Army awards $39.5M contract for ammunition to Sig Sauer Inc. under full and open competition
Contract Overview
Contract Amount: $39,526,994 ($39.5M)
Contractor: SIG Sauer Inc.
Awarding Agency: Department of Defense
Start Date: 2022-07-28
End Date: 2025-03-31
Contract Duration: 977 days
Daily Burn Rate: $40.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCUREMENT OF AMMUNITION.
Place of Performance
Location: NEWINGTON, ROCKINGHAM County, NEW HAMPSHIRE, 03801
Plain-Language Summary
Department of Defense obligated $39.5 million to SIG SAUER INC. for work described as: PROCUREMENT OF AMMUNITION. Key points: 1. The contract value is $39.5 million, awarded to a single vendor. 2. Sig Sauer Inc. is the sole awardee, indicating potential market concentration. 3. The procurement is for ammunition, a critical defense supply. 4. The contract duration is 977 days, spanning over two years.
Value Assessment
Rating: good
The contract value of $39.5 million for ammunition appears reasonable given the 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, suggesting a robust price discovery process. This method allows multiple vendors to bid, driving competitive pricing.
Taxpayer Impact: Full and open competition generally leads to better value for taxpayers by ensuring the government receives the most advantageous pricing.
Public Impact
Ensures supply of essential ammunition for military operations. Supports a key defense contractor, potentially impacting industry stability. Potential for price fluctuations based on raw material costs and geopolitical factors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole awardee may limit future competition.
- Price stability for ammunition can be volatile.
- Dependence on a single supplier for critical items.
Positive Signals
- Awarded under full and open competition.
- Contract duration provides supply chain stability.
- Clear contract type (Firm Fixed Price) for cost certainty.
Sector Analysis
This procurement falls within the defense sector, specifically ordnance manufacturing. Spending benchmarks for ammunition can vary significantly based on type, quantity, and geopolitical demand.
Small Business Impact
The data indicates this contract was not set aside for small businesses, and the awardee, Sig Sauer Inc., is a large corporation. Further analysis would be needed to determine the extent of small business participation as subcontractors.
Oversight & Accountability
The Department of the Army's procurement process, including the use of full and open competition, is subject to oversight by various defense and government accountability agencies to ensure fairness and value.
Related Government Programs
- Small Arms, Ordnance, and Ordnance Accessories Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for sole-source dependency in future.
- Price volatility of raw materials for ammunition.
- Geopolitical factors impacting supply chain.
- Lack of specific item details for granular analysis.
Tags
small-arms-ordnance-and-ordnance-accesso, department-of-defense, nh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.5 million to SIG SAUER INC.. PROCUREMENT OF AMMUNITION.
Who is the contractor on this award?
The obligated recipient is SIG SAUER 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 $39.5 million.
What is the period of performance?
Start: 2022-07-28. End: 2025-03-31.
What is the specific type and quantity of ammunition being procured, and how does this impact the overall value assessment?
The provided data does not specify the exact type or quantity of ammunition. This information is crucial for a precise value assessment, as different ammunition types have vastly different costs and strategic importance. Without this detail, the $39.5 million figure is a broad indicator, and its true value is contingent on the specific items being purchased and their intended use.
What are the potential risks associated with relying on a single supplier, even under full and open competition, for critical ammunition?
Relying on a single supplier, even after a competitive process, carries risks such as potential supply chain disruptions due to unforeseen events (e.g., natural disasters, labor strikes, geopolitical issues), limited flexibility in adapting to changing military needs, and potential for price increases in subsequent contract modifications or renewals if competition diminishes. This concentration can impact readiness if the sole source faces production issues.
How does the firm fixed price contract type ensure effectiveness and value for this ammunition procurement?
A Firm Fixed Price (FFP) contract type is generally effective for procuring standard items like ammunition because it shifts the risk of cost overruns to the contractor. This provides the government with cost certainty and encourages the contractor to manage costs efficiently to maximize profit. For the Army, this means the $39.5 million is the ceiling price, ensuring budget predictability and value as long as the contractor meets quality and delivery requirements.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Product/Service Code: WEAPONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 72 PEASE BLVD, NEWINGTON, NH, 03801
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $39,526,994
Exercised Options: $39,526,994
Current Obligation: $39,526,994
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN22D0008
IDV Type: IDC
Timeline
Start Date: 2022-07-28
Current End Date: 2025-03-31
Potential End Date: 2025-03-31 12:03:00
Last Modified: 2024-04-22
More Contracts from SIG Sauer Inc.
- Foreign Military Sale (FMS) Requirements Between the Government and Government of Israel for the Manufacturing, Assembling, Testing, Packaging and Delivery of the Commercially Available SIG Sauer Products for Foreign Military Sales (fms)requirements — $95.2M (Department of Defense)
- TO Procure Weapon Deliveries of XM7 and XM250 Rifles — $89.8M (Department of Defense)
- Next Generation Squad Weapon — $77.7M (Department of Defense)
- Delivery Order to Procure XM1188 Reduced Range Carton, XM1186 General Purpose Linked, XM1186 General Purpose Carton, XM1192 Blank Linked, XM1192 Blank Carton, XM1186 General Purpose Clipped and XM1186 General Purpose First Article Test — $76.2M (Department of Defense)
- Delivery Order for Ammunition — $73.5M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)