DoD awards $120.6M for M231/M232A2 MACS LAP propelling charges for 155mm artillery
Contract Overview
Contract Amount: $120,645,180 ($120.6M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2024-09-09
End Date: 2030-05-31
Contract Duration: 2,090 days
Daily Burn Rate: $57.7K/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: (PAA FUNDING) THE PURPOSE OF THIS DELIVERY ORDER IS TO PURCHASE M231 AND M232A2 MACS LAP FOR THE 155MM PROPELLING CHARGES.
Place of Performance
Location: MIDDLETOWN, DES MOINES County, IOWA, 52638
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $120.6 million to AMERICAN ORDNANCE LLC for work described as: UKRAINE: (PAA FUNDING) THE PURPOSE OF THIS DELIVERY ORDER IS TO PURCHASE M231 AND M232A2 MACS LAP FOR THE 155MM PROPELLING CHARGES. Key points: 1. Significant investment in artillery ammunition components for Ukraine support. 2. Competition method suggests potential for price discovery, but exclusion of sources warrants scrutiny. 3. Risk of supply chain disruption for critical defense components. 4. Ammunition manufacturing sector is vital for national security and allied support.
Value Assessment
Rating: good
The contract value of $120.6M for propelling charges appears reasonable given the quantity and specialized nature of the components. Benchmarking against similar ammunition component contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may restrict price discovery compared to full and open competition, potentially leading to higher costs.
Taxpayer Impact: Taxpayer funds are being used to procure essential components for artillery systems, supporting military readiness and allied aid. The limited competition aspect warrants monitoring for cost-effectiveness.
Public Impact
Ensures continued supply of critical components for 155mm artillery, vital for current military operations. Supports allied nations, specifically Ukraine, by providing necessary ammunition components. Maintains readiness of U.S. military forces through sustained procurement of essential munitions. Impacts the defense industrial base, supporting jobs and manufacturing capabilities in the ammunition sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may impact cost-effectiveness.
- Supply chain vulnerability for specialized components.
- Geopolitical factors influencing demand and production.
Positive Signals
- Supports critical defense needs and allied assistance.
- Long-term contract provides stability for the supplier.
- Procurement of essential artillery components.
Sector Analysis
This contract falls within the defense sector, specifically ammunition manufacturing. Spending benchmarks for similar artillery components can vary widely based on technological sophistication, quantity, and geopolitical demand.
Small Business Impact
The contract was awarded to American Ordnance LLC, a large business. There is no indication of small business participation in this specific delivery order, which is common for large-scale defense manufacturing contracts.
Oversight & Accountability
The Department of the Army, under the Department of Defense, is responsible for oversight. The contract type (Firm Fixed Price) aims to control costs, and the duration suggests a planned, sustained need.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition may result in higher costs.
- Potential for supply chain vulnerabilities.
- Dependence on a single supplier for critical components.
- Geopolitical instability impacting long-term demand and pricing.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ia, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $120.6 million to AMERICAN ORDNANCE LLC. UKRAINE: (PAA FUNDING) THE PURPOSE OF THIS DELIVERY ORDER IS TO PURCHASE M231 AND M232A2 MACS LAP FOR THE 155MM PROPELLING CHARGES.
Who is the contractor on this award?
The obligated recipient is AMERICAN ORDNANCE 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 $120.6 million.
What is the period of performance?
Start: 2024-09-09. End: 2030-05-31.
What specific factors led to the exclusion of other potential sources in this limited competition?
The exclusion of sources likely stems from specific technical requirements, existing production capabilities, or security considerations related to the M231 and M232A2 MACS LAP propelling charges. Understanding these factors is crucial to assessing whether the limited competition was justified and if it truly represented the best value available, despite potentially reducing the scope of price discovery.
How does the unit cost of these propelling charges compare to historical benchmarks or similar international procurements?
A detailed comparison of the per-unit cost against historical data for similar propelling charges, adjusted for inflation and technological advancements, is necessary. Benchmarking against procurements by allied nations or previous contracts with different competition structures can reveal potential cost savings or overspending, providing insight into the value achieved.
What is the assessed risk of supply chain disruption for these specific components, and are there mitigation strategies in place?
The risk of supply chain disruption is moderate, given the specialized nature of the components and reliance on specific manufacturing processes. Mitigation strategies may include maintaining strategic reserves, diversifying suppliers where feasible, or investing in domestic production capabilities to ensure a consistent flow of these critical items.
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
Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 52638
Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $120,645,180
Exercised Options: $120,645,180
Current Obligation: $120,645,180
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN19D0109
IDV Type: IDC
Timeline
Start Date: 2024-09-09
Current End Date: 2030-05-31
Potential End Date: 2030-05-31 00:00:00
Last Modified: 2024-09-09
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