Army awards $154.8M for 40mm ammunition to American Ordnance LLC, a sole-source contract
Contract Overview
Contract Amount: $15,488,712 ($15.5M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2001-09-26
End Date: 2011-06-30
Contract Duration: 3,564 days
Daily Burn Rate: $4.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200112!000949!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N!*!N!0045 !20010926!20031024!037744765!037744765!011148157!N!AMERICAN ORDNANCE LLC, MILAN O!2280 HWY 104, SUITE 2 !MILAN !TN!38358!48680!017!47!MILAN ARMY AMMUNITIO!CARROLL !TENNESSEE !+000016433865!N!N!000000000000!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !1FCN!40MM AMMUNITION ALL TYPES !325920!*!*!4! ! ! !*!*!*!B!*!*!A! !D !N!J!1!001!N!1G!A!N!F! ! !N!C!N! ! ! !A!Z!A!A!000!A!C!N! ! ! ! ! ! !0001!
Place of Performance
Location: MILAN, GIBSON County, TENNESSEE, 38358
Plain-Language Summary
Department of Defense obligated $15.5 million to AMERICAN ORDNANCE LLC for work described as: 200112!000949!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N!*!N!0045 !20010926!20031024!037744765!037744765!011148157!N!AMERICAN ORDNANCE LLC, MILAN O!2280 HWY 104, SUITE 2 !MILAN !TN!38358!48680!017!47!MILAN ARMY AMMUNITIO!CARRO… Key points: 1. The contract is for 40mm ammunition, a critical component for various military operations. 2. American Ordnance LLC is the sole awardee, indicating a lack of competition for this specific procurement. 3. The contract value of $154.8 million represents a significant investment in ammunition supply. 4. The sector is Defense, specifically focusing on ammunition procurement for the U.S. Army.
Value Assessment
Rating: fair
The contract value is substantial at $154.8 million. Without competitive bids, it's difficult to assess if this price represents fair market value compared to similar ammunition contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The sole-source nature of this award may result in a higher cost to taxpayers than if the contract had been competitively bid.
Public Impact
Ensures a consistent supply of 40mm ammunition for U.S. Army operations. Supports a single contractor, potentially impacting market dynamics for ammunition production. Raises questions about the justification for a sole-source award and potential cost implications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Potential for overpayment due to lack of competitive bidding.
- Long contract duration (over 10 years) may not reflect current market conditions.
Positive Signals
- Ensures critical ammunition supply for the U.S. Army.
- Supports a domestic manufacturer for defense needs.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on the procurement of ammunition. Spending benchmarks for ammunition can vary widely based on type, quantity, and geopolitical factors.
Small Business Impact
The awardee, American Ordnance LLC, is not identified as a small business. This contract does not appear to include specific provisions or set-asides for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the justification is sound and that taxpayer funds are being used efficiently. Further review of the procurement process is recommended.
Related Government Programs
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award.
- Lack of transparency in price discovery.
- Potential for inflated costs.
- Long contract duration without clear performance metrics.
- Limited visibility into contractor's production capacity and cost structure.
Tags
department-of-defense, tn, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.5 million to AMERICAN ORDNANCE LLC. 200112!000949!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N!*!N!0045 !20010926!20031024!037744765!037744765!011148157!N!AMERICAN ORDNANCE LLC, MILAN O!2280 HWY 104, SUITE 2 !MILAN !TN!38358!48680!017!47!MILAN ARMY AMMUNITIO!CARROLL !TENNESSEE !+000016433865!N!N!000000000000!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !1FCN!40MM AMMUNITION ALL TYPES !325920!*!*!4! ! ! !*!*!*!B!*!*!A!
Who is the contractor on this award?
The obligated recipient is AMERICAN ORDNANCE 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 $15.5 million.
What is the period of performance?
Start: 2001-09-26. End: 2011-06-30.
What is the justification for awarding this contract on a sole-source basis, and has the government explored all avenues for competition?
The provided data indicates a sole-source award, labeled as 'NOT COMPETED'. The specific justification for this approach is not detailed in the data. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation, it's impossible to confirm the validity of the justification or if alternative competitive strategies were considered.
How does the per-unit cost of this 40mm ammunition compare to industry benchmarks or previous contracts for similar items?
The data does not provide a per-unit cost, only the total contract value and quantity. To assess value for money, a detailed cost breakdown and comparison with industry benchmarks or historical pricing for 40mm ammunition would be necessary. The absence of competitive bidding makes this comparison even more critical to ensure fair pricing.
What is the long-term strategic impact of awarding a significant ammunition contract solely to one provider?
Awarding a large, long-term contract to a single provider can create dependency and potentially stifle innovation or price competition in the broader ammunition market. While it ensures a stable supply chain for this specific contract, it may limit future sourcing options and potentially increase long-term costs if the sole provider's pricing escalates without competitive pressure.
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
Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 01
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2001-09-26
Current End Date: 2011-06-30
Potential End Date: 2011-06-30 00:00:00
Last Modified: 2014-07-08
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