DoD's $5.6M ammunition purchase for SIG SAUER, Inc. raises value and competition questions

Contract Overview

Contract Amount: $5,582,854 ($5.6M)

Contractor: SIG Sauer, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-04-28

End Date: 2025-12-18

Contract Duration: 234 days

Daily Burn Rate: $23.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE OF AMMUNITION - AC58 CTG, 6.5 CM,140GR (M1200)

Place of Performance

Location: JACKSONVILLE, PULASKI County, ARKANSAS, 72076

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $5.6 million to SIG SAUER, INC. for work described as: PURCHASE OF AMMUNITION - AC58 CTG, 6.5 CM,140GR (M1200) Key points: 1. The contract's value proposition requires scrutiny given the unit cost and limited performance period. 2. Full and open competition was utilized, but the number of bidders is not specified, impacting price discovery. 3. Potential risks include the short duration and the need for ongoing ammunition procurement. 4. This contract falls within the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' sector. 5. The purchase is for specialized ammunition, indicating a specific operational need. 6. Oversight will be crucial to ensure effective use of funds and contractor performance.

Value Assessment

Rating: fair

The total contract value is $5,582,854.40. Benchmarking the per-unit cost against similar contracts for specialized ammunition is difficult without more detailed specifications. However, the unit price appears to be within a reasonable range for high-grade, specialized rounds. The relatively short performance period (less than a year) suggests this is for immediate or near-term needs rather than a long-term strategic stock.

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, the specific number of bids received is not detailed in the provided data. A higher number of responsive bids would typically lead to more competitive pricing. The fact that it was competed broadly suggests that multiple vendors could have met the requirements.

Taxpayer Impact: Full and open competition is intended to ensure that taxpayers receive the best possible value by encouraging a wide range of suppliers to bid, potentially driving down prices.

Public Impact

Special Operations Forces personnel will benefit from the supply of critical ammunition. The services delivered include the provision of AC58 CTG, 6.5 CM, 140GR (M1200) ammunition. The geographic impact is primarily within the operational theaters where Special Operations Forces are deployed. Workforce implications are minimal, as this is a procurement of goods rather than services requiring significant labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited performance period may necessitate future procurements, increasing administrative burden and potential price fluctuations.
Lack of detailed bid count prevents a full assessment of competitive intensity.
Specialized nature of ammunition could limit the pool of qualified suppliers in future competitions.

Positive Signals

Awarded under full and open competition, maximizing potential supplier engagement.
Contract is for a specific, defined product, reducing ambiguity in requirements.
Fixed-price contract type provides cost certainty for the government.

Sector Analysis

This contract falls within the broader defense manufacturing sector, specifically focusing on ordnance and small arms ammunition. The market for specialized military ammunition is characterized by stringent quality requirements, long lead times, and a relatively small number of highly qualified manufacturers. Spending in this category is driven by operational readiness, modernization efforts, and geopolitical demands. Comparable spending benchmarks would typically involve analyzing historical procurement data for similar calibers and specifications from various branches of the U.S. military.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the procurement was not specifically targeted towards small businesses. While large defense contractors often have small business subcontracting plans, there is no explicit information here to confirm or deny such requirements for this particular order. The impact on the small business ecosystem is likely minimal unless SIG SAUER, Inc. utilizes small businesses in its supply chain for this contract.

Oversight & Accountability

The Department of Defense utilizes various oversight mechanisms for contract awards, including contract close-out procedures, performance reviews, and audits by the Defense Contract Audit Agency (DCAA) and the Inspector General. Transparency is generally maintained through contract databases like FPDS. The specific oversight for this delivery order would fall under the purview of the U.S. Special Operations Command's contracting and financial management offices.

Related Government Programs

Department of Defense Ammunition Procurement
Special Operations Forces Equipment Acquisition
Small Arms and Ammunition Manufacturing Contracts
Defense Logistics Agency (DLA) Ammunition Stockpiles

Risk Flags

Potential for price escalation in future procurements due to short contract duration.
Limited visibility into the number of bidders impacts full assessment of competitive pricing.
Specialized nature of ammunition may limit future competition if requirements remain highly specific.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.6 million to SIG SAUER, INC.. PURCHASE OF AMMUNITION - AC58 CTG, 6.5 CM,140GR (M1200)

Who is the contractor on this award?

The obligated recipient is SIG SAUER, 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 $5.6 million.

What is the period of performance?

Start: 2025-04-28. End: 2025-12-18.

What is the historical spending pattern for this specific type of ammunition (AC58 CTG, 6.5 CM, 140GR M1200) by the U.S. Special Operations Command or the Department of Defense?

Historical spending data for this precise ammunition type is not readily available in public databases without specific contract numbers or more granular product identifiers. However, the Department of Defense procures vast quantities of ammunition annually across various calibers and specifications. U.S. Special Operations Command (SOCOM) often procures specialized munitions tailored to unique operational requirements, which can command higher unit prices due to lower production volumes and advanced specifications. Analyzing broader trends in small arms ammunition procurement by SOCOM over the past 5-10 years would reveal significant investment in maintaining readiness and equipping special operations forces, with spending fluctuating based on operational tempo and strategic priorities. Without specific historical contract data for this exact item, a direct comparison is challenging, but the overall trend indicates consistent, substantial investment in ammunition.

How does the unit price of this ammunition compare to commercially available or other government contracts for similar 6.5 Creedmoor rounds?

The unit price for the AC58 CTG, 6.5 CM, 140GR (M1200) ammunition, based on the total award of $5,582,854.40 for an unspecified quantity (though implied by the 'na' field of '332994' which might represent a quantity or lot number), needs to be calculated to enable comparison. If '332994' represents the quantity, the unit price would be approximately $16.80 per round ($5,582,854.40 / 332,994). This price point is significantly higher than standard commercial 6.5 Creedmoor ammunition, which can range from $1 to $3 per round depending on grain weight, manufacturer, and intended use (e.g., hunting, target shooting). Military-grade or specialized ammunition, especially with specific certifications or performance requirements like the M1200 designation, typically incurs higher costs due to stringent quality control, material specifications, and potentially lower production runs compared to mass-market commercial offerings. Comparisons to other government contracts would require identifying procurements of similar military-specification 6.5 Creedmoor ammunition.

What are the specific performance requirements or characteristics that justify the cost of this specialized ammunition?

The designation 'AC58 CTG, 6.5 CM, 140GR (M1200)' suggests specialized military specifications beyond standard commercial ammunition. The 'AC58' likely refers to a specific military nomenclature or contract identifier. The 'M1200' designation could indicate a particular performance standard, such as enhanced accuracy, terminal ballistics, or specific material composition for use in particular weapon systems or environments. The 140-grain weight is a heavier projectile for the 6.5 Creedmoor caliber, often chosen for increased range, energy retention, and penetration. Military ammunition often undergoes rigorous testing for reliability, consistency, and performance under extreme conditions (temperature, humidity, altitude), which contributes to higher costs. Without access to the detailed technical data package or military specification documents associated with the M1200 designation, the precise performance enhancements remain proprietary, but they are expected to exceed those of typical sporting ammunition.

What is the track record of SIG SAUER, INC. as a government contractor, particularly for ammunition procurements?

SIG SAUER, INC. has a well-established track record as a significant defense contractor, primarily known for firearms and ammunition. They have secured numerous contracts with various branches of the U.S. military and federal law enforcement agencies for pistols, rifles, ammunition, and related accessories. Their history includes supplying standard service ammunition as well as specialized rounds. Publicly available contract databases show consistent awards to SIG SAUER for ammunition over many years, indicating a capacity to meet government requirements and a level of trust from contracting officers. Their performance on these contracts, while generally positive, would be subject to standard government oversight and performance evaluations, which are not detailed in this summary data. Their extensive experience suggests they are a capable supplier for this type of specialized ammunition.

What are the potential risks associated with a sole-source or limited competition award for critical defense supplies like ammunition?

This contract was awarded under 'full and open competition,' not sole-source or limited competition. Therefore, the risks typically associated with those award types (e.g., higher prices due to lack of competition, potential for contractor complacency, limited innovation) are mitigated. However, even within full and open competition, if only a few bidders respond or if the specifications are highly tailored, the effective competition might be limited. Risks in defense supply chains, even with broad competition, can include supply chain disruptions, geopolitical influences on raw material costs, and the need for continuous modernization to meet evolving threats. For ammunition, risks also include shelf-life considerations and the need for secure, reliable logistics.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: H9240323R0002

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 357 SIG SAUER DR, JACKSONVILLE, AR, 72076

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: $5,582,854

Exercised Options: $5,582,854

Current Obligation: $5,582,854

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9240323D0015

IDV Type: IDC

Timeline