DoD Awards $91M Contract for 155mm Projectile Load Assembly Line
Contract Overview
Contract Amount: $91,026,424 ($91.0M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2023-02-15
End Date: 2026-07-31
Contract Duration: 1,262 days
Daily Burn Rate: $72.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: MINIMUM GUARANTEE FOR THE CONTRACTOR TO SET UP A 155MM PROJECTILE LOAD, ASSEMBLE, PACK LINE AT THE DAY AND ZIMMERMAN - KANSAS FACILITY.
Place of Performance
Location: MIDDLETOWN, DES MOINES County, IOWA, 52638
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $91.0 million to AMERICAN ORDNANCE LLC for work described as: MINIMUM GUARANTEE FOR THE CONTRACTOR TO SET UP A 155MM PROJECTILE LOAD, ASSEMBLE, PACK LINE AT THE DAY AND ZIMMERMAN - KANSAS FACILITY. Key points: 1. Contract aims to establish a critical projectile assembly line at American Ordnance LLC. 2. Competition method is 'Full and Open Competition After Exclusion of Sources', suggesting specific justifications for source selection. 3. Risk of supply chain disruption for essential munitions is mitigated by this investment. 4. Spending falls within the Ammunition Manufacturing sector, with potential for economic price adjustments.
Value Assessment
Rating: good
The contract value of $91M for setting up a specialized assembly line appears reasonable given the complexity and strategic importance of munitions production. Benchmarking against similar facility setup contracts is difficult due to the specialized nature of this requirement.
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 competition was sought, specific criteria or prior relationships likely narrowed the field, potentially impacting price discovery.
Taxpayer Impact: Taxpayer funds are being invested to enhance domestic defense manufacturing capabilities, which is a strategic necessity but requires careful monitoring to ensure cost-effectiveness.
Public Impact
Enhances domestic production capacity for critical 155mm artillery projectiles. Supports the readiness and sustainment of military forces. Invests in specialized manufacturing infrastructure and workforce development. Potential for economic price adjustments could lead to cost fluctuations over the contract period.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could increase final costs.
- Reliance on a single contractor for this critical line.
- Potential for delays in facility setup impacting production timelines.
Positive Signals
- Addresses a key defense industrial base requirement.
- Secures essential munitions production capability.
- Long-term contract duration provides stability.
Sector Analysis
This contract falls under the Ammunition (except Small Arms) Manufacturing sector. Spending benchmarks for establishing such specialized production lines are not readily available publicly, but the investment reflects a strategic priority for defense readiness.
Small Business Impact
The contract was awarded to American Ordnance LLC, a large business. There is no indication of specific provisions or set-asides for small business participation in this particular award, which is common for large-scale manufacturing infrastructure projects.
Oversight & Accountability
The Department of the Army is the contracting agency. Oversight will focus on the timely and cost-effective establishment of the assembly line, adherence to quality standards, and management of the economic price adjustment clause.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential cost overruns due to EPA.
- Dependency on a single contractor for critical capability.
- Risk of schedule delays in facility setup.
- Limited transparency in the initial source exclusion.
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 $91.0 million to AMERICAN ORDNANCE LLC. MINIMUM GUARANTEE FOR THE CONTRACTOR TO SET UP A 155MM PROJECTILE LOAD, ASSEMBLE, PACK LINE AT THE DAY AND ZIMMERMAN - KANSAS FACILITY.
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 $91.0 million.
What is the period of performance?
Start: 2023-02-15. End: 2026-07-31.
What specific factors led to the exclusion of other potential sources under the 'Full and Open Competition After Exclusion of Sources' designation?
The exclusion of sources typically occurs when a specific capability, technology, or existing infrastructure is required that only a limited number of contractors possess. For this projectile load assembly line, it might relate to proprietary processes, existing facility integration, or unique security requirements at the Day and Zimmerman - Kansas facility, necessitating a justification for limiting the competitive pool.
How will the economic price adjustment (EPA) clause be managed to protect taxpayers from excessive cost increases?
The EPA clause allows for adjustments based on fluctuations in specific economic indicators, such as labor or material costs. Effective management requires clearly defined indices, regular reviews of market data, and robust negotiation by the contracting officer to ensure adjustments are fair and reflect genuine cost changes, not contractor profit inflation.
What is the projected impact of this facility setup on the overall readiness and supply chain resilience for 155mm projectiles?
Establishing this dedicated load, assemble, and pack line is expected to significantly bolster domestic production capacity and reduce reliance on potentially vulnerable overseas supply chains. This directly enhances readiness by ensuring a more stable and predictable supply of critical munitions, improving overall defense industrial base resilience.
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: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: DAY & Zimmermann Group Inc., the
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: $91,026,424
Exercised Options: $91,026,424
Current Obligation: $91,026,424
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $18,000,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W519TC23D0014
IDV Type: IDC
Timeline
Start Date: 2023-02-15
Current End Date: 2026-07-31
Potential End Date: 2026-07-31 12:07:00
Last Modified: 2025-07-31
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