DoD's $84M Small Arms Ammunition Contract Awarded to General Dynamics-OTS Lacked Competition
Contract Overview
Contract Amount: $84,017,268 ($84.0M)
Contractor: General Dynamics-Ots, Inc.
Awarding Agency: Department of Defense
Start Date: 2004-04-30
End Date: 2011-07-13
Contract Duration: 2,630 days
Daily Burn Rate: $31.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: BURLINGTON, CHITTENDEN County, VERMONT, 05401
State: Vermont Government Spending
Plain-Language Summary
Department of Defense obligated $84.0 million to GENERAL DYNAMICS-OTS, INC. for work described as: Key points: 1. The contract, valued at $84 million, was awarded to General Dynamics-OTS, Inc. 2. Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars. 3. The sector is Small Arms Ammunition Manufacturing, a critical component for military operations. 4. The contract duration was 2630 days, indicating a long-term commitment without competitive bidding.
Value Assessment
Rating: questionable
The contract was awarded on a Cost Plus Award Fee basis, which can incentivize cost overruns. Without competitive benchmarking, it's difficult to assess if the $84 million price reflects fair market value for small arms ammunition.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was 'NOT COMPETED,' indicating a sole-source award. This significantly limits price discovery and negotiation leverage, potentially leading to higher costs for the government.
Taxpayer Impact: The absence of competition likely resulted in taxpayers paying more than necessary for small arms ammunition over the contract's 7-year duration.
Public Impact
Taxpayers may have overpaid for essential ammunition due to the lack of competitive bidding. The long contract duration (2630 days) without competition means sustained potential for inflated costs. Dependence on a single supplier for critical ammunition could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost-Plus Contract Type
- Long Contract Duration
- No Small Business Participation
Positive Signals
- Awarded to established contractor
- Contracted for essential defense supplies
Sector Analysis
The Small Arms Ammunition Manufacturing sector is vital for defense readiness. Spending benchmarks are difficult to establish without competitive data, but non-competitive awards typically exceed market rates.
Small Business Impact
The data indicates no small business participation in this contract (sb: false). This represents a missed opportunity to support small businesses and potentially leverage their agility and innovation.
Oversight & Accountability
The 'NOT COMPETED' status suggests a potential lapse in oversight regarding competitive sourcing strategies. Further review is needed to understand why this contract was not opened to competition.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Cost-plus contract type
- No small business participation
- Long contract duration without competition
- Lack of transparency on justification for non-competition
Tags
small-arms-ammunition-manufacturing, department-of-defense, vt, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $84.0 million to GENERAL DYNAMICS-OTS, INC.. See the official description on USAspending.
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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $84.0 million.
What is the period of performance?
Start: 2004-04-30. End: 2011-07-13.
What was the justification for not competing this significant contract for small arms ammunition?
The justification for not competing this $84 million contract is not provided in the data. Typically, sole-source awards require specific justifications, such as urgency, unique capabilities, or lack of available sources. Without this information, it's impossible to assess the validity of the non-competitive decision and its impact on value.
What is the estimated cost savings if this contract had been competed?
Estimating cost savings without competitive bids is speculative. However, studies consistently show that competitive contracting can yield savings of 10-30% or more compared to sole-source awards. For this $84 million contract, potential savings could range from $8.4 million to over $25 million over its 7-year duration.
What are the risks associated with awarding a long-term contract for critical supplies without competition?
The primary risks include inflated prices due to the absence of market pressure, reduced innovation from the supplier, and potential supply chain vulnerabilities if the sole provider faces issues. Furthermore, it sets a precedent that may discourage future competition for similar critical needs.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 128 LAKESIDE AVENUE, BURLINGTON, VT, 00
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $6,984,608
Exercised Options: $6,984,608
Current Obligation: $84,017,268
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2004-04-30
Current End Date: 2011-07-13
Potential End Date: 2011-07-13 00:00:00
Last Modified: 2011-10-24
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