Army awards $618.7M contract for 75-125mm ammunition, with Northrop Grumman as a key player

Contract Overview

Contract Amount: $11,859,031 ($11.9M)

Contractor: Northrop Grumman Innovation Systems LLC

Awarding Agency: Department of Defense

Start Date: 2003-04-25

End Date: 2006-09-29

Contract Duration: 1,253 days

Daily Burn Rate: $9.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Defense

Official Description: 200308!000660!2100!AE30 !TACOM - PICATINNY !DAAE3003C1108 !A!N! !N! !20030425!20041024!618705925!618705925!618705925!N!ALLIANT TECHSYSTEMS INC !5050 LINCOLN DRIVE !EDINA !MN!55436!02026!123!27!ARDEN HILLS !RAMSEY !MINNESOTA !+000002274092!N!N!000000000000!1315!AMMUNITION, 75 MM THROUGH 125 MM !A6 !AMMUNITION !1FFN!105MM TANK AMMO ALL TYPES !332992!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!002!N!3A!A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to NORTHROP GRUMMAN INNOVATION SYSTEMS LLC for work described as: 200308!000660!2100!AE30 !TACOM - PICATINNY !DAAE3003C1108 !A!N! !N! !20030425!20041024!618705925!618705925!618705925!N!ALLIANT TECHSYSTEMS INC !5050 LINCOLN DRIVE !EDINA !MN!55436!02026!123!27!ARDEN HILLS !RAMSE… Key points: 1. Contract value of $618.7 million for a diverse range of ammunition. 2. Competition was full and open after exclusion of sources, indicating a structured procurement process. 3. Contract duration of 1253 days suggests a significant, long-term supply need. 4. The award to Alliant Techsystems Inc. highlights their role in defense manufacturing. 5. Northrop Grumman Innovation Systems LLC is listed as a contractor, potentially for components or related services. 6. The specific National Stock Number (NSN) points to a focus on medium caliber ammunition.

Value Assessment

Rating: good

The contract value of $618.7 million for ammunition appears reasonable given the quantity and type of munitions procured over its duration. Benchmarking against similar large-scale ammunition contracts would provide further context, but the scale suggests a significant procurement effort. The contract's duration of over three years indicates a sustained need, and the total value reflects the ongoing demand for these specific ammunition types.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources.' This suggests that while the competition was broad, certain sources may have been excluded based on specific criteria or prior arrangements. The fact that it was not a completely unrestricted full and open competition might imply some level of pre-qualification or a specific set of eligible bidders, which could influence the number of actual bids received and the ultimate pricing.

Taxpayer Impact: The 'full and open competition after exclusion of sources' approach aims to balance broad market access with specific procurement needs, potentially leading to competitive pricing while ensuring specialized requirements are met.

Public Impact

The primary beneficiaries are the U.S. Army units requiring 75mm through 125mm ammunition for training and operational readiness. This contract ensures the supply of critical munitions, supporting the Army's combat effectiveness. The geographic impact is national, with production likely occurring at various defense manufacturing facilities across the U.S. The contract supports jobs within the defense manufacturing sector, particularly in ammunition production and related supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Dependence on a limited number of specialized manufacturers for critical components.
Risk of cost overruns if raw material prices fluctuate significantly.
Ensuring consistent quality control across large production runs.

Positive Signals

Alliant Techsystems Inc. has a strong track record in defense manufacturing.
The contract's duration suggests a stable, long-term demand, providing predictability for the contractor.
The 'full and open competition' aspect, even with exclusions, generally drives competitive pricing.
The specific nature of the ammunition indicates a well-defined requirement, reducing scope creep risks.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for military ammunition is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and long-term government contracts. Spending in this area is driven by military readiness needs, geopolitical factors, and modernization programs. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by the Department of Defense.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss=false, sb=false). Therefore, the primary contractor, Alliant Techsystems Inc., is likely a large business. While there are no direct set-aside provisions mentioned, large defense contracts often include subcontracting requirements. It is possible that small businesses could be involved as subcontractors for specific components or services, contributing to the broader small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting command, likely TACOM (Tank-Automotive and Armaments Command), given the PICATINNY designation. Accountability measures would include performance metrics, delivery schedules, and quality assurance protocols. Transparency is facilitated through contract databases like FPDS, where this award is recorded. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Vehicle Ammunition
Medium Caliber Ammunition Manufacturing
Defense Industrial Base Ammunition
Northrop Grumman Defense Contracts

Risk Flags

Potential for supply chain vulnerabilities.
Dependence on specific raw materials.
Quality assurance challenges in mass production.
Long-term storage and obsolescence risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to NORTHROP GRUMMAN INNOVATION SYSTEMS LLC. 200308!000660!2100!AE30 !TACOM - PICATINNY !DAAE3003C1108 !A!N! !N! !20030425!20041024!618705925!618705925!618705925!N!ALLIANT TECHSYSTEMS INC !5050 LINCOLN DRIVE !EDINA !MN!55436!02026!123!27!ARDEN HILLS !RAMSEY !MINNESOTA !+000002274092!N!N!000000000000!1315!AMMUNITION, 75 MM THROUGH 125 MM !A6 !AMMUNITION !1FFN!105MM TANK AMMO ALL TYPES !332992!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 (Department of the Army).

What is the total obligated amount?

The obligated amount is $11.9 million.

What is the period of performance?

Start: 2003-04-25. End: 2006-09-29.

What is the specific type and quantity of ammunition covered by this contract?

The contract specifies ammunition for 75mm through 125mm calibers, with a primary National Stock Number (NSN) of 1315, which corresponds to 'AMMUNITION, 75 MM THROUGH 125 MM'. The description also includes 'AMMUNITION, 75 MM THROUGH 125 MM' and 'AMMUNITION'. While the exact quantities for each specific round (e.g., 105mm tank ammo) are not explicitly detailed in the provided data snippet, the total contract value of $618,705,925 suggests a substantial volume procurement over the contract's duration. The mention of '105MM TANK AMMO ALL TYPES' indicates a significant portion of the contract likely focuses on this specific caliber.

How does the pricing of this contract compare to similar ammunition procurements?

Direct per-unit cost comparison is challenging without knowing the exact mix of ammunition types and quantities within the $618.7 million award. However, the contract was awarded through a 'full and open competition after exclusion of sources,' which generally aims to achieve competitive pricing. The duration of over three years (1253 days) also suggests a bulk procurement, which can sometimes lead to lower unit costs compared to smaller, ad-hoc purchases. To perform a robust comparison, one would need to analyze historical pricing data for similar caliber ammunition from the DoD and benchmark the average unit cost implied by this contract against those historical figures, accounting for inflation and specific technical requirements.

What are the primary risks associated with this ammunition supply contract?

Key risks include potential supply chain disruptions, especially given the specialized nature of ammunition manufacturing and reliance on specific raw materials. Geopolitical events could impact material availability or cost. There's also a risk related to the shelf-life and storage requirements of ammunition, necessitating careful inventory management. Furthermore, technological advancements in munitions could render current types obsolete, although this is less likely for established calibers like 75-125mm. Ensuring consistent quality control across large production runs is another critical risk area, as defects could have severe operational consequences.

What is the track record of Alliant Techsystems Inc. in fulfilling large defense contracts?

Alliant Techsystems Inc. (ATK), now part of Northrop Grumman, has a long and extensive history of manufacturing ammunition and other defense products for the U.S. military. They have been a major supplier of various munitions, including small, medium, and large caliber rounds, as well as propellants and related energetic materials. Their track record generally includes successful execution of numerous large-scale, multi-year contracts with the Department of Defense. While specific performance details for every contract are not publicly available, ATK's sustained presence and significant role in the defense industrial base suggest a strong capability in meeting demanding production schedules and quality standards.

How does this contract fit into the broader context of Army modernization or readiness efforts?

This contract directly supports the U.S. Army's ongoing readiness requirements by ensuring a steady supply of essential medium-caliber ammunition. While not directly tied to a specific 'modernization' program in terms of entirely new weapon systems, maintaining adequate stocks of current ammunition types is fundamental to the Army's ability to train effectively and deploy forces. The 75mm-125mm range covers calibers used in various armored vehicles and artillery systems, making this procurement critical for maintaining the operational capability of these platforms. Consistent funding for such sustainment contracts is vital for the Army's long-term force projection and deterrence capabilities.

What is the significance of Northrop Grumman Innovation Systems LLC being listed as a contractor?

Northrop Grumman Innovation Systems LLC (NGIS) is a major defense contractor and is the parent entity that acquired Alliant Techsystems Inc. (ATK) in 2018. Therefore, NGIS is essentially the prime contractor or a significant division responsible for fulfilling this contract awarded to ATK's legacy operations. Its involvement signifies the integration of ATK's ammunition manufacturing capabilities within the larger Northrop Grumman portfolio. This integration likely provides synergistic benefits in terms of supply chain management, research and development, and overall program execution, leveraging the broader resources and expertise of Northrop Grumman.

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: COMBINATION (TWO OR MORE) (2)

Contractor Details

Address: 5050 LINCOLN DRIVE, EDINA, MN, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $359,915

Exercised Options: $359,915

Current Obligation: $11,859,031

Contract Characteristics

Cost or Pricing Data: NO

Timeline