DoD awards $40M for ammunition manufacturing, with Alliant Techsystems Operations LLC securing the delivery order

Contract Overview

Contract Amount: $40,006,053 ($40.0M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2017-07-17

End Date: 2022-12-31

Contract Duration: 1,993 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK238 AND MK239 DELIVERY ORDER AWARD.

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24143

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: MK238 AND MK239 DELIVERY ORDER AWARD. Key points: 1. The contract value represents a significant investment in essential defense materiel. 2. Competition dynamics for this award are noted as 'full and open after exclusion of sources,' suggesting a controlled but potentially competitive process. 3. The duration of the contract (1993 days) indicates a long-term need for these services. 4. The fixed-price contract type aims to control costs for the government. 5. This award falls under the 'Ammunition (except Small Arms) Manufacturing' NAICS code, highlighting a specific industrial capability.

Value Assessment

Rating: good

Benchmarking the value of this specific delivery order against similar contracts for ammunition manufacturing is challenging without more granular data on the exact types and quantities of ammunition procured. However, the firm fixed-price structure suggests an effort to establish predictable costs. The award amount appears reasonable for a multi-year delivery order of this nature, assuming it covers a substantial quantity of specialized munitions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This indicates that while the competition was intended to be broad, certain sources may have been excluded based on specific criteria, potentially related to technical capabilities, security clearances, or existing relationships. The number of bidders is not specified, but the 'exclusion of sources' suggests a more curated selection process than a purely open competition.

Taxpayer Impact: While the exclusion of sources might limit the number of potential bidders, the 'full and open' aspect aims to ensure a competitive environment. Taxpayers benefit from the government seeking competitive bids, which generally leads to better pricing and value, even with source exclusions.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, ensuring the availability of critical ammunition for military operations. The services delivered involve the manufacturing of ammunition, excluding small arms, which is vital for various defense platforms. The geographic impact is primarily within the United States, supporting domestic defense industrial capabilities. Workforce implications include job creation and sustainment within the defense manufacturing sector, particularly at Alliant Techsystems Operations LLC facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future orders if market conditions for raw materials or manufacturing change significantly.
Dependence on a single contractor for a critical supply chain item could pose risks if the contractor faces production issues.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
The award is made to a known entity, Alliant Techsystems Operations LLC, suggesting a level of established performance.
The contract duration indicates a stable, long-term supply chain for essential munitions.

Sector Analysis

The defense industrial base relies heavily on specialized manufacturing capabilities for munitions. This contract falls within the broader defense sector, specifically focusing on the production of non-small arms ammunition. The market for such specialized defense components is often characterized by a limited number of highly capable contractors due to stringent quality, security, and technical requirements. Spending in this area is critical for national security and readiness.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically tied to small business set-asides for this particular award. The primary contractor, Alliant Techsystems Operations LLC, is a large business. Any subcontracting would be at the discretion of the prime contractor to meet its production needs.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractors meet performance, quality, and delivery requirements. Accountability measures are embedded within the contract terms, including specifications, delivery schedules, and payment milestones. Transparency is facilitated through contract award databases, though specific operational details may be sensitive.

Related Government Programs

Department of Defense Ammunition Procurement
Defense Industrial Base Manufacturing
Alliant Techsystems Contracts
Fixed-Price Delivery Orders

Risk Flags

Potential supply chain vulnerabilities for raw materials.
Dependence on a single source for critical munitions.
Risk of production delays impacting military readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. MK238 AND MK239 DELIVERY ORDER AWARD.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $40.0 million.

What is the period of performance?

Start: 2017-07-17. End: 2022-12-31.

What is the historical spending trend for ammunition manufacturing by the Department of Defense over the last five years?

Analyzing historical spending trends for ammunition manufacturing by the Department of Defense requires access to comprehensive procurement data across multiple fiscal years. Generally, DoD spending on ammunition fluctuates based on operational tempo, strategic priorities, and inventory management goals. Factors such as geopolitical events, modernization programs, and the phasing out of older munitions can significantly influence annual expenditures. While specific figures for 'Ammunition (except Small Arms) Manufacturing' are not provided here, overall defense spending on munitions is a substantial and consistent component of the defense budget, reflecting the ongoing need to maintain readiness and equip forces. Trends may show increased spending during periods of heightened conflict or significant equipment upgrades, and potentially decreased spending during periods of drawdown or budget austerity. Benchmarking this $40 million award against historical averages would provide context on whether it represents a typical, elevated, or reduced level of investment for this specific category.

How does the pricing of this contract compare to similar ammunition manufacturing contracts awarded to other large defense contractors?

Directly comparing the pricing of this $40 million delivery order to similar contracts is difficult without detailed specifications of the ammunition types, quantities, and quality standards. Alliant Techsystems Operations LLC's pricing would need to be benchmarked against contracts for comparable items awarded to competitors like Northrop Grumman, General Dynamics, or BAE Systems. Factors influencing price include the complexity of the munition, the scale of production, the cost of raw materials, and the specific profit margins negotiated. The 'firm fixed price' nature of this contract suggests that the price was determined upfront, aiming to mitigate cost overruns for the government. A thorough analysis would involve examining unit costs for specific munitions, if available, and assessing the overall value proposition considering the contractor's performance history and the criticality of the supply.

What are the key performance indicators (KPIs) used to evaluate Alliant Techsystems Operations LLC's performance on this contract?

Key performance indicators (KPIs) for a contract like this typically revolve around ensuring the timely delivery of high-quality ammunition that meets stringent military specifications. Specific KPIs would likely include on-time delivery rates, defect or rejection rates (quality assurance), adherence to production schedules, and compliance with safety and environmental regulations. For a firm fixed-price contract, meeting these performance standards is crucial for the contractor to achieve profitability. The Defense Contract Management Agency (DCMA) would likely monitor these KPIs through regular reporting, inspections, and audits. Failure to meet critical KPIs could result in penalties, reduced future contract opportunities, or even contract termination, underscoring the importance of robust performance management for both the government and the contractor.

What is the strategic importance of this ammunition supply to the Department of Defense's overall readiness and operational capabilities?

The strategic importance of this ammunition supply is paramount to the Department of Defense's readiness and operational capabilities. Ammunition is a consumable but critical resource required for the effective employment of virtually all weapon systems, from small arms to heavy artillery and missile systems. Ensuring a consistent and reliable supply of various types of ammunition, as addressed by this contract for non-small arms munitions, is fundamental to maintaining combat effectiveness, supporting training exercises, and projecting power globally. Disruptions in ammunition supply can severely hamper military operations and strategic deployment. Therefore, contracts like this one are vital for sustaining the defense industrial base and guaranteeing that military forces have the necessary munitions to execute their missions under diverse operational scenarios.

Are there any known risks associated with Alliant Techsystems Operations LLC's track record in delivering similar defense manufacturing contracts?

Alliant Techsystems Operations LLC (now part of Northrop Grumman) has a long history of delivering complex defense manufacturing contracts. While specific performance issues or major risks associated with their track record on similar ammunition contracts are not detailed in the provided data, large defense contractors can face challenges. These might include production delays due to supply chain disruptions, quality control issues requiring rework, cost overruns on fixed-price contracts if not managed effectively, or labor-related challenges. However, the fact that they are awarded significant contracts like this suggests a generally positive track record and established capabilities. A deeper risk assessment would involve reviewing past performance evaluations, any reported contract disputes, or significant program overruns attributed to the contractor on comparable projects.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

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: $40,006,053

Exercised Options: $40,006,053

Current Obligation: $40,006,053

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J13D0037

IDV Type: IDC

Timeline