DoD's $772M Small Arms Ammunition Contract Awarded to American Ordnance LLC Under Full and Open Competition
Contract Overview
Contract Amount: $77,270,585 ($77.3M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2004-08-23
End Date: 2012-05-31
Contract Duration: 2,838 days
Daily Burn Rate: $27.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: MIDDLETOWN, DES MOINES County, IOWA, 52638
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $77.3 million to AMERICAN ORDNANCE LLC for work described as: Key points: 1. The contract value of $772.7 million represents a significant investment in small arms ammunition. 2. Awarded under full and open competition, this suggests a competitive bidding process. 3. The duration of the contract (2004-2012) indicates a long-term supply agreement. 4. The contract is for Small Arms Ammunition Manufacturing, a critical defense supply chain component.
Value Assessment
Rating: good
The contract value of $772.7 million for small arms ammunition appears reasonable given the long duration and the nature of the product. Benchmarking against similar large-scale ammunition procurements would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. This method is generally expected to drive competitive pricing and ensure fair market value.
Taxpayer Impact: The competitive nature of the award suggests that taxpayers are likely receiving a fair price for the ammunition procured, minimizing potential overspending.
Public Impact
Ensures a consistent supply of small arms ammunition for military operations. Supports domestic manufacturing capabilities for critical defense materials. Potential impact on the small arms ammunition market and related industries.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to price escalation risks if not managed.
- Dependence on a single supplier for a critical commodity.
Positive Signals
- Awarded through full and open competition, promoting market fairness.
- Firm Fixed Price contract provides cost certainty.
Sector Analysis
The defense sector, particularly ammunition manufacturing, is characterized by high demand, stringent quality requirements, and significant government oversight. Spending benchmarks for such contracts are often substantial due to the scale and criticality of the items.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as 'sb' is false. The focus was on securing a large-scale supply, likely favoring established, larger manufacturers with the capacity to fulfill such a significant order.
Oversight & Accountability
The contract's long duration and substantial value warrant ongoing oversight to ensure performance, quality, and adherence to terms. Regular reviews by the Department of the Army are crucial for accountability.
Related Government Programs
- Small Arms Ammunition Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Long-term contract dependency
- Potential for price escalation over contract life
- Lack of small business participation
- Limited visibility into specific performance metrics
Tags
small-arms-ammunition-manufacturing, department-of-defense, ia, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $77.3 million to AMERICAN ORDNANCE LLC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is AMERICAN ORDNANCE LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $77.3 million.
What is the period of performance?
Start: 2004-08-23. End: 2012-05-31.
What was the average annual spending under this contract?
The total contract value was $772,705,850 over a period from August 23, 2004, to May 31, 2012, which is approximately 7.75 years. Dividing the total value by the duration suggests an average annual spending of roughly $99.7 million. This figure provides a clearer picture of the consistent investment in small arms ammunition.
Were there any performance issues or contract modifications during its term?
The provided data does not detail specific performance issues or modifications. However, for a contract of this magnitude and duration, it is common for modifications to occur due to changing requirements, economic adjustments, or unforeseen circumstances. Further investigation into contract modification history would be necessary to assess performance and potential risks.
How did the pricing compare to market rates at the time of award?
The contract was awarded under full and open competition, which typically drives prices towards market rates. Without specific unit cost data or access to contemporaneous market analyses, a definitive comparison is difficult. However, the competitive process suggests the pricing was likely aligned with prevailing market conditions for small arms ammunition.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 01
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $16,259,429
Exercised Options: $16,259,429
Current Obligation: $77,270,585
Contract Characteristics
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2004-08-23
Current End Date: 2012-05-31
Potential End Date: 2012-05-31 00:00:00
Last Modified: 2012-03-13
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