Army Awards $56.2M for 155mm Ammunition Load, Assemble, and Pack Services to American Ordnance LLC
Contract Overview
Contract Amount: $56,184,564 ($56.2M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2025-09-18
End Date: 2028-11-30
Contract Duration: 1,169 days
Daily Burn Rate: $48.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DELIVERY ORDER W15QKN25F0398 IS FOR THE MANUFACTURE, ASSEMBLY, INSPECTION, PACKAGE, AND DELIVERY OF THE 155MM M1128 LOAD, ASSEMBLE, AND PACK.
Place of Performance
Location: MIDDLETOWN, DES MOINES County, IOWA, 52638
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $56.2 million to AMERICAN ORDNANCE LLC for work described as: DELIVERY ORDER W15QKN25F0398 IS FOR THE MANUFACTURE, ASSEMBLY, INSPECTION, PACKAGE, AND DELIVERY OF THE 155MM M1128 LOAD, ASSEMBLE, AND PACK. Key points: 1. Significant contract value for specialized ammunition manufacturing. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long performance period (over 3 years) requires ongoing monitoring. 4. Focus on ammunition manufacturing places this within the defense industrial base.
Value Assessment
Rating: fair
The contract value of $56.2 million for ammunition services appears substantial. Without specific benchmarks for this type of specialized load, assemble, and pack service, it's difficult to definitively assess pricing against similar contracts. Further analysis of unit costs and historical pricing would be beneficial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process. The justification for the sole-source award needs careful review.
Taxpayer Impact: The lack of competition may result in a higher cost to taxpayers than if the contract had been awarded through a competitive bidding process.
Public Impact
Ensures supply of critical 155mm ammunition for military operations. Supports a specific defense contractor, potentially impacting the defense industrial base. Long-term contract may affect market dynamics for ammunition components and services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns due to sole-source award
- Long contract duration
Positive Signals
- Ensures critical ammunition supply
- Supports domestic manufacturing capabilities
Sector Analysis
This contract falls under the defense sector, specifically focusing on ammunition manufacturing. Spending in this area is critical for national security but can be subject to price volatility and supply chain risks. Benchmarks for ammunition production costs are often proprietary or highly specialized.
Small Business Impact
The awardee, American Ordnance LLC, is not identified as a small business. This contract does not appear to include specific provisions or set-asides for small business participation, which is common in larger defense procurements.
Oversight & Accountability
Given the sole-source nature of this award, robust oversight is crucial to ensure fair pricing and performance. The Department of the Army's contracting officers and program managers must diligently monitor contract execution and expenditures to safeguard taxpayer funds.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- Long contract duration increases exposure to market fluctuations.
- Lack of transparency in pricing justification.
- Potential for cost overruns without competitive pressure.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ia, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $56.2 million to AMERICAN ORDNANCE LLC. DELIVERY ORDER W15QKN25F0398 IS FOR THE MANUFACTURE, ASSEMBLY, INSPECTION, PACKAGE, AND DELIVERY OF THE 155MM M1128 LOAD, ASSEMBLE, AND PACK.
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 $56.2 million.
What is the period of performance?
Start: 2025-09-18. End: 2028-11-30.
What is the justification for the sole-source award, and has it been adequately documented to ensure fair and reasonable pricing?
The justification for a sole-source award is critical for ensuring fair and reasonable pricing. Agencies must provide detailed documentation, often including market research and cost/price analyses, to support why competition was not feasible. Without this documentation, it's difficult to ascertain if taxpayers are receiving good value and if the price reflects market realities.
How does the unit cost of this ammunition service compare to industry benchmarks or previous contracts for similar services?
Comparing the unit cost of this ammunition service to industry benchmarks or previous contracts is essential for assessing value. If specific data is unavailable, a thorough cost analysis by the agency, potentially involving independent cost estimators, is necessary. Benchmarking against similar, albeit not identical, defense manufacturing contracts can provide some comparative insight.
What are the potential risks associated with a long-term, sole-source contract for ammunition manufacturing, and how are they being mitigated?
Risks of a long-term, sole-source ammunition contract include potential price escalation, reduced innovation, and vendor lock-in. Mitigation strategies involve strict contract surveillance, performance metrics, regular price reviews, and potentially incorporating economic price adjustment clauses carefully. Ensuring transparency and accountability throughout the contract lifecycle is paramount.
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
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 17575 DMC 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: $56,184,564
Exercised Options: $56,184,564
Current Obligation: $56,184,564
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W15QKN23D0056
IDV Type: IDC
Timeline
Start Date: 2025-09-18
Current End Date: 2028-11-30
Potential End Date: 2028-11-30 00:00:00
Last Modified: 2025-09-22
More Contracts from American Ordnance LLC
- M795 TNT - Award of FY16 Requirements — $269.7M (Department of Defense)
- M795 TNT 155MM HE Projectiles - FY20 Requirements Awarded — $229.3M (Department of Defense)
- Ukraine: Multi-Year, UCA Delivery Order for M1128 LAP Projectiles — $192.6M (Department of Defense)
- Order W519tc25f0357 IS for the Contractor to Load, Assemble, and Pack a Quantity of 388,436 155MM M795 TNT Loaded Projectiles — $188.1M (Department of Defense)
- Order W519tc24f0399 IS for the Contractor to Load, Assemble, and Pack a Quantity of 346,478 155MM M795 TNT Loaded Projectiles — $151.2M (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)