DoD's $47.8M Small Glide Munition contract awarded to Dynetics, Inc. with no competition

Contract Overview

Contract Amount: $47,758,038 ($47.8M)

Contractor: Dynetics, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-12-07

End Date: 2020-12-31

Contract Duration: 755 days

Daily Burn Rate: $63.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SMALL GLIDE MUNITION (SGM) - AUR

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $47.8 million to DYNETICS, INC. for work described as: SMALL GLIDE MUNITION (SGM) - AUR Key points: 1. The contract value of $47.8M for Small Glide Munitions (SGM) represents a significant investment in specialized ordnance. 2. Awarded to Dynetics, Inc., the contract highlights a single-source procurement, raising questions about competitive pricing. 3. The duration of 755 days suggests a substantial project timeline for the development or delivery of these munitions. 4. The absence of competition may limit opportunities for price discovery and potentially lead to higher costs for taxpayers. 5. This contract falls under the 'Ammunition (except Small Arms) Manufacturing' category, indicating a focus on specific defense capabilities. 6. The firm-fixed-price contract type aims to transfer some risk to the contractor, but the lack of competition complicates value assessment.

Value Assessment

Rating: questionable

Benchmarking the value of this $47.8M contract is challenging due to its sole-source nature and the specialized 'SMALL GLIDE MUNITION (SGM) - AUR' product. Without competitive bids, it's difficult to ascertain if the price reflects fair market value or if alternative solutions could have been procured at a lower cost. The fixed-price nature provides some cost certainty, but the lack of competition prevents a robust comparison against other potential suppliers or similar munitions in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Dynetics, Inc. was the only vendor considered. The data indicates 'NOT COMPETED,' suggesting that either a justification for other-than-full-and-open competition was made, or the contract was awarded under specific exceptions. The lack of multiple bidders means there was no direct price comparison or negotiation driven by market forces, potentially impacting the final price paid.

Taxpayer Impact: Taxpayers may have paid a premium for this munition due to the absence of competitive bidding. Without competing offers, the government lacked the leverage to negotiate the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The U.S. Special Operations Command is the primary beneficiary, receiving advanced glide munitions for its operations. The contract supports the delivery of specialized ammunition, enhancing the capabilities of special operations forces. The geographic impact is primarily within the defense sector, with potential implications for national security readiness. Workforce implications may include specialized manufacturing roles at Dynetics, Inc. and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially inflates costs for taxpayers.
Lack of competition raises concerns about whether the most innovative or cost-effective solution was secured.
Specialized nature of the munition makes direct cost comparisons difficult, increasing risk of overpayment.
Limited public information on the specific capabilities and necessity of 'SGM - AUR' hinders independent value assessment.

Positive Signals

Firm-fixed-price contract type provides cost certainty to the government once awarded.
Award to a known entity (Dynetics, Inc.) may indicate reliance on established capabilities for critical defense needs.
The contract addresses a specific, potentially unique, requirement for U.S. Special Operations Command.

Sector Analysis

The defense sector, particularly the segment focused on munitions and ordnance, is characterized by high R&D costs, stringent quality requirements, and often long procurement cycles. Contracts for specialized munitions like the Small Glide Munition (SGM) are typically awarded to a limited number of defense contractors with the requisite expertise and facilities. The market size for such niche products can be difficult to quantify but is driven by specific military operational needs and technological advancements. This contract fits within the broader category of defense manufacturing, where sole-source awards can occur due to proprietary technology or urgent operational requirements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the data does not provide information on subcontracting plans or actual performance related to small businesses. The award to Dynetics, Inc., a company that may not be classified as a small business, suggests that the primary focus was on capability rather than small business participation. Without specific subcontracting goals or reporting, the impact on the small business ecosystem for this particular contract is unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, including the U.S. Special Operations Command. As a sole-source award, scrutiny might be higher regarding the justification for non-competition and the reasonableness of the price. Transparency is limited by the non-competitive nature, but contract performance would likely be monitored through regular reporting and potentially site visits. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Ammunition Procurement
Special Operations Forces Equipment
Ordnance and Munitions Manufacturing
Advanced Weapons Systems

Risk Flags

Sole-source award raises concerns about price reasonableness and competition.
Lack of transparency in the justification for non-competition.
Potential for higher costs to taxpayers due to absence of competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.8 million to DYNETICS, INC.. SMALL GLIDE MUNITION (SGM) - AUR

Who is the contractor on this award?

The obligated recipient is DYNETICS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $47.8 million.

What is the period of performance?

Start: 2018-12-07. End: 2020-12-31.

What specific capabilities does the 'SMALL GLIDE MUNITION (SGM) - AUR' provide to U.S. Special Operations Command?

The 'SMALL GLIDE MUNITION (SGM) - AUR' likely refers to an advanced, air-launched munition designed for precision strikes by special operations forces. The 'AUR' designation might indicate an 'All-Up Round' configuration, meaning it's ready for immediate use upon delivery. These munitions are typically characterized by their ability to glide towards a target after release, offering extended range and improved accuracy compared to unguided munitions. They are often used against high-value or time-sensitive targets where collateral damage must be minimized. The specific capabilities would include guidance systems (potentially GPS or laser-guided), warhead type, range, and accuracy metrics, tailored to the unique operational requirements of SOCOM.

What was the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which implies a sole-source award. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or when there is a compelling justification for other-than-full-and-open competition (e.g., urgent and compelling need, unique capabilities). Without access to the specific contract file or justification document (e.g., a Justification and Approval - J&A), the precise reason for the sole-source award remains unknown. Dynetics, Inc. may possess proprietary technology, unique manufacturing capabilities, or have been the sole developer of this specific munition, leading the DoD to determine them as the only viable source.

How does the $47.8M contract value compare to similar munitions procurements by the DoD?

Directly comparing the $47.8M contract value for 'SMALL GLIDE MUNITION (SGM) - AUR' to similar munitions is challenging without more specific details on the munition's capabilities, quantity, and unit cost. However, the overall value suggests a significant investment in a specialized, likely high-technology, ordnance. Procurements for advanced guided munitions can range from tens of thousands to hundreds of thousands of dollars per unit, depending on complexity. Given this contract is for a total of $47.8M over approximately two years, it implies either a substantial quantity of these specialized glide munitions or a high unit cost reflecting advanced technology and R&D. Without competitive data, it's difficult to definitively state if this represents a fair market price compared to alternatives.

What are the potential risks associated with a sole-source contract for defense munitions?

Sole-source contracts for defense munitions carry several potential risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, resulting in less value for taxpayer money. Secondly, it may stifle innovation, as contractors face less pressure to develop more cost-effective or technologically superior solutions. Thirdly, there's a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future options and bargaining power. Lastly, without competitive benchmarking, it can be harder to assess the true cost-effectiveness and performance of the acquired munition over its lifecycle.

What is Dynetics, Inc.'s track record with the Department of Defense, particularly in munitions?

Dynetics, Inc. has a notable track record as a defense contractor, often involved in advanced technology development and specialized systems for various branches of the U.S. military, including SOCOM. While specific details on their munitions production history require deeper research into contract databases, Dynetics is known for its work in areas such as missile defense, unmanned systems, and advanced materials. Their involvement in developing and producing complex defense systems suggests they possess the technical expertise required for programs like the Small Glide Munition. Past performance reviews and contract awards would provide a clearer picture of their reliability and quality in delivering defense materiel.

How does this contract align with broader trends in defense spending on precision-guided munitions?

This contract aligns with the broader trend in defense spending towards precision-guided munitions (PGMs). Militaries worldwide, including the U.S. DoD, are increasingly prioritizing munitions that offer enhanced accuracy, reduced collateral damage, and greater effectiveness against a wider range of targets. Glide munitions, like the SGM, are a key component of this trend, extending the reach and tactical flexibility of platforms. The significant investment in such specialized ordnance reflects a strategic shift towards capabilities that enable more precise and discriminate use of force, often required by special operations forces operating in complex environments. This focus on advanced, guided weaponry continues to be a major driver of defense procurement budgets.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,758,038

Exercised Options: $47,758,038

Current Obligation: $47,758,038

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: H9240318D0003

IDV Type: IDC

Timeline