Department of Energy's $301.6M ammunition contract awarded to MASON & HANGER CORP shows fair value with 2 bids
Contract Overview
Contract Amount: $301,615,215 ($301.6M)
Contractor: Mason & Hanger Corp
Awarding Agency: Department of Energy
Start Date: 1999-10-15
End Date: 2001-07-31
Contract Duration: 655 days
Daily Burn Rate: $460.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: AMARILLO, POTTER County, TEXAS, 79120
State: Texas Government Spending
Plain-Language Summary
Department of Energy obligated $301.6 million to MASON & HANGER CORP for work described as: Key points: 1. The contract's value appears reasonable given the scope and duration. 2. Competition was limited, with only two bids received, potentially impacting price discovery. 3. The contract type (Cost Plus Award Fee) can incentivize performance but requires robust oversight. 4. Performance context is limited due to the age of the contract and lack of detailed performance data. 5. This contract falls within the manufacturing sector, specifically ammunition production. 6. The small business participation was not a stated requirement for this contract.
Value Assessment
Rating: fair
The contract's total value of approximately $301.6 million over its period of performance suggests a significant investment. Benchmarking this against similar large-scale ammunition manufacturing contracts is challenging without more specific details on the types and quantities of ammunition produced. However, the award value relative to the number of bids received indicates a potentially fair, though not highly competitive, market price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is generally positive for price discovery. However, only two bids were received, suggesting that the market for this specific type of ammunition manufacturing may be concentrated or that barriers to entry are high. This limited competition could mean that the government did not receive the full benefit of a broader competitive landscape.
Taxpayer Impact: While full and open competition was utilized, the low number of bidders means taxpayers may not have benefited from the most aggressive pricing that a larger pool of competitors could have offered.
Public Impact
The primary beneficiary is the Department of Energy, ensuring a supply of ammunition for its operations. The services delivered include the manufacturing of ammunition, supporting national security and energy infrastructure protection. The contract was performed in Texas, indicating a geographic impact on the state's economy and workforce. Workforce implications include job creation and maintenance within the ammunition manufacturing sector in Texas.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (2 bidders) may have resulted in higher costs for taxpayers.
- Cost Plus Award Fee contracts require diligent oversight to prevent cost overruns and ensure value.
- Lack of detailed performance metrics makes it difficult to assess contractor efficiency and effectiveness.
- The age of the contract (awarded 1999) means current market conditions and technology may differ significantly.
Positive Signals
- Awarded under full and open competition, theoretically allowing any qualified vendor to bid.
- The contract was awarded to a single contractor, MASON & HANGER CORP, suggesting they met all requirements.
- The contract was successfully completed within its period of performance.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for specialized ammunition manufacturing is often characterized by high barriers to entry due to technical expertise, capital investment, and regulatory requirements. Comparable spending benchmarks would typically be found within defense procurement data for similar munitions, but specific details are needed for a precise comparison.
Small Business Impact
This contract did not include a small business set-aside, nor is there an indication of significant subcontracting opportunities for small businesses. The primary contractor, MASON & HANGER CORP, is likely a large entity. This means the direct economic impact on the small business ecosystem for this specific award is expected to be minimal.
Oversight & Accountability
The oversight for this contract would have been managed by the Department of Energy. As a Cost Plus Award Fee contract, oversight would focus on monitoring costs, ensuring compliance with contract terms, and evaluating performance against award fee criteria. Transparency would depend on the agency's reporting practices for such contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense Ammunition Procurement
- Ordnance Manufacturing Contracts
- Energy Sector Security Contracts
Risk Flags
- Limited competition
- Cost Plus Award Fee contract type requires careful oversight
Tags
defense, ammunition-manufacturing, department-of-energy, cost-plus-award-fee, full-and-open-competition, mason-&-hanger-corp, texas, large-contract, historical-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $301.6 million to MASON & HANGER CORP. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is MASON & HANGER CORP.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $301.6 million.
What is the period of performance?
Start: 1999-10-15. End: 2001-07-31.
What was the specific type and quantity of ammunition manufactured under this contract?
The provided data indicates the contract was for 'Ammunition (except Small Arms) Manufacturing' under NAICS code 332993. However, the specific types and quantities of ammunition produced are not detailed in the available information. This level of detail is crucial for a thorough value assessment, as different types of ammunition have vastly different production costs and market values. Without this, comparisons to industry benchmarks or other contracts are necessarily broad.
How does the per-unit cost of this ammunition compare to market rates or similar government contracts?
A precise per-unit cost comparison is not possible with the given data. The contract value is $301.6 million, and the number of units produced is unknown. Furthermore, the contract type (Cost Plus Award Fee) means the final cost could vary based on performance incentives. To perform this analysis, detailed production quantities and unit costs would be required, along with data from comparable contracts for the same or similar ammunition types.
What was the track record of MASON & HANGER CORP with the Department of Energy or similar agencies prior to this award?
Information on MASON & HANGER CORP's prior track record with the Department of Energy or similar agencies is not provided in the data. A comprehensive assessment would involve reviewing their past performance on relevant contracts, including on-time delivery, quality control, and cost management. Their history would offer insights into their reliability and capability in fulfilling large-scale ammunition manufacturing requirements.
What were the specific performance criteria and award fee structure for this contract?
The data indicates the contract type was 'COST PLUS AWARD FEE' (CPAF), but the specific performance criteria and the structure of the award fee are not detailed. CPAF contracts typically incentivize contractors to meet or exceed certain performance targets (e.g., quality, delivery schedule, cost control) by offering additional profit. Understanding these criteria is essential for evaluating whether the contractor achieved optimal performance and if the fee structure effectively drove desired outcomes.
How has the Department of Energy's spending on ammunition manufacturing evolved since this contract was awarded?
This contract was awarded in 1999 and completed in 2001. Analyzing the Department of Energy's spending on ammunition manufacturing since then would require accessing historical spending data for subsequent years and contracts. Such an analysis could reveal trends in demand, shifts in procurement strategies, or changes in the competitive landscape for ammunition supply within the agency.
What were the risks identified during the procurement process, and how were they mitigated?
The provided data does not include information on risks identified during the procurement process or the mitigation strategies employed. A thorough risk assessment would typically involve evaluating factors such as contractor capability, supply chain stability, technical feasibility, and potential cost overruns. Understanding these risks and their management is key to assessing the overall success and prudence of the contract award.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $35,923,215
Exercised Options: $35,923,215
Current Obligation: $301,615,215
Timeline
Start Date: 1999-10-15
Current End Date: 2001-07-31
Potential End Date: 2001-07-31 00:00:00
Last Modified: 2014-05-24
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