DoD awards $100M contract for advanced 120mm armor-piercing ammunition to Alliant Techsystems
Contract Overview
Contract Amount: $100,279,126 ($100.3M)
Contractor: Alliant Techsystems Operations LLC
Awarding Agency: Department of Defense
Start Date: 2019-12-19
End Date: 2022-02-06
Contract Duration: 780 days
Daily Burn Rate: $128.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PRODUCTION OF THE M829A4 CARTRIDGE, 120MM, ARMOR PIERCING, FIN STABILIZED, DISCARDING SABOT WITH TRACER (APFSDS-T)
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442
Plain-Language Summary
Department of Defense obligated $100.3 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: PRODUCTION OF THE M829A4 CARTRIDGE, 120MM, ARMOR PIERCING, FIN STABILIZED, DISCARDING SABOT WITH TRACER (APFSDS-T) Key points: 1. The contract focuses on producing the M829A4 cartridge, a critical component for armored vehicle defense. 2. Alliant Techsystems Operations LLC is the sole awardee, indicating a lack of competition for this specific contract. 3. The firm fixed-price contract type aims to control costs, but the absence of competition raises potential value concerns. 4. This procurement falls under the Ammunition (except Small Arms) Manufacturing sector, vital for military readiness.
Value Assessment
Rating: questionable
The contract value of $100,279,126 for 780 days of production is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning only one source, Alliant Techsystems Operations LLC, was considered. This limits price discovery and potentially leads to higher costs than if multiple vendors had bid.
Taxpayer Impact: Taxpayer funds are being expended without the benefit of competitive pricing, which could result in a less efficient use of resources.
Public Impact
Ensures continued supply of advanced anti-tank ammunition for U.S. Army Abrams tanks. Supports a key defense industrial base capability, maintaining production capacity for critical munitions. Potential for increased costs due to sole-source award impacts overall defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for inflated pricing
Positive Signals
- Ensures supply of critical defense asset
- Firm fixed-price contract aims for cost control
Sector Analysis
This procurement is within the Ammunition (except Small Arms) Manufacturing sector. Spending in this area is critical for national defense, but often involves specialized capabilities that can limit competition.
Small Business Impact
The data indicates this contract was not awarded to small businesses (sb: false). The prime contractor, Alliant Techsystems Operations LLC, is a large entity, suggesting no direct subcontracting opportunities for small businesses were specified in this award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the price is reasonable and the contract is managed effectively to meet delivery schedules and quality standards.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for overpricing
- Supply chain vulnerability
- Limited innovation incentive
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $100.3 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. PRODUCTION OF THE M829A4 CARTRIDGE, 120MM, ARMOR PIERCING, FIN STABILIZED, DISCARDING SABOT WITH TRACER (APFSDS-T)
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 $100.3 million.
What is the period of performance?
Start: 2019-12-19. End: 2022-02-06.
What is the justification for the sole-source award of the M829A4 cartridge production contract?
The justification for a sole-source award typically involves factors such as unique technical capabilities, proprietary technology, or a lack of adequate competition within the required timeframe. Further investigation into the specific reasons cited by the Department of the Army is needed to fully understand why this critical ammunition contract was not competed.
What are the potential long-term risks associated with relying on a single supplier for advanced ammunition?
Relying on a single supplier for advanced ammunition creates significant supply chain risk. Disruptions due to the supplier's operational issues, geopolitical events, or changes in their business strategy could halt production. This dependency also reduces leverage for future price negotiations and innovation, potentially leading to higher costs and slower technological advancement.
How does the firm fixed-price contract structure mitigate risks for the government in this sole-source scenario?
A firm fixed-price (FFP) contract shifts most of the cost risk to the contractor. This means Alliant Techsystems Operations LLC is obligated to complete the work for the agreed-upon price, regardless of their actual costs. While this protects the government from cost overruns, it does not guarantee the best possible price if competition was not explored.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W15QKN19R0111
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
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: $100,279,126
Exercised Options: $100,279,126
Current Obligation: $100,279,126
Subaward Activity
Number of Subawards: 30
Total Subaward Amount: $36,682,415
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-12-19
Current End Date: 2022-02-06
Potential End Date: 2022-02-06 12:02:00
Last Modified: 2023-05-24
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