DoD awards $55.4M for M231/M232A2 MACS propellants, supporting Presidential buyback effort

Contract Overview

Contract Amount: $55,373,339 ($55.4M)

Contractor: General Dynamics-Ots, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2030-01-31

Contract Duration: 2,317 days

Daily Burn Rate: $23.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UKRAINE: THIS DELIVERY ORDER IS FOR THE PURCHASE OF PRODUCTION QUANTITIES FOR THE M231 AND M232A2 MACS LAP PROPELLING CHARGES TO SUPPORT THE PRESIDENTIAL BUYBACK EFFORT.

Place of Performance

Location: NICEVILLE, OKALOOSA County, FLORIDA, 32578

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $55.4 million to GENERAL DYNAMICS-OTS, INC. for work described as: UKRAINE: THIS DELIVERY ORDER IS FOR THE PURCHASE OF PRODUCTION QUANTITIES FOR THE M231 AND M232A2 MACS LAP PROPELLING CHARGES TO SUPPORT THE PRESIDENTIAL BUYBACK EFFORT. Key points: 1. Contract supports critical munitions production for a Presidential initiative. 2. Full and open competition was utilized after excluding specific sources. 3. The contract has a long performance period extending into 2030. 4. Pricing is fixed, providing cost certainty for the government. 5. The awardee is a significant defense contractor with established capabilities. 6. This procurement falls under the Ammunition (except Small Arms) Manufacturing NAICS code.

Value Assessment

Rating: good

The contract value of $55.4 million for M231 and M232A2 MACS propelling charges appears reasonable given the production quantities and the extended performance period through January 2030. Benchmarking against similar large-scale ammunition production contracts would provide further insight into value for money. The firm fixed-price structure helps mitigate cost overruns for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, certain sources were excluded, suggesting a specific technical requirement or existing relationship that narrowed the field. The number of bidders is not specified, but the 'limited' nature implies fewer than a fully open competition.

Taxpayer Impact: The exclusion of sources may limit the potential for the lowest possible price, as the competitive pool was intentionally restricted. However, it could also ensure that the awarded contractor possesses the specific capabilities required for this specialized munition.

Public Impact

The primary beneficiaries are the U.S. military forces requiring these specific munitions. The contract ensures the production of M231 and M232A2 MACS propelling charges. The geographic impact is primarily within the United States, where production will occur. This contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to source exclusion could impact price.
Long contract duration may require ongoing performance monitoring.
Reliance on a single awardee for critical munition components.

Positive Signals

Awardee is an established defense contractor with relevant experience.
Firm fixed-price contract provides cost predictability.
Supports a Presidential initiative, indicating strategic importance.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for such specialized munitions is typically dominated by a few large defense contractors due to high barriers to entry, including specialized manufacturing capabilities, security clearances, and established supply chains. The total addressable market for such components is tied to military readiness and strategic procurement cycles.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the awardee is a large corporation and there is no indication of small business set-asides. Subcontracting opportunities for small businesses may exist within the supply chain for raw materials or components, but this is not explicitly detailed in the award information. The overall impact on the small business ecosystem is likely minimal for this specific prime contract.

Oversight & Accountability

Oversight will be provided by the Department of the Army, likely through contracting officers and program managers. Accountability is established through the firm fixed-price contract terms, requiring delivery of specified quantities and quality. Transparency is facilitated by the public nature of contract awards, though specific production details and cost breakdowns may be proprietary.

Related Government Programs

Department of Defense Ammunition Procurement
Presidential Drawdown Authority Support
MACS (Modular Artillery Charge System) Program
Defense Production Act Initiatives

Risk Flags

Potential for limited competition
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.4 million to GENERAL DYNAMICS-OTS, INC.. UKRAINE: THIS DELIVERY ORDER IS FOR THE PURCHASE OF PRODUCTION QUANTITIES FOR THE M231 AND M232A2 MACS LAP PROPELLING CHARGES TO SUPPORT THE PRESIDENTIAL BUYBACK EFFORT.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS-OTS, 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 $55.4 million.

What is the period of performance?

Start: 2023-09-28. End: 2030-01-31.

What is the historical spending pattern for M231 and M232A2 MACS propelling charges by the Department of Defense?

Historical spending data for specific munition components like the M231 and M232A2 MACS propelling charges can be complex to isolate. Typically, such procurements are part of larger ammunition or weapon system contracts. The Department of Defense (DoD) consistently allocates significant funds to munition procurement to maintain readiness and support ongoing operations and strategic initiatives. Analyzing past contract awards for the MACS system or similar modular charge systems would reveal trends in quantity, pricing, and awardees. For instance, prior awards might show fluctuations based on operational tempo, inventory needs, and modernization efforts. Without access to granular historical contract data specifically for these propelling charges, a precise spending pattern is difficult to establish, but it is reasonable to assume consistent, albeit variable, investment over time to sustain the necessary munition stocks.

How does the per-unit cost of these propelling charges compare to similar munitions or previous contracts?

Determining the precise per-unit cost requires access to the detailed contract line item numbers and quantities, which are not fully provided in the summary data. The total award of $55.4 million over a period potentially covering thousands of units makes a direct per-unit calculation difficult without knowing the exact quantity. However, the 'Full and Open Competition After Exclusion of Sources' suggests that while competitive, the pool of bidders was limited, which could influence pricing. Comparing this to other modular artillery charge systems or similar munition components procured by the DoD would be necessary for a robust benchmark. Factors such as material costs, manufacturing complexity, and the scale of production significantly impact per-unit pricing. A firm fixed-price contract aims to lock in a price, but its competitiveness is relative to the market and the specific technical requirements.

What are the specific risks associated with the long performance period (ending 2030)?

The extended performance period of this contract, ending in January 2030, presents several potential risks. Firstly, there's a risk of technological obsolescence; while these are established components, future military requirements or advancements in munition technology could render them less relevant or require modifications. Secondly, economic risks, such as inflation or significant fluctuations in raw material costs, could impact the contractor's profitability if not adequately managed within the fixed-price structure, potentially leading to requests for equitable adjustments or performance issues. Thirdly, geopolitical shifts or changes in strategic priorities could alter the demand for these specific munitions, potentially leading to underutilization or the need for contract modifications. Finally, maintaining consistent quality control and contractor performance over such a long duration requires diligent oversight and robust relationship management from the government's perspective.

What is the track record of GENERAL DYNAMICS-OTS, INC. in delivering similar munition components?

General Dynamics Ordnance and Tactical Systems (OTS), a business unit of General Dynamics, has a well-established and extensive track record in the defense industry, particularly in the manufacturing of munitions, ordnance, and related systems. They are known for producing a wide array of products, including artillery shells, mortar systems, and various types of energetic materials and propellants. Their experience encompasses large-scale production, meeting stringent military specifications, and managing complex supply chains. Given their significant role as a prime contractor for the U.S. military and allied nations, it is highly probable that they have prior experience delivering components similar to the M231 and M232A2 MACS propelling charges. Their history suggests a capability to handle substantial production volumes and adhere to demanding quality and delivery schedules.

How does this contract align with the broader strategic goals of the Department of the Army regarding ammunition readiness?

This contract directly aligns with the Department of the Army's strategic goals concerning ammunition readiness, particularly by ensuring the production of critical components for the MACS (Modular Artillery Charge System). The mention of supporting a 'Presidential Buyback Effort' underscores its high strategic priority. Maintaining adequate stocks of essential munitions is fundamental to the Army's ability to project power, sustain combat operations, and respond to national security threats. Procuring production quantities of these propelling charges ensures that the Army can replenish its inventory, support training exercises, and equip forces for potential deployments. This specific award contributes to the overall objective of modernizing and maintaining a ready and capable munitions enterprise.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 115 HART ST, NICEVILLE, FL, 32578

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

Financial Breakdown

Contract Ceiling: $55,373,339

Exercised Options: $55,373,339

Current Obligation: $55,373,339

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN19D0110

IDV Type: IDC

Timeline