Army awards $38.5M for 125mm ammunition to American Ordnance LLC
Contract Overview
Contract Amount: $38,510,090 ($38.5M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2005-09-26
End Date: 2008-06-30
Contract Duration: 1,008 days
Daily Burn Rate: $38.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200512!002199!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0090 ! !20050926!20070630!037743833!037743833!011148157!N!AMERICAN ORDNANCE LLC !17575 HIGHWAY 79 !MIDDLETOWN !IA!52638!51735!057!19!MIDDLETOWN !DES MOINES !IOWA !+000022043571!N!N!000000000000!1320!AMMUNITION, OVER 125 MM !A6 !AMMUNITION !000 !* !325920!E! !4! ! ! ! ! !20200930!B! ! !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: MIDDLETOWN, DES MOINES County, IOWA, 52638
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $38.5 million to AMERICAN ORDNANCE LLC for work described as: 200512!002199!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0090 ! !20050926!20070630!037743833!037743833!011148157!N!AMERICAN ORDNANCE LLC !17575 HIGHWAY 79 !MIDDLETOWN !IA!52638!51735!057!19!MIDDLETOWN !DES … Key points: 1. The contract is for ammunition, specifically over 125mm caliber. 2. American Ordnance LLC is the sole contractor for this specific item. 3. The contract was awarded as 'NOT COMPETED', raising potential concerns about price discovery. 4. The sector is Defense, with a focus on ammunition procurement.
Value Assessment
Rating: fair
The contract value of $38.5 million over approximately 2.8 years suggests a significant but not exorbitant annual spend. Without specific unit pricing or comparison data, it's difficult to definitively assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded as 'NOT COMPETED', indicating a sole-source or limited competition scenario. This method can lead to higher prices if not carefully managed and justified, as there is less pressure from market forces.
Taxpayer Impact: The lack of competitive bidding may result in taxpayers paying a premium for this ammunition, as the government did not explore potentially lower-cost alternatives.
Public Impact
Ensures continued supply of critical ammunition for Army operations. Potential for higher costs due to lack of competition impacts overall defense budget. Supports a specific defense contractor, potentially impacting the broader defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award justification
- Potential for overpricing
Positive Signals
- Ensures supply of essential defense material
- Contract awarded to a known entity
Sector Analysis
This contract falls within the Defense sector, specifically focusing on the procurement of large-caliber ammunition. Spending benchmarks for ammunition can vary widely based on type, quantity, and geopolitical factors, but this award represents a substantial investment in a specific munition.
Small Business Impact
There is no indication in the provided data whether small businesses were involved as subcontractors or partners in this contract. Further investigation would be needed to determine any small business participation.
Oversight & Accountability
The 'NOT COMPETED' status warrants scrutiny to ensure the justification for sole-source procurement is robust and that the pricing is fair and reasonable. Oversight should focus on the necessity of this approach and the diligence in price negotiation.
Related Government Programs
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on price justification
Tags
department-of-defense, ia, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.5 million to AMERICAN ORDNANCE LLC. 200512!002199!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0998G0011 !A!N! !N!0090 ! !20050926!20070630!037743833!037743833!011148157!N!AMERICAN ORDNANCE LLC !17575 HIGHWAY 79 !MIDDLETOWN !IA!52638!51735!057!19!MIDDLETOWN !DES MOINES !IOWA !+000022043571!N!N!000000000000!1320!AMMUNITION, OVER 125 MM !A6 !AMMUNITION !000 !* !325920!E! !4! ! ! ! ! !202
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 $38.5 million.
What is the period of performance?
Start: 2005-09-26. End: 2008-06-30.
What is the justification for awarding this contract on a sole-source basis, and how was the price determined to be fair and reasonable?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of viable alternatives. Without access to the contract file, the specific reason for 'NOT COMPETED' is unknown. Price reasonableness is usually assessed through cost analysis, historical pricing, or comparison to similar items, but the effectiveness of this process is harder to gauge without competition.
What is the potential risk to the government if American Ordnance LLC is the only provider of this specific ammunition?
The primary risk is a lack of leverage in price negotiations and potential supply chain vulnerabilities. If American Ordnance LLC faces production issues or decides to increase prices significantly, the Army may have limited options for sourcing this critical munition, potentially impacting readiness and increasing costs.
How effective is this contract in ensuring the long-term availability and affordability of 125mm ammunition for the U.S. Army?
The effectiveness in ensuring long-term availability is high, as a specific provider is contracted. However, affordability is questionable due to the sole-source nature. Without competition, there's less incentive for the contractor to offer the lowest possible price, potentially making the ammunition less affordable over time.
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: 2005-09-26
Current End Date: 2008-06-30
Potential End Date: 2008-06-30 00:00:00
Last Modified: 2014-07-08
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