Army awards $13M for 40mm ammunition to American Ordnance LLC, a sole-source contract
Contract Overview
Contract Amount: $13,088,816 ($13.1M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2003-09-16
End Date: 2014-06-30
Contract Duration: 3,940 days
Daily Burn Rate: $3.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200312!001198!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0075 !20030916!20041231!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 !+000003291977!N!N!000000000000!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !1FCN!40MM AMMUNITION ALL TYPES !325920!E! !4! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!A!N!F! ! !N!C!N! ! ! !Z!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: MILAN, GIBSON County, TENNESSEE, 38358
Plain-Language Summary
Department of Defense obligated $13.1 million to AMERICAN ORDNANCE LLC for work described as: 200312!001198!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0075 !20030916!20041231!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 applications. 2. American Ordnance LLC is the sole provider, raising concerns about competition and pricing. 3. The contract duration is over 10 years, indicating a long-term need for this ammunition. 4. The sector is Defense, specifically ammunition procurement, which is a high-priority area.
Value Assessment
Rating: questionable
The contract value of $13M over 10 years for ammunition needs further benchmarking against similar sole-source procurements. Without competitive bids, it's difficult to ascertain if this price represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for the required ammunition.
Public Impact
Ensures continued supply of essential 40mm ammunition for U.S. Army operations. Potential for increased costs due to the absence of competitive bidding. Reliance on a single supplier could create supply chain vulnerabilities. Supports a specific defense contractor, impacting the broader defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of price competition
Positive Signals
- Ensures supply of critical munition
- Supports existing industrial capacity
Sector Analysis
This contract falls within the Defense sector, specifically focusing on ammunition manufacturing. Spending benchmarks for ammunition procurement vary widely based on type and quantity, but sole-source contracts often command higher prices.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to assess small business participation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential overspending. Accountability for the justification of the sole-source award and ongoing performance monitoring is crucial.
Related Government Programs
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competition
- Potential for inflated pricing
- Long-term dependency on a single supplier
- Limited transparency in price discovery
- Risk of supply chain disruption if the sole source faces issues
Tags
department-of-defense, tn, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.1 million to AMERICAN ORDNANCE LLC. 200312!001198!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0075 !20030916!20041231!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 !+000003291977!N!N!000000000000!1310!AMMUNITION, OVER 30 MM UP TO 75 MM !A6 !AMMUNITION !1FCN!40MM AMMUNITION ALL TYPES !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 $13.1 million.
What is the period of performance?
Start: 2003-09-16. End: 2014-06-30.
What is the justification for awarding this contract on a sole-source basis, and has it been reviewed for accuracy and necessity?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For this contract, the specific reason for sole-sourcing 40mm ammunition to American Ordnance LLC needs to be documented and reviewed by contracting officers to ensure it aligns with federal procurement regulations and serves the best interest of the government.
How does the per-unit cost of this ammunition compare to similar contracts awarded competitively, if available?
Without access to competitive benchmarks for 40mm ammunition, it is challenging to definitively assess the value for money. A thorough analysis would involve comparing this contract's pricing against historical competitive awards for similar specifications or market research data to identify any significant deviations that might indicate overpricing due to the sole-source nature.
What measures are in place to ensure the effectiveness and quality of the 40mm ammunition supplied under this long-term, sole-source contract?
Ensuring effectiveness and quality under a sole-source contract relies heavily on robust government oversight, stringent quality assurance procedures, and clear performance metrics. The Army must implement rigorous inspection and testing protocols throughout the contract lifecycle to verify that the ammunition meets all required specifications and performance standards, mitigating risks associated with a single supplier.
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: 2003-09-16
Current End Date: 2014-06-30
Potential End Date: 2014-06-30 00:00:00
Last Modified: 2014-10-22
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