DoD Awards $30.6M for 30,000 Monthly 155mm HE M795 Projectile Production Increase by FY25 Q2
Contract Overview
Contract Amount: $30,604,758 ($30.6M)
Contractor: General Dynamics-Ots, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-09-22
End Date: 2025-03-31
Contract Duration: 556 days
Daily Burn Rate: $55.0K/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: INCREASE CAPACITY OF 155MM HIGH EXPLOSIVE TNT M795 LOAD, ASSEMBLY AND PACK (LAP) PRODUCTION BY AN ADDITIONAL RATE OF 30,000 PROJECTILES PER MONTH BY THE SECOND QUARTER OF FISCAL YEAR 2025.
Place of Performance
Location: HAMPTON, CALHOUN County, ARKANSAS, 71744
State: Arkansas Government Spending
Plain-Language Summary
Department of Defense obligated $30.6 million to GENERAL DYNAMICS-OTS, INC. for work described as: INCREASE CAPACITY OF 155MM HIGH EXPLOSIVE TNT M795 LOAD, ASSEMBLY AND PACK (LAP) PRODUCTION BY AN ADDITIONAL RATE OF 30,000 PROJECTILES PER MONTH BY THE SECOND QUARTER OF FISCAL YEAR 2025. Key points: 1. Significant capacity expansion for critical 155mm artillery shells. 2. General Dynamics-OTS, Inc. is the sole awardee, raising questions about competition. 3. Firm Fixed Price contract type offers cost certainty but may limit flexibility. 4. Focus on production rate increase, not necessarily unit cost reduction.
Value Assessment
Rating: fair
The contract value of $30.6M for a production increase over approximately 18 months suggests a per-unit cost that needs benchmarking against similar LAP contracts. Without specific unit volume targets tied to the award amount, a precise per-unit cost assessment is difficult.
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 scenario. This approach may have restricted price discovery and potentially led to a higher price than a truly open competition.
Taxpayer Impact: Taxpayer funds are being used to increase essential munition production. The limited competition raises concerns about whether the most cost-effective solution was secured.
Public Impact
Enhances US military readiness by boosting artillery shell production. Supports ongoing global military aid and potential future conflicts. Impacts the defense industrial base and supply chain resilience. Potential for follow-on contracts if production needs continue.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may result in suboptimal pricing.
- Sole awardee could create single-source dependency.
- Production ramp-up risks quality control issues.
Positive Signals
- Addresses critical need for increased artillery shell capacity.
- Firm Fixed Price contract provides budget predictability.
- Clear delivery timeline to meet production goals.
Sector Analysis
This contract falls within the Ammunition (except Small Arms) Manufacturing sector, a critical component of the defense industrial base. Spending benchmarks for similar LAP contracts are essential for evaluating cost-effectiveness, especially given the current geopolitical demand for artillery munitions.
Small Business Impact
The awardee, General Dynamics-OTS, Inc., is a large business. There is no indication of small business participation in this specific delivery order, which is common for specialized defense manufacturing contracts.
Oversight & Accountability
The Department of the Army is the contracting agency. Oversight will focus on ensuring timely delivery, adherence to production rates, and quality control. The limited competition aspect warrants scrutiny to ensure fair pricing and value for taxpayer dollars.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition may lead to higher costs.
- Sole awardee increases supply chain risk.
- Potential for production delays or quality issues during ramp-up.
- Lack of transparency in the source exclusion justification.
- Contract value does not clearly delineate LAP costs from material costs.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ar, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.6 million to GENERAL DYNAMICS-OTS, INC.. INCREASE CAPACITY OF 155MM HIGH EXPLOSIVE TNT M795 LOAD, ASSEMBLY AND PACK (LAP) PRODUCTION BY AN ADDITIONAL RATE OF 30,000 PROJECTILES PER MONTH BY THE SECOND QUARTER OF FISCAL YEAR 2025.
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 $30.6 million.
What is the period of performance?
Start: 2023-09-22. End: 2025-03-31.
What is the projected cost per projectile for this production increase, and how does it compare to industry benchmarks for similar Load, Assembly, and Pack (LAP) services?
The total award is $30.6M for an unspecified number of projectiles to achieve an additional rate of 30,000 per month by Q2 FY25. Without a defined total quantity or a breakdown of the LAP cost versus material cost, calculating a precise per-unit cost is challenging. Benchmarking would require access to data on comparable LAP contracts for the M795 projectile or similar munitions.
Given the 'Full and Open Competition After Exclusion of Sources' justification, what specific factors prevented a broader competitive solicitation, and what is the assessed risk to price competitivene
Excluding sources typically implies a belief that only certain contractors possess the necessary capabilities, security clearances, or existing infrastructure to meet urgent requirements. The risk to price competitiveness is moderate to high, as limiting the pool of bidders inherently reduces market pressure. A thorough justification and price analysis are crucial to mitigate this risk.
How will the Department of the Army ensure the quality and reliability of the increased M795 projectile production, particularly during the ramp-up phase?
The Army will likely implement rigorous quality assurance surveillance plans (QASP), conduct pre-production inspections, and perform lot testing throughout the production process. Increased oversight during the initial ramp-up phase, including on-site government quality assurance representatives, is standard practice to mitigate risks associated with scaling production rapidly.
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: $30,604,758
Exercised Options: $30,604,758
Current Obligation: $30,604,758
Subaward Activity
Number of Subawards: 37
Total Subaward Amount: $24,090,993
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W519TC23D0015
IDV Type: IDC
Timeline
Start Date: 2023-09-22
Current End Date: 2025-03-31
Potential End Date: 2025-03-31 00:00:00
Last Modified: 2025-12-16
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