DoD's $25.5M contract for FMU 153-B production awarded to L3Harris Fuzing and Ordnance Systems, Inc

Contract Overview

Contract Amount: $25,534,076 ($25.5M)

Contractor: L3harris Fuzing and Ordnance Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-04-25

End Date: 2014-04-21

Contract Duration: 2,553 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMU 153-B PRODUCTION

Place of Performance

Location: CINCINNATI, CLERMONT County, OHIO, 45245

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC. for work described as: FMU 153-B PRODUCTION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of approximately 7 years indicates a significant, long-term requirement. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. Awarded by the Department of the Army, this contract supports ammunition manufacturing. 5. The North American Industry Classification System (NAICS) code 332993 points to ammunition manufacturing. 6. The contract was awarded in Ohio, indicating a specific geographic concentration of work.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns or comparisons to similar, recent procurements for the FMU 153-B or comparable fuzing systems. The firm-fixed-price structure is generally favorable for the government in managing cost overruns, but the total value of $25.5 million over nearly seven years suggests a substantial investment. Further analysis would require understanding the unit costs and the quantity of fuzes procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific requirement. While two bidders is better than one, a higher number of bids would typically lead to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: A competitive award process, even with two bidders, is generally beneficial for taxpayers as it encourages contractors to offer their best pricing to secure the contract.

Public Impact

This contract directly benefits the Department of Defense by ensuring the supply of critical ammunition components. The services delivered include the production of FMU 153-B fuzes, essential for ordnance effectiveness. The contract's performance is likely concentrated in Ohio, where L3Harris Fuzing and Ordnance Systems, Inc. operates. This contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed cost breakdowns makes it difficult to assess true value for money.
Limited number of bidders (two) may have restricted the full benefits of competition.
The long contract duration could lead to potential price increases if market conditions change significantly.

Positive Signals

Firm-fixed-price contract type effectively transfers cost overrun risk to the contractor.
Awarded through full and open competition, adhering to principles of fair opportunity.
The contractor, L3Harris Fuzing and Ordnance Systems, Inc., is an established defense manufacturer.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition components. The market for defense-related ordnance and fuzing systems is specialized, often characterized by a limited number of highly capable suppliers due to stringent quality and security requirements. Spending in this area is driven by military readiness needs and modernization programs. Comparable spending benchmarks would typically be found within other DoD contracts for similar fuzing systems or ammunition production.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor may engage small businesses as subcontractors for components or services, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Ordnance Manufacturing Contracts
L3Harris Fuzing and Ordnance Systems Contracts
Army Aviation and Missile Command Contracts

Risk Flags

Long contract duration may increase exposure to market volatility.
Limited number of bidders could indicate potential barriers to entry or reduced competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC.. FMU 153-B PRODUCTION

Who is the contractor on this award?

The obligated recipient is L3HARRIS FUZING AND ORDNANCE SYSTEMS, 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 $25.5 million.

What is the period of performance?

Start: 2007-04-25. End: 2014-04-21.

What is the historical spending pattern for FMU 153-B production or similar fuzing systems by the Department of the Army?

Analyzing historical spending for FMU 153-B production or comparable fuzing systems is crucial for understanding the value proposition of the current $25.5 million contract. Without access to specific historical procurement data for this exact fuzing system, a direct comparison is difficult. However, general trends in defense spending on ammunition and related components can be observed. The Army consistently allocates significant portions of its budget to munitions to maintain readiness and support ongoing operations. Factors influencing historical spending include technological advancements, geopolitical events, and strategic inventory levels. A detailed analysis would involve examining past contract awards for similar items, noting quantities, unit prices, and inflation adjustments over time to contextualize the current award's financial scale and potential value.

How does the unit cost of the FMU 153-B under this contract compare to industry benchmarks or previous contracts?

Determining the precise unit cost for the FMU 153-B under this $25.5 million contract is not possible with the provided data, as the total award amount and contract duration (2553 days) do not specify the quantity of units procured. To compare unit costs against industry benchmarks or previous contracts, one would need the total quantity of fuzes to be delivered. If, for example, 100,000 fuzes were to be delivered, the unit cost would be approximately $255.34. This figure could then be benchmarked against publicly available data for similar fuzing systems, considering factors like technological complexity, production volume, and the specific time frame of comparison. Without the quantity, any unit cost calculation is speculative, hindering a meaningful value assessment.

What is L3Harris Fuzing and Ordnance Systems, Inc.'s track record with similar DoD contracts?

L3Harris Fuzing and Ordnance Systems, Inc. has a significant track record in producing fuzing systems and ordnance for the Department of Defense. As a major defense contractor, the company has been involved in numerous contracts for various types of munitions and their components. Their experience likely includes meeting stringent military specifications, managing complex production processes, and adhering to strict delivery schedules. Past performance data, often available through government contract databases, would detail their success rates, any past performance issues, and their ability to deliver quality products on time and within budget for similar defense procurements. This specific contract for FMU 153-B production builds upon their established capabilities in this specialized area of defense manufacturing.

What are the potential risks associated with the long duration of this contract?

The long duration of this contract, spanning approximately seven years (2553 days), presents several potential risks. Firstly, there's the risk of price escalation; while it's a firm-fixed-price contract, unforeseen market fluctuations in raw materials or labor costs could impact the contractor's profitability, potentially leading to future requests for contract modifications or affecting their willingness to bid competitively on subsequent contracts. Secondly, technological obsolescence is a risk; defense technology evolves rapidly, and by the end of the contract term, the FMU 153-B might be superseded by newer, more advanced systems, potentially reducing its long-term strategic value. Lastly, contractor performance stability over such an extended period can be a concern; changes in company ownership, management, or workforce could impact production consistency and quality. Robust oversight and clear performance metrics are essential to mitigate these risks.

How does the 'full and open competition' award mechanism impact the overall cost-effectiveness for taxpayers?

The 'full and open competition' award mechanism is designed to maximize cost-effectiveness for taxpayers by ensuring that the government receives offers from all responsible sources, thereby fostering a competitive environment. This process encourages bidders to submit their most competitive pricing and innovative solutions to win the contract. When multiple companies vie for a contract, the resulting price discovery typically drives down costs compared to sole-source or limited competition scenarios. While the data indicates only two bids were received for this specific contract, the principle of full and open competition still applies, suggesting that the awarded price is likely a result of at least some level of competitive pressure, which is generally more favorable for taxpayer value than a non-competitive award.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 3975 MCMANN RD, CINCINNATI, OH, 90

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

Financial Breakdown

Contract Ceiling: $25,691,551

Exercised Options: $25,534,076

Current Obligation: $25,534,076

Contract Characteristics

Cost or Pricing Data: NO

Timeline