost increases, but it can also shift some of that risk to the government.

What was the competitive landscape for this contract, and how many bids were received?

The contract was awarded under 'Full and Open Competition,' which signifies that the solicitation was broadly advertised, and any responsible source was permitted to submit an offer. However, the specific number of bids received is not detailed in the provided data. A robust competition typically involves multiple bidders, which tends to drive down prices and encourage innovation. If only a few bids were received, or if the competition was effectively limited despite being advertised as 'full and open,' it could raise questions about the effectiveness of the procurement process in achieving the best value for the government.

What is the track record of Alliant Techsystems Operations LLC in fulfilling similar defense manufacturing contracts?

Alliant Techsystems Operations LLC (now part of Northrop Grumman) has a long history of performing large-scale defense manufacturing contracts, including those related to ammunition production. Their track record typically involves complex production processes, adherence to stringent quality standards, and delivery of critical defense components. Assessing their specific performance on this bullet manufacturing modernization would require reviewing past performance evaluations, any contract disputes or awards, and their overall success in meeting delivery schedules and technical requirements on similar projects. Generally, they are considered a major player in the defense industrial base.

How does this $119 million award compare to historical spending on .50 caliber ammunition manufacturing modernization?

Comparing this $119 million award requires context on historical spending patterns for similar modernization efforts. Large-scale upgrades to manufacturing processes for critical munitions can be infrequent, often occurring when existing facilities become outdated or inefficient. Without specific historical data on prior modernization projects for .50 caliber ammunition, it's difficult to benchmark. However, the amount suggests a significant investment aimed at substantial process improvements, potentially indicating a shift towards more advanced or efficient production techniques compared to previous, perhaps smaller-scale, upgrades or routine procurements.

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

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: $119,236,523

Exercised Options: $119,236,523

Current Obligation: $119,236,523

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J12D0078

IDV Type: IDC

Timeline