DoD's $261M explosives contract awarded to Alliant Techsystems Operations LLC, with no competition

Contract Overview

Contract Amount: $261,071,279 ($261.1M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2006-06-30

End Date: 2015-01-31

Contract Duration: 3,137 days

Daily Burn Rate: $83.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACTOR REVIEW TDP TO INCORPORATE

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442, UNITED STATES OF AMERICA

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $261.1 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: CONTRACTOR REVIEW TDP TO INCORPORATE Key points: 1. The contract's value, while substantial, lacks a competitive benchmark due to its sole-source nature. 2. Performance context is limited as the contract spans nearly a decade, making direct comparisons difficult. 3. Risk indicators are elevated due to the absence of competitive pressure to drive down costs. 4. Sector positioning places this within the defense industrial base for explosives manufacturing. 5. The firm-fixed-price structure aims to transfer some cost risk to the contractor.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without competitive bids. The $261 million awarded over its duration represents a significant investment in explosives manufacturing. However, the lack of competition means there's no readily available market data to assess if this price represents fair value compared to what could have been achieved through a competitive process. The firm-fixed-price type suggests an attempt to control costs, but the overall value proposition is obscured by the sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Alliant Techsystems Operations LLC, was considered. There is no indication of a competitive solicitation process. This approach bypasses the typical market research and bidding stages, which can limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium for this contract due to the absence of competitive pressure. Without multiple bids, there's less incentive for the contractor to offer the lowest possible price.

Public Impact

The Department of Defense benefits from a dedicated supplier for essential explosives. This contract ensures the continued availability of critical munitions manufacturing capabilities. The geographic impact is primarily centered around the contractor's facilities in Minnesota. Workforce implications include sustained employment in specialized manufacturing roles within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
Sole-source awards can create vendor lock-in, limiting future flexibility.
Long contract duration without competitive re-evaluation may obscure evolving market prices.

Positive Signals

Firm-fixed-price contract type shifts some cost risk to the contractor.
Alliant Techsystems Operations LLC is a known entity in defense manufacturing, suggesting some level of established capability.
The contract supports critical national defense needs for explosives.

Sector Analysis

This contract falls within the defense industrial base, specifically the explosives manufacturing sector. This is a niche but critical area for national security, often characterized by high barriers to entry due to specialized knowledge, safety regulations, and capital investment. The market size for such specialized defense manufacturing can be limited, sometimes leading to fewer potential bidders and a greater reliance on incumbent suppliers. Spending in this area is directly tied to defense procurement strategies and geopolitical demands.

Small Business Impact

This contract was not set aside for small businesses, nor is there information indicating significant subcontracting opportunities for small businesses. The nature of explosives manufacturing often involves large-scale operations and specialized facilities, which may not be conducive to small business participation. The absence of set-asides suggests that the primary focus was on securing the required capabilities from a large, established prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, with fewer public details available compared to competed contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance Manufacturing Contracts
Defense Industrial Base Support
Explosives and Chemical Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Long contract duration without re-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $261.1 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. CONTRACTOR REVIEW TDP TO INCORPORATE

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS 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 $261.1 million.

What is the period of performance?

Start: 2006-06-30. End: 2015-01-31.

What is Alliant Techsystems Operations LLC's track record with the Department of Defense, particularly on similar sole-source contracts?

Alliant Techsystems Operations LLC, now part of Northrop Grumman, has a long history of contracting with the Department of Defense. While specific details on their sole-source contract performance for explosives manufacturing are not publicly detailed in this data, the company is a major defense contractor with extensive experience in aerospace and defense systems. Their track record generally involves large-scale production and integration. However, the absence of competition for this particular contract means that performance metrics and value assessments are less transparent than they would be for a competed award. Without access to internal DoD performance reviews or specific contract modifications, a comprehensive assessment of their track record on this sole-source award remains limited.

How does the $261 million contract value compare to other federal spending on explosives manufacturing?

Comparing the $261 million contract value to other federal spending on explosives manufacturing is challenging without a broader dataset of similar sole-source or competed contracts. However, this figure represents a significant, long-term investment in a specialized defense capability. Federal spending in this area is typically driven by defense readiness requirements and strategic munitions programs. While this contract alone is substantial, it's likely part of a larger federal strategy for maintaining domestic explosives production capacity. The lack of competitive bidding makes it difficult to ascertain if this represents a market rate or a premium.

What are the primary risks associated with a sole-source award of this magnitude for explosives manufacturing?

The primary risks associated with a sole-source award of this magnitude for explosives manufacturing include potential overpricing due to the lack of competitive pressure, reduced incentive for innovation, and vendor lock-in. Without competing bids, the government may not achieve the best possible price or terms. Furthermore, relying on a single supplier can create vulnerabilities in the supply chain if that supplier faces production issues or decides to exit the market. The government also loses the opportunity to foster competition among multiple capable firms, which could lead to more robust market development and technological advancements in the long run. Ensuring quality and timely delivery remains critical, but the absence of competition obscures the value-for-money aspect.

What is the expected program effectiveness and impact of this contract on DoD's capabilities?

The expected program effectiveness of this contract is to ensure a consistent and reliable supply of explosives for the Department of Defense's operational needs. By awarding this contract to Alliant Techsystems Operations LLC, the DoD aims to secure critical manufacturing capabilities essential for national defense. The impact on DoD's capabilities is significant, as it guarantees access to necessary munitions components, thereby supporting readiness and strategic objectives. The long duration and substantial value suggest a commitment to maintaining this capability over an extended period, contributing to the overall robustness of the defense industrial base and the ability to meet future demands for ordnance.

What are the historical spending patterns for explosives manufacturing within the Department of Defense?

Historical spending patterns for explosives manufacturing within the Department of Defense have generally involved significant, long-term investments to maintain domestic production capabilities and ensure supply chain security. Contracts in this sector are often awarded to a limited number of specialized firms due to the high technical requirements, safety regulations, and capital intensity involved. Spending fluctuates based on geopolitical conditions, modernization programs, and operational tempo. While this specific $261 million contract is a large single award, it reflects a broader pattern of sustained federal investment in this critical, albeit niche, defense manufacturing sector. Sole-source awards have historically been utilized when unique capabilities or existing infrastructure necessitate it, though competed contracts are generally preferred for cost efficiency.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W15QKN06R0103

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 4700 NATHAN LN N, PLYMOUTH, MN, 55442

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $261,071,312

Exercised Options: $261,071,312

Current Obligation: $261,071,279

Contract Characteristics

Cost or Pricing Data: NO

Timeline