General Dynamics-OTS awarded $106M for Improved Lethality Warhead (ILW) ammunition, a firm-fixed-price contract
Contract Overview
Contract Amount: $105,927,302 ($105.9M)
Contractor: General Dynamics-Ots, Inc.
Awarding Agency: Department of Defense
Start Date: 2016-06-14
End Date: 2019-11-06
Contract Duration: 1,240 days
Daily Burn Rate: $85.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IMPROVED LETHAIITY WARHEAD (ILW)
Place of Performance
Location: NICEVILLE, OKALOOSA County, FLORIDA, 32578
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $105.9 million to GENERAL DYNAMICS-OTS, INC. for work described as: IMPROVED LETHAIITY WARHEAD (ILW) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is firm fixed price, which shifts cost risk to the contractor. 3. The contract duration of 1240 days indicates a significant, long-term requirement. 4. The North American Industry Classification System (NAICS) code 332993 points to ammunition manufacturing. 5. The contract was awarded by the Department of Defense, a major federal spender. 6. The contract was managed by the Defense Contract Management Agency. 7. The warhead is intended to improve lethality, a key defense objective. 8. The contract was awarded to General Dynamics-OTS, Inc., a known defense contractor.
Value Assessment
Rating: good
While specific value-for-money metrics are not provided, the firm-fixed-price contract type is generally favorable for the government as it caps costs. Benchmarking against similar warhead development or procurement contracts would be necessary for a more precise value assessment. The total award amount of approximately $106 million over a multi-year period suggests a substantial investment in enhancing munition capabilities.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This typically leads to a more robust selection of offers and potentially better pricing due to market forces. The presence of two bids (no) suggests a competitive landscape, though the exact number of bidders can influence price discovery.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation from multiple contractors.
Public Impact
The primary beneficiaries are the U.S. military forces who will receive enhanced warhead capabilities for their munitions. The services delivered include the manufacturing and supply of improved lethality warheads. The geographic impact is national, supporting defense readiness across various military branches. Workforce implications include jobs in manufacturing, engineering, and quality assurance within the defense industrial base, particularly at General Dynamics-OTS facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if initial estimates were inaccurate, despite fixed-price terms.
- Dependence on a single contractor for a critical component could pose supply chain risks.
- The effectiveness of the 'improved lethality' needs rigorous testing and validation to ensure it meets operational requirements.
Positive Signals
- Firm-fixed-price contract structure transfers cost risk to the contractor.
- Full and open competition suggests a competitive environment that can lead to better pricing.
- Award to an established defense contractor like General Dynamics-OTS implies a degree of confidence in their capabilities.
- The contract aims to enhance warfighter capabilities, directly supporting national security objectives.
Sector Analysis
This contract falls within the defense sector, specifically the manufacturing of ammunition and ordnance. The market for such specialized components is dominated by a few large defense contractors. Spending in this area is driven by military modernization efforts and the need to maintain a technological edge. Comparable spending benchmarks would involve analyzing other contracts for similar warhead systems or ammunition upgrades.
Small Business Impact
The data indicates that small business participation was not a primary focus, as the 'small business set-aside' (sb) flag is false. There is no explicit information on subcontracting plans for small businesses. This suggests that the prime contract was awarded to a large business, and any small business involvement would likely be through the prime contractor's own subcontracting initiatives, which are not detailed here.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm-fixed-price contract terms, which obligate the contractor to deliver specified goods at an agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics may be considered sensitive.
Related Government Programs
- Ordnance Procurement
- Ammunition Manufacturing
- Defense Weapons Systems
- Military Munitions
- Warhead Development
Risk Flags
- Potential for supply chain disruption if contractor faces production issues.
- Need for rigorous testing to validate 'improved lethality' claims.
- Long contract duration may require adjustments for evolving threats or technologies.
Tags
defense, ammunition, warhead, general-dynamics-ots, department-of-defense, firm-fixed-price, full-and-open-competition, ordnance, manufacturing, national-security, florida, definitive-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $105.9 million to GENERAL DYNAMICS-OTS, INC.. IMPROVED LETHAIITY WARHEAD (ILW)
Who is the contractor on this award?
The obligated recipient is GENERAL DYNAMICS-OTS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $105.9 million.
What is the period of performance?
Start: 2016-06-14. End: 2019-11-06.
What is the historical spending pattern for Improved Lethality Warheads (ILW) by the Department of Defense?
Analyzing historical spending on ILW requires access to detailed contract databases beyond this single award. However, the Department of Defense consistently invests significant sums in munition upgrades to maintain battlefield superiority. Spending on warhead technology is often cyclical, driven by technological advancements, evolving threat assessments, and specific program requirements. This $106 million contract represents a substantial, multi-year investment, suggesting a significant program initiative rather than routine replenishment. To understand the full pattern, one would need to examine prior contracts for similar warheads, research and development efforts in this area, and future planned procurements to identify trends in investment and technological focus.
How does the unit cost of these warheads compare to similar systems procured by other military branches or allied nations?
Determining the precise unit cost requires dividing the total contract value by the number of units procured, which is not provided in the data. Assuming the $106 million covers the entire contract duration and quantity, a rough estimate could be made if the quantity were known. Benchmarking against similar systems is crucial. For instance, comparing the cost per warhead to systems used by the Army, Navy, or Air Force, or even to those procured by allied nations through NATO or bilateral agreements, would reveal cost-effectiveness. Factors like technological sophistication, production volume, and specific performance requirements heavily influence unit costs. Without the quantity or more detailed cost breakdowns, a direct comparison is speculative, but the firm-fixed-price nature suggests the government sought cost certainty.
What are the key performance indicators (KPIs) used to measure the success of the Improved Lethality Warhead (ILW) program?
Key performance indicators for an ILW program would likely focus on lethality enhancement, reliability, safety, and cost-effectiveness. Specific metrics could include increased penetration capability against hardened targets, improved blast effects, reduced duds or misfires, adherence to safety standards during handling and deployment, and performance within specified environmental conditions. The 'improved lethality' itself would be quantified through rigorous testing against representative targets. Reliability would be measured by the percentage of successful detonations when intended. While not explicitly stated in the award data, the government would have established acceptance criteria and testing protocols that the contractor must meet for successful contract completion.
What is General Dynamics-OTS, Inc.'s track record with similar ammunition or warhead contracts?
General Dynamics-OTS, Inc. (now part of General Dynamics Ordnance and Tactical Systems) has a long-standing and extensive track record in manufacturing munitions and ordnance for the U.S. military and allied nations. They are a major producer of various types of ammunition, including artillery shells, mortar rounds, and tank rounds. Their experience likely encompasses the design, development, and production of warheads, fuses, and related components. The award of this $106 million contract for ILW suggests the government has confidence in their capabilities based on past performance. A deeper dive would involve reviewing their contract history for similar programs, including any past performance evaluations or awards related to advanced warhead technology.
What are the potential risks associated with the full and open competition for this type of specialized defense contract?
While full and open competition is generally beneficial, risks can still exist for specialized defense contracts like this. One risk is that only a limited number of highly specialized companies possess the necessary technology and manufacturing capabilities, potentially leading to less robust competition than anticipated. Another risk is the complexity of evaluating highly technical proposals, which can be time-consuming and resource-intensive for the government. Furthermore, if the technical requirements are not clearly defined, bidders might propose solutions that do not fully meet the government's needs, or the government might struggle to accurately assess the best value. Ensuring that all potential bidders have adequate information and opportunity to compete is crucial.
How does the firm-fixed-price (FFP) contract type impact the government's exposure to cost overruns compared to other contract types?
The firm-fixed-price (FFP) contract type is designed to provide the government with the most cost certainty. Under an FFP agreement, the contractor assumes the primary responsibility for all costs incurred and is obligated to deliver the specified goods or services at the negotiated price, regardless of the actual costs. This significantly limits the government's exposure to cost overruns, unlike cost-reimbursement contracts where the government bears the risk of higher-than-expected costs. However, FFP contracts often include higher initial prices to compensate the contractor for taking on this risk. The government's main exposure under FFP relates to potential scope creep or contractor non-performance, which could necessitate contract modifications or termination actions.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA868116R0007
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Wico Limited
Address: 115 HART ST, NICEVILLE, FL, 32578
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: $176,536,794
Exercised Options: $105,927,302
Current Obligation: $105,927,302
Actual Outlays: $8,960,325
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-06-14
Current End Date: 2019-11-06
Potential End Date: 2019-11-06 00:00:00
Last Modified: 2025-03-28
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