DoD's $1.07B Hydra-70 Rocket System Contract Awarded to General Dynamics-OTS, Inc. in FY10
Contract Overview
Contract Amount: $1,067,712,244 ($1.1B)
Contractor: General Dynamics-Ots, Inc.
Awarding Agency: Department of Defense
Start Date: 2010-05-20
End Date: 2012-10-31
Contract Duration: 895 days
Daily Burn Rate: $1.2M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FY 10 REQUIREMENTS FOR FAMILY OF MUNITIONS - HYDRA-70 2.75-INCH ROCKET SYSTEM
Place of Performance
Location: HAMPTON, CALHOUN County, ARKANSAS, 71744
State: Arkansas Government Spending
Plain-Language Summary
Department of Defense obligated $1.07 billion to GENERAL DYNAMICS-OTS, INC. for work described as: FY 10 REQUIREMENTS FOR FAMILY OF MUNITIONS - HYDRA-70 2.75-INCH ROCKET SYSTEM Key points: 1. The Department of Defense awarded a significant contract for the Hydra-70 rocket system, a key munition. 2. General Dynamics-OTS, Inc. was the sole awardee, raising questions about competition. 3. The contract's duration of 895 days suggests a substantial, ongoing need for these munitions. 4. The ammunition manufacturing sector is critical for defense readiness, with this contract representing a large portion of spending in that sub-sector.
Value Assessment
Rating: fair
The contract value of over $1 billion for a family of munitions suggests a significant investment. Benchmarking against similar large-scale munition contracts would be necessary to fully assess pricing effectiveness, but the firm fixed-price structure offers some cost control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Dynamics-OTS, Inc. The lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The sole-source nature of this large contract may result in taxpayers paying a premium due to the absence of competitive bidding.
Public Impact
Ensures continued supply of a critical munition for military operations. Potential for higher costs due to lack of competitive bidding. Supports a major defense contractor and its manufacturing capabilities. Long-term contract may indicate strategic importance and sustained demand.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Large contract value
Positive Signals
- Firm fixed-price contract
- Ensures supply of critical munition
Sector Analysis
The defense sector, particularly ammunition manufacturing, is vital for national security. This contract for the Hydra-70 rocket system, a widely used munition, represents a substantial investment within this critical sub-sector.
Small Business Impact
The data indicates that small businesses were not directly involved in this specific contract award. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The contract was awarded by the Department of Defense, with oversight likely provided by the Defense Contract Management Agency. The firm fixed-price nature provides some level of cost accountability, but the sole-source award warrants scrutiny.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition
- Potential for inflated pricing
- Lack of transparency in award justification
- Dependency on a single supplier for critical munition
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ar, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.07 billion to GENERAL DYNAMICS-OTS, INC.. FY 10 REQUIREMENTS FOR FAMILY OF MUNITIONS - HYDRA-70 2.75-INCH ROCKET SYSTEM
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.07 billion.
What is the period of performance?
Start: 2010-05-20. End: 2012-10-31.
What is the justification for the sole-source award of this significant munition contract?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of viable alternatives. Without specific documentation, it's difficult to ascertain the precise reasons. However, the absence of competition raises concerns about potential cost inefficiencies and missed opportunities for better pricing through a competitive process.
How does the unit cost of the Hydra-70 rocket system under this contract compare to industry benchmarks or previous contracts?
Benchmarking the unit cost is crucial for assessing value. Given this is a sole-source award, direct comparison to competitive bids is impossible. However, analyzing historical pricing for the Hydra-70 system or similar munitions from other manufacturers could reveal if the current pricing is within an acceptable range or if it appears inflated due to the lack of competition.
What is the long-term strategic impact of awarding such a large contract to a single supplier for a critical munition?
Awarding a large, sole-source contract to one supplier for a critical munition can create dependency and potentially stifle innovation within the broader defense industrial base. While ensuring supply, it may limit future sourcing options and reduce overall market competition, potentially impacting long-term cost-effectiveness and technological advancement.
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: W31P4Q10R0081
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 326 IBM ROAD BUILDING 862, WILLISTON, VT, 05495
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: $1,067,712,244
Exercised Options: $1,067,712,244
Current Obligation: $1,067,712,244
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-05-20
Current End Date: 2012-10-31
Potential End Date: 2012-10-31 00:00:00
Last Modified: 2021-02-18
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