Army awards $116.8M contract for demolition materials to American Ordnance LLC
Contract Overview
Contract Amount: $11,681,252 ($11.7M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2003-02-19
End Date: 2012-12-31
Contract Duration: 3,603 days
Daily Burn Rate: $3.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200305!000456!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0070 !20030219!20031031!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 !+000001851489!N!N!000000000000!1375!DEMOLITION MATERIALS !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !325920!E! !4! ! ! ! ! !99990909!B! ! !N!B!D!N!J!1!001!N!1G!A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: MILAN, GIBSON County, TENNESSEE, 38358
Plain-Language Summary
Department of Defense obligated $11.7 million to AMERICAN ORDNANCE LLC for work described as: 200305!000456!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0070 !20030219!20031031!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 demolition materials, a critical component for military operations. 2. American Ordnance LLC is the sole awardee, raising questions about competition. 3. The contract value is substantial, requiring careful oversight to ensure value for money. 4. The sector is defense, specifically ammunition and explosives, which are highly specialized.
Value Assessment
Rating: questionable
The contract value of $116.8 million for demolition materials is significant. Without comparable contract data or a competitive bidding process, it is difficult to assess if this price is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition on this large contract could result in taxpayers paying more than necessary for essential demolition materials.
Public Impact
Ensures the availability of critical demolition materials for U.S. Army operations. Supports a single contractor, potentially impacting market dynamics for this specialized product. Raises concerns about the cost-effectiveness due to the sole-source nature of the award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- Potential for overpayment
Positive Signals
- Ensures supply of critical materials
- Supports existing defense industrial base
Sector Analysis
This contract falls within the defense sector, specifically concerning the procurement of ammunition and explosives. Spending in this area is often driven by operational needs and can involve specialized manufacturing capabilities.
Small Business Impact
The award to American Ordnance LLC does not appear to involve small business participation based on the provided data. Further investigation would be needed to confirm if any subcontracting opportunities were mandated or utilized.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure that the pricing is fair and reasonable and that the government is receiving good value. Transparency in the justification for the sole-source award is crucial.
Related Government Programs
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated costs
- Limited transparency in award justification
- No clear indication of small business utilization
Tags
department-of-defense, tn, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $11.7 million to AMERICAN ORDNANCE LLC. 200305!000456!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0070 !20030219!20031031!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 !+000001851489!N!N!000000000000!1375!DEMOLITION MATERIALS !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !325920!E! !4! ! ! ! ! !99990909!B
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 $11.7 million.
What is the period of performance?
Start: 2003-02-19. End: 2012-12-31.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of adequate competition. For this specific contract, the data indicates 'NOT COMPETED,' suggesting a deliberate decision to bypass the competitive bidding process. Further documentation would be required to understand the precise reasons, such as the specialized nature of demolition materials or the existing relationship with American Ordnance LLC.
How can the government ensure fair pricing without a competitive process?
Even in sole-source procurements, the government must ensure fair and reasonable pricing. This is typically achieved through robust cost analysis, price negotiation, and reliance on historical pricing data or independent cost estimates. For this $116.8 million contract, the Department of Defense would likely conduct detailed audits of the contractor's cost structure and profit margins to validate the proposed price.
What is the long-term impact of sole-source contracts on the defense supply chain?
Sole-source contracts can reduce competition over time, potentially leading to higher prices and less innovation within the defense supply chain. While they can ensure the availability of critical or specialized items, a consistent reliance on them may stifle market growth and create dependencies. For demolition materials, this could mean fewer suppliers are incentivized to enter or remain in the market, impacting future procurement options.
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: 2003-02-19
Current End Date: 2012-12-31
Potential End Date: 2012-12-31 00:00:00
Last Modified: 2014-07-08
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