Army awards $44M for M762A1 ET Fuze production, highlighting sustained demand for critical ordnance components

Contract Overview

Contract Amount: $43,976,429 ($44.0M)

Contractor: L3harris Fuzing and Ordnance Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-04-09

End Date: 2015-12-30

Contract Duration: 2,456 days

Daily Burn Rate: $17.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MANUFACTURE AND PRODUCTION OF M762A1 ELECTRONIC TIME (ET) FUZE AND SAFE AND ARM ASSEMBLIES.

Place of Performance

Location: CINCINNATI, CLERMONT County, OHIO, 45245

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $44.0 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC. for work described as: MANUFACTURE AND PRODUCTION OF M762A1 ELECTRONIC TIME (ET) FUZE AND SAFE AND ARM ASSEMBLIES. Key points: 1. Contract value represents a significant investment in essential military hardware. 2. Full and open competition suggests a healthy market for fuze manufacturing. 3. Long contract duration indicates a stable, long-term requirement. 4. Firm Fixed Price contract type offers cost certainty for the government. 5. The award falls within the broader category of small arms ammunition manufacturing. 6. Focus on electronic time fuzes points to modernization of ordnance capabilities.

Value Assessment

Rating: good

The contract value of $43.98 million for the M762A1 ET Fuze and Safe and Arm Assemblies appears reasonable given the specialized nature of ordnance production. Benchmarking against similar complex defense manufacturing contracts suggests that pricing is likely competitive, especially considering the firm fixed-price structure which transfers some risk to the contractor. The long duration of the contract (2009-2015) also implies that the unit costs were likely negotiated to reflect economies of scale over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable suppliers were likely solicited and allowed to bid. The presence of a single award does not necessarily imply limited competition, as it could reflect the contractor's superior technical or price offering. The competitive process is expected to drive price discovery and ensure the government receives the best value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality products. It ensures that the government is not locked into a single supplier, promoting efficiency and innovation.

Public Impact

The primary beneficiaries are the U.S. Army, receiving critical components for its munitions. The contract ensures the continued supply of M762A1 Electronic Time (ET) Fuze and Safe and Arm Assemblies. Production likely occurs within the United States, supporting domestic manufacturing capabilities. The contract supports jobs in the defense manufacturing sector, specifically in ordnance production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions in specialized defense manufacturing.
Reliance on a single contractor for a critical component could pose a risk if not managed carefully.
Ensuring long-term availability and obsolescence management for specialized electronic components.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Full and open competition suggests a robust market and potential for competitive pricing.
Long-term contract award indicates a stable and predictable demand for the product.
Award to an established defense contractor with likely experience in fuze production.

Sector Analysis

The defense manufacturing sector, particularly ordnance and munition production, is highly specialized and capital-intensive. This contract falls under the broader category of Small Arms Ammunition Manufacturing (NAICS 332992). The market for fuzes is dominated by a few key defense contractors capable of meeting stringent military specifications and production volumes. Spending in this area is driven by military readiness requirements and modernization programs.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (SB: false) and there is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses in its supply chain. The focus is on large-scale production by a prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting and program management offices. The firm fixed-price nature of the contract provides a degree of accountability for cost control. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Munitions Procurement
Army Ammunition Production
Ordnance Fuze Manufacturing
Small Arms Ammunition Manufacturing
Defense Industrial Base

Risk Flags

Potential supply chain vulnerabilities for specialized electronic components.
Long-term sustainment and obsolescence management for electronic parts.
Ensuring consistent quality and performance across large production runs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.0 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC.. MANUFACTURE AND PRODUCTION OF M762A1 ELECTRONIC TIME (ET) FUZE AND SAFE AND ARM ASSEMBLIES.

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 $44.0 million.

What is the period of performance?

Start: 2009-04-09. End: 2015-12-30.

What is the historical spending trend for M762A1 ET Fuze and Safe and Arm Assemblies by the Department of the Army?

Analyzing historical spending for the M762A1 ET Fuze and Safe and Arm Assemblies requires access to detailed contract databases beyond the provided summary. However, the award period of 2009-2015 for $43.98 million suggests a consistent annual expenditure of approximately $6.3 million per year during that timeframe. Without further data on previous or subsequent contracts for this specific fuze, it's difficult to establish a long-term trend. Factors influencing historical spending would include operational tempo, inventory levels, and the introduction of newer technologies or alternative munitions. A comprehensive analysis would involve tracking all awards for this NSN (National Stock Number) or equivalent parts over multiple fiscal years to identify patterns of increase, decrease, or stability in demand and associated costs.

How does the unit cost of the M762A1 ET Fuze compare to similar fuzes or previous versions?

The provided data does not include the specific number of units procured under this $43.98 million contract, making a direct unit cost calculation impossible. Therefore, a precise comparison to similar fuzes or previous versions cannot be made without additional information on the quantity awarded. Generally, the cost of fuzes can vary significantly based on complexity (e.g., electronic vs. mechanical timing), features (e.g., proximity sensing, multi-functionality), production volume, and the specific military specifications they must meet. Newer, more technologically advanced fuzes tend to have higher unit costs. To benchmark effectively, one would need to identify comparable fuzes (e.g., other electronic time fuzes for similar caliber munitions) awarded around the same period and obtain their unit prices, adjusting for quantity and contract type.

What are the key performance indicators (KPIs) used to evaluate the success of this contract?

Key performance indicators (KPIs) for a contract like the manufacture of M762A1 ET Fuzes typically revolve around ensuring the timely delivery of high-quality products that meet stringent military specifications. Primary KPIs would likely include: 1. On-Time Delivery: Measuring the percentage of deliveries made by the contract's scheduled dates. 2. Quality Acceptance Rate: Tracking the percentage of delivered units that pass inspection and testing without defects, often measured by ફરિયા (First Article Acceptance Rate) and subsequent production lot acceptance. 3. Technical Performance: Ensuring the fuzes function as designed under various environmental and operational conditions, verified through government testing. 4. Cost Performance: While a Firm Fixed Price contract, monitoring the contractor's ability to manage costs and avoid contract modifications or overruns is important for future pricing. 5. Production Rate: Meeting the required output volume within specified timeframes.

What is the track record of L3Harris Fuzeing and Ordnance Systems, Inc. in fulfilling similar defense contracts?

L3Harris Technologies, including its Fuzeing and Ordnance Systems division, has a significant track record in producing a wide range of defense electronics and ordnance components. They are known suppliers of fuzes, seekers, and other critical systems for various U.S. military platforms. Historically, the company (and its predecessors through mergers and acquisitions) has demonstrated capability in meeting complex technical requirements and production schedules for the Department of Defense. While specific performance metrics for every contract are not publicly available, their continued success in winning competitive defense contracts, including those for fuzes and ordnance, suggests a generally positive performance history regarding quality, delivery, and technical execution. Government contract databases and performance rating systems (like CPARS - Contractor Performance Assessment Reporting System) would provide more granular insights into their specific performance on past awards.

Are there any known risks associated with the supply chain for the components used in the M762A1 ET Fuze?

The supply chain for specialized defense components like the M762A1 ET Fuze can carry inherent risks. These risks often include: 1. Component Obsolescence: Electronic components, especially those with long lead times or produced by fewer manufacturers, can become obsolete, requiring redesign or sourcing challenges. 2. Single-Source Suppliers: Reliance on a limited number of suppliers for critical raw materials or sub-components can create vulnerabilities if those suppliers face production issues or go out of business. 3. Geopolitical Factors: International sourcing of certain materials or components can be subject to trade restrictions, tariffs, or political instability. 4. Manufacturing Capacity: Ensuring sufficient domestic manufacturing capacity for specialized electronic and mechanical parts is crucial, especially during periods of increased demand. The contractor, L3Harris, would typically manage these risks through robust supply chain management practices, including dual-sourcing where feasible, maintaining strategic inventories, and close collaboration with its own suppliers.

What is the strategic importance of the M762A1 ET Fuze to the U.S. Army's operational capabilities?

The M762A1 Electronic Time (ET) Fuze is a critical component for various munitions used by the U.S. Army, likely artillery shells or mortar rounds. Its strategic importance lies in providing precise timing functions for detonation, which is essential for achieving desired effects on target. Electronic time fuzes offer greater flexibility and accuracy compared to older mechanical fuzes, allowing for adjustable detonation points (e.g., impact, delay, or specific airburst altitudes). This capability enhances target effectiveness, reduces collateral damage through controlled detonation, and supports advanced firing techniques like top-attack munitions or area suppression. Ensuring a reliable supply of these fuzes is vital for maintaining the Army's artillery and mortar capabilities, supporting both current combat operations and future force modernization efforts.

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

Solicitation ID: W15QKN08R0350

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3 Technologies, Inc. (UEI: 008898884)

Address: 3975 MCMANN RD, CINCINNATI, OH, 45245

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $43,976,429

Exercised Options: $43,976,429

Current Obligation: $43,976,429

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline