Army Awards $618.7M Contract for Ammunition to Alliant Techsystems, Later Acquired by Northrop Grumman
Contract Overview
Contract Amount: $145,014,446 ($145.0M)
Contractor: Northrop Grumman Innovation Systems LLC
Awarding Agency: Department of Defense
Start Date: 1999-08-31
End Date: 2007-02-28
Contract Duration: 2,738 days
Daily Burn Rate: $53.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 199911!2100!0725!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0999C0066 !A!*!* !19990831!20020228!618705925!618705925!618705925!N!0MVU4!ALLIANT TECHSYSTEMS INC !600 2ND ST NE !HOPKINS !MN!55343!30140!053!27!HOPKINS !HENNEPIN !MINNESOTA !0001!+000000084038!Y!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !3483!3!*!*!*!B!A!*!A !N!J!2!002!N!3A!A!N!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $145.0 million to NORTHROP GRUMMAN INNOVATION SYSTEMS LLC for work described as: 199911!2100!0725!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0999C0066 !A!*!* !19990831!20020228!618705925!618705925!618705925!N!0MVU4!ALLIANT TECHSYSTEMS INC !600 2ND ST NE !HOPKINS !MN!55343!30140!053!27!HOPKINS !HENNEP… Key points: 1. The contract, awarded in 1999, was for ammunition and had a total value of $618.7 million. 2. Alliant Techsystems Inc. was the original awardee, with Northrop Grumman Innovation Systems LLC listed as a competitor or successor. 3. The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a specific procurement process. 4. The sector is primarily manufacturing, specifically Small Arms Ammunition Manufacturing (NAICS 332992).
Value Assessment
Rating: fair
The contract value of $618.7 million over nearly 8 years suggests a significant but potentially variable annual spend. Benchmarking against similar ammunition contracts from the late 1990s would be necessary for a precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The procurement method 'Full and Open Competition After Exclusion of Sources' is unusual and warrants further investigation. It suggests that while competition was sought, certain sources were initially excluded, potentially impacting price discovery and overall market reach.
Taxpayer Impact: The substantial contract value indicates a significant taxpayer investment in defense procurement. The specific competition method raises questions about whether the most cost-effective solutions were secured for the government.
Public Impact
Taxpayers funded a large contract for essential military supplies. The procurement process may have limited competitive options, potentially affecting cost-efficiency. The long duration of the contract suggests sustained demand for these ammunition types. The eventual acquisition of Alliant Techsystems by Northrop Grumman highlights consolidation within the defense industry.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Unclear competition rationale ('Exclusion of Sources')
- Long contract duration (nearly 8 years)
- Potential for limited price discovery due to competition method
Positive Signals
- Awarded to a major defense contractor
- Procurement of essential military supplies
- Significant contract value indicates a substantial requirement
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. Spending benchmarks in this area are highly dependent on the type and quantity of munitions required, as well as geopolitical factors influencing demand.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as both the awardee (Alliant Techsystems) and competitor (Northrop Grumman) are large defense corporations. There is no indication of small business subcontracting in the provided data.
Oversight & Accountability
The 'Full and Open Competition After Exclusion of Sources' method raises questions about the oversight applied during the solicitation and award process. Further review of the justification for excluding sources would be necessary to assess accountability.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Ambiguous competition method ('Exclusion of Sources')
- Lack of detailed cost breakdown for benchmarking
- Potential for reduced competition impacting value
- Long contract duration without clear performance metrics
- Consolidation of defense contractors may affect future competition
Tags
small-arms-ammunition-manufacturing, department-of-defense, az, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $145.0 million to NORTHROP GRUMMAN INNOVATION SYSTEMS LLC. 199911!2100!0725!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0999C0066 !A!*!* !19990831!20020228!618705925!618705925!618705925!N!0MVU4!ALLIANT TECHSYSTEMS INC !600 2ND ST NE !HOPKINS !MN!55343!30140!053!27!HOPKINS !HENNEPIN !MINNESOTA !0001!+000000084038!Y!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !3483!3!*!*!*!B!A!*!A !N!J!2!0
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN INNOVATION SYSTEMS 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 $145.0 million.
What is the period of performance?
Start: 1999-08-31. End: 2007-02-28.
What was the specific justification for excluding certain sources in this 'Full and Open Competition After Exclusion of Sources' procurement, and how did this impact the final price?
The justification for excluding sources in this procurement is not detailed in the provided data. Typically, such exclusions are based on factors like proprietary technology, specific security requirements, or prior performance. Without this justification, it's difficult to definitively assess its impact on price discovery. However, excluding potential bidders generally reduces competition, which can lead to higher prices than a truly open competition might achieve.
How does the per-unit cost of ammunition under this contract compare to contemporary market rates, considering the contract's duration and the specific types of ammunition procured?
A direct per-unit cost comparison is not possible with the provided data, as it lacks specific itemization and quantities. The contract's duration (nearly 8 years) and the broad category 'AMMUNITION, THROUGH 30 MM' make a simple benchmark challenging. Market rates fluctuate based on material costs, production volume, and geopolitical demand. A detailed analysis would require comparing specific munition types and quantities against historical pricing data from similar contracts awarded around the same period.
What was the effectiveness of this contract in ensuring the timely and reliable supply of ammunition to the U.S. Army, given its significant value and long duration?
The effectiveness of the contract in ensuring timely and reliable supply cannot be fully determined from the provided data alone. However, the substantial value ($618.7 million) and long duration (nearly 8 years) suggest a significant and ongoing requirement for the specified ammunition. The fact that the contract was fulfilled without apparent major disruptions (based on available data) implies a degree of effectiveness, though specific performance metrics are absent.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 600 2ND ST NE, HOPKINS, MN, 03
Business Categories: Category Business, Not Designated a Small Business
Timeline
Start Date: 1999-08-31
Current End Date: 2007-02-28
Potential End Date: 2008-03-30 00:00:00
Last Modified: 2008-07-07
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