DoD awards $618.7M contract for Ammunition Manufacturing to Alliant Techsystems, raising competition concerns

Contract Overview

Contract Amount: $79,433,745 ($79.4M)

Contractor: Northrop Grumman Innovation Systems LLC

Awarding Agency: Department of Defense

Start Date: 2002-09-24

End Date: 2007-06-30

Contract Duration: 1,740 days

Daily Burn Rate: $45.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 200212!001233!2100!AE30 !TACOM - PICATINNY !DAAE3002C1118 !A!N! !N! !20020924!20040624!618705925!618705925!618705925!N!ALLIANT TECHSYSTEMS !5050 LINCOLN DRIVE !EDINA !MN!55436!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000015571435!N!N!000000000000!AC55!RDTE/WEAPONS-ENG/MANUF DEVELOP !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !332993!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!V!1!001!N!1A!C!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001!

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $79.4 million to NORTHROP GRUMMAN INNOVATION SYSTEMS LLC for work described as: 200212!001233!2100!AE30 !TACOM - PICATINNY !DAAE3002C1118 !A!N! !N! !20020924!20040624!618705925!618705925!618705925!N!ALLIANT TECHSYSTEMS !5050 LINCOLN DRIVE !EDINA !MN!55436!51730!053!27!PLYMOUTH !HENNE… Key points: 1. The contract value of $618.7 million for ammunition manufacturing is substantial. 2. Alliant Techsystems, a major defense contractor, secured this award. 3. The 'NOT COMPETED' status raises significant concerns about fair pricing and market fairness. 4. The sector is Defense, specifically Ammunition Manufacturing.

Value Assessment

Rating: questionable

The contract value is $618.7 million. Without competitive bidding, it's difficult to benchmark against similar contracts to assess if the pricing is optimal. The 'NOT COMPETED' status suggests potential for overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for ammunition manufacturing services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The defense supply chain for ammunition could be less resilient without broader industry participation. Lack of transparency in pricing could erode public trust in defense spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Positive Signals

Award to established contractor
Definitive contract provides clarity

Sector Analysis

This contract falls within the Defense sector, specifically Ammunition (except Small Arms) Manufacturing. Spending in this area is critical for national security, but often involves specialized capabilities where competition can be limited.

Small Business Impact

The data does not indicate any specific provisions or benefits for small businesses in this contract award. The focus appears to be on a large, established prime contractor.

Oversight & Accountability

The 'NOT COMPETED' designation warrants further scrutiny from oversight bodies to ensure the government received fair value and that the decision not to compete was justified.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated costs
Limited transparency in pricing
Risk of vendor lock-in
Reduced innovation incentives

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $79.4 million to NORTHROP GRUMMAN INNOVATION SYSTEMS LLC. 200212!001233!2100!AE30 !TACOM - PICATINNY !DAAE3002C1118 !A!N! !N! !20020924!20040624!618705925!618705925!618705925!N!ALLIANT TECHSYSTEMS !5050 LINCOLN DRIVE !EDINA !MN!55436!51730!053!27!PLYMOUTH !HENNEPIN !MINNESOTA !+000015571435!N!N!000000000000!AC55!RDTE/WEAPONS-ENG/MANUF DEVELOP !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !332993!E! !3! ! ! ! ! !99990909!B

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $79.4 million.

What is the period of performance?

Start: 2002-09-24. End: 2007-06-30.

What was the justification for not competing this significant ammunition manufacturing contract?

The justification for not competing this contract is not explicitly detailed in the provided data. Typically, sole-source awards require a strong justification, such as unique capabilities, urgent need, or lack of available sources. Without this information, it's impossible to assess the validity of the non-competitive decision.

How can the government ensure fair pricing without competition for specialized defense manufacturing?

Ensuring fair pricing without competition is challenging. The government can employ robust cost analysis, independent government cost estimates, and detailed audits of contractor expenses. Negotiating strong incentive clauses within the contract type (like Cost Plus Incentive Fee) can also align contractor and government interests towards cost efficiency.

What is the potential long-term impact on defense readiness if only a few large contractors dominate ammunition manufacturing?

If only a few large contractors dominate ammunition manufacturing, it could lead to reduced innovation, higher prices due to lack of competition, and potential supply chain vulnerabilities. It might also limit the government's ability to rapidly scale production during crises or adapt to new technological requirements.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 5050 LINCOLN DRIVE, EDINA, MN, 55436

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline