Air Force awards $52.6M contract for ammunition kits to Dynetics, Inc

Contract Overview

Contract Amount: $52,658,219 ($52.7M)

Contractor: Dynetics, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-03

End Date: 2027-07-02

Contract Duration: 1,094 days

Daily Burn Rate: $48.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER UNDER THE EGLIN WIDE AGILE ACQUISITION CONTRACT (EWAAC) INDEFINITE DELIVERY/INDEFINITE QUANTITY (IDIQ) TO PERFORM THE TASKS NECESSARY TO PRODUCE ALL REQUIRED AURS, TM KITS, AND WDL KITS.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $52.7 million to DYNETICS, INC. for work described as: DELIVERY ORDER UNDER THE EGLIN WIDE AGILE ACQUISITION CONTRACT (EWAAC) INDEFINITE DELIVERY/INDEFINITE QUANTITY (IDIQ) TO PERFORM THE TASKS NECESSARY TO PRODUCE ALL REQUIRED AURS, TM KITS, AND WDL KITS. Key points: 1. Contract awarded under a broad agile acquisition vehicle, suggesting a need for flexibility and rapid development. 2. The contract is for ammunition, training material, and weapon data link kits, indicating support for advanced weaponry. 3. A firm-fixed-price structure aims to control costs, but the large value warrants close monitoring of performance. 4. The duration of nearly three years suggests a sustained need for these specialized kits. 5. The contract was awarded using full and open competition, which typically fosters competitive pricing. 6. The specific nature of the kits points to a niche but critical capability within the Air Force's arsenal.

Value Assessment

Rating: good

The contract value of $52.6 million for nearly three years of work appears reasonable given the specialized nature of ammunition and related kits. Benchmarking against similar complex defense manufacturing contracts suggests this price point is within expected ranges. The firm-fixed-price contract type provides cost certainty for the government, assuming Dynetics can manage its production costs effectively. Further analysis would require detailed cost breakdowns and comparisons to the estimated value of the underlying EWAAC IDIQ.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under the Eglin Wide Agile Acquisition Contract (EWAAC) IDIQ, which itself was established through full and open competition. While the specific number of bidders for this particular delivery order is not provided, the EWAAC vehicle is designed to foster broad competition. The use of a competitive IDIQ vehicle generally leads to better price discovery and value for the government compared to sole-source awards.

Taxpayer Impact: The full and open competition under the EWAAC framework is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives competitive offers for its requirements.

Public Impact

The primary beneficiaries are the U.S. Air Force units requiring advanced ammunition, training materials, and data link kits for operational readiness. The contract delivers essential components for maintaining and enhancing the effectiveness of specific weapon systems. The geographic impact is primarily within Alabama, where Dynetics, Inc. is located, suggesting potential local economic benefits and job creation. Workforce implications include skilled labor in manufacturing, engineering, and quality assurance within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if production complexities are underestimated by the contractor.
Risk of schedule delays if supply chain issues arise for specialized components.
Ensuring the delivered kits meet stringent performance and interoperability standards is critical.

Positive Signals

Awarded under a flexible agile acquisition contract, allowing for adaptation to evolving requirements.
Firm-fixed-price contract provides cost predictability for the government.
The contractor, Dynetics, Inc., has a history of performing complex defense-related work.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition and related support systems. The market for such specialized defense components is characterized by high barriers to entry due to technical expertise, security clearances, and rigorous quality standards. The EWAAC IDIQ itself represents a strategic approach by the Air Force to streamline acquisition for a wide range of agile and evolving technologies, aiming to reduce lead times and foster innovation. Comparable spending benchmarks would involve looking at other large-scale contracts for munitions, electronic warfare systems, or advanced training equipment.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Dynetics, Inc. is a large business. While there is no direct small business set-aside, the contract's performance may involve subcontracting opportunities. The extent to which Dynetics engages small businesses as subcontractors will determine the indirect impact on the small business ecosystem. Further investigation into Dynetics' subcontracting plan would be necessary to assess this impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. The firm-fixed-price nature of the award places the onus on the contractor to manage costs, but the government will monitor performance against technical specifications and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Eglin Wide Agile Acquisition Contract (EWAAC) IDIQ
Ammunition Manufacturing Contracts
Defense Logistics Support Contracts
Air Force Weapon System Support

Risk Flags

Potential for schedule slippage
Quality control concerns for critical components
Supply chain vulnerability for specialized materials

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.7 million to DYNETICS, INC.. DELIVERY ORDER UNDER THE EGLIN WIDE AGILE ACQUISITION CONTRACT (EWAAC) INDEFINITE DELIVERY/INDEFINITE QUANTITY (IDIQ) TO PERFORM THE TASKS NECESSARY TO PRODUCE ALL REQUIRED AURS, TM KITS, AND WDL KITS.

Who is the contractor on this award?

The obligated recipient is DYNETICS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $52.7 million.

What is the period of performance?

Start: 2024-07-03. End: 2027-07-02.

What is Dynetics, Inc.'s track record with the Department of Defense, particularly in manufacturing ammunition-related components?

Dynetics, Inc. has a significant history of performing complex defense-related contracts for various branches of the U.S. military, including the Department of Defense. While specific details on ammunition kit manufacturing require deeper analysis of their contract portfolio, Dynetics is known for its expertise in areas such as advanced materials, systems engineering, and prototyping for defense applications. Their involvement in programs related to missile defense, hypersonics, and other advanced technologies suggests a capability to handle sophisticated manufacturing requirements. The company's performance history on previous contracts, including adherence to schedules, quality standards, and budget, would be a key indicator of their reliability for this current award. Reviewing past performance evaluations and any reported issues would provide a more comprehensive picture of their suitability for producing these critical ammunition kits.

How does the $52.6 million value compare to similar ammunition kit contracts awarded by the Air Force or other DoD branches?

The $52.6 million contract value for ammunition, training material, and weapon data link kits, spanning nearly three years, appears to be within a reasonable range for specialized defense manufacturing. However, a precise comparison requires access to detailed specifications of the kits being procured and benchmarking against contracts for functionally equivalent items. Contracts for complex munitions, guidance systems, or advanced electronic warfare components can range from tens to hundreds of millions of dollars. Given that this is a delivery order under a broader IDIQ (EWAAC), the value might reflect a specific tranche of work rather than the total potential of the IDIQ. Without specific details on the quantity, complexity, and technological sophistication of the kits, it's challenging to provide a definitive benchmark. However, the firm-fixed-price nature suggests the government has sought to establish a clear cost ceiling for this defined scope of work.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks associated with this contract include potential production delays due to supply chain disruptions for specialized components, the contractor's ability to meet stringent quality and performance specifications for critical defense items, and the possibility of cost overruns if manufacturing complexities are underestimated, despite the firm-fixed-price structure. Mitigation strategies likely involve robust government oversight of the contractor's production processes, regular performance reviews, and clear contractual requirements for quality assurance and timely delivery. The use of an agile acquisition vehicle (EWAAC) may also allow for flexibility in adapting to unforeseen challenges. Furthermore, Dynetics' established presence in the defense sector and their likely experience with similar manufacturing processes suggest a degree of inherent risk mitigation through contractor expertise.

How effective is the EWAAC IDIQ in ensuring competitive pricing and timely delivery for specialized defense needs like ammunition kits?

The Eglin Wide Agile Acquisition Contract (EWAAC) IDIQ is designed to enhance competition and streamline the acquisition of a broad range of technologies, including those requiring agile development and rapid fielding. By establishing a pre-competed vehicle with multiple awardees, the Air Force aims to reduce the time and administrative burden associated with awarding individual contracts. For specific delivery orders like this one for ammunition kits, the EWAAC framework allows the government to solicit proposals from qualified contractors on the IDIQ, fostering competition among those awardees. This competitive process, combined with the potential for rapid task order issuance, is intended to promote both competitive pricing and timely delivery. The effectiveness is contingent on the specific competition generated for each task order and the clarity of the requirements.

What is the historical spending pattern for ammunition and related kit manufacturing within the Department of the Air Force?

Historical spending patterns for ammunition and related kit manufacturing within the Department of the Air Force are substantial and fluctuate based on geopolitical events, modernization programs, and operational tempo. The Air Force, along with other DoD branches, consistently allocates significant portions of its budget to munitions, ranging from small arms ammunition to advanced missile systems and their associated components. Spending on specialized kits, such as training materials and data link systems, is often tied to the lifecycle of specific aircraft or weapon platforms. Analyzing historical data reveals a trend towards acquiring more technologically advanced and precision-guided munitions, which often come with higher per-unit costs and require sophisticated manufacturing processes. The use of IDIQ vehicles like EWAAC reflects a strategic effort to manage this spending more efficiently and adapt to evolving technological requirements.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1002 EXPLORER BLVD, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $52,658,219

Exercised Options: $52,658,219

Current Obligation: $52,658,219

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $31,928,555

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865621DA015

IDV Type: IDC

Timeline