DoD's $231.6M tank training ammunition contract awarded to Alliant Techsystems Operations LLC shows fair value

Contract Overview

Contract Amount: $231,631,013 ($231.6M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2004-02-17

End Date: 2009-03-31

Contract Duration: 1,869 days

Daily Burn Rate: $123.9K/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: 120MM TANK TRAINING AMMUNITION

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $231.6 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: 120MM TANK TRAINING AMMUNITION Key points: 1. The contract value of $231.6 million over approximately 5 years suggests a significant investment in military readiness. 2. Competition was full and open after exclusion of sources, indicating a deliberate procurement strategy. 3. The firm-fixed-price contract type generally transfers risk to the contractor, potentially stabilizing costs. 4. The contract's duration of 1869 days (approx. 5 years) aligns with typical long-term defense supply needs. 5. The North American Industry Classification System (NAICS) code 332993 points to ammunition manufacturing, a specialized sector. 6. The contract was awarded to a single entity, Alliant Techsystems Operations LLC, highlighting their role in this niche.

Value Assessment

Rating: good

The total contract value of $231.6 million for tank training ammunition over nearly five years appears reasonable given the specialized nature of the product and the defense sector's procurement norms. Benchmarking against similar large-scale ammunition contracts is challenging without more specific data on unit types and quantities. However, the firm-fixed-price structure suggests that the government has secured a predictable cost for the duration of the contract, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This procurement method suggests that while the competition was intended to be broad, specific criteria or circumstances led to the exclusion of certain potential bidders. The number of bidders is not explicitly stated, but the 'exclusion of sources' implies a more controlled competition than a purely open solicitation. This approach can sometimes be used when specific technical capabilities or existing relationships are critical, potentially impacting the breadth of price discovery.

Taxpayer Impact: While the competition was not entirely unrestricted, the 'after exclusion of sources' approach aims to balance specialized needs with competitive principles. Taxpayers benefit from a structured procurement process that seeks qualified suppliers while potentially managing risks associated with highly specialized defense materiel.

Public Impact

This contract directly supports the training and readiness of U.S. Army tank units by providing essential ammunition. The primary beneficiaries are military personnel who require realistic training scenarios to maintain combat effectiveness. The geographic impact is likely concentrated around training ranges and military installations where tank units operate. The contract supports jobs within the defense manufacturing sector, specifically in ammunition production facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition remains limited.
Dependence on a single contractor could create supply chain vulnerabilities if not managed proactively.
The 'exclusion of sources' aspect warrants scrutiny to ensure it was justified and did not unduly restrict competition.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Award to a known entity in defense manufacturing suggests established production capabilities.
Long contract duration indicates a stable supply chain for critical training needs.

Sector Analysis

The defense sector, particularly the segment focused on munitions manufacturing, is characterized by high barriers to entry due to specialized technology, stringent quality control, and long qualification processes. Contracts for training ammunition are crucial for maintaining military readiness and are often awarded through competitive but carefully managed solicitations. The market size for such specialized ammunition is significant, driven by global defense spending and the need for realistic training environments. This contract fits within the broader category of defense procurement for essential warfighting materiel.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses within this award. The primary contractor, Alliant Techsystems Operations LLC, is likely a large defense contractor, and their internal subcontracting practices would determine any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management structures, including the Department of the Army. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is generally maintained through contract award databases like FPDS, though specific performance metrics and detailed spending breakdowns may be less publicly accessible due to national security considerations.

Related Government Programs

Department of Defense Ammunition Procurement
Army Training and Doctrine Command (TRADOC) Support
Defense Logistics Agency (DLA) Contracts
Military Munitions Manufacturing
Tactical Vehicle Ammunition

Risk Flags

Competition Level
Contract Type
Contract Duration
Contract Value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $231.6 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. 120MM TANK TRAINING AMMUNITION

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS 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 $231.6 million.

What is the period of performance?

Start: 2004-02-17. End: 2009-03-31.

What is the historical spending pattern for tank training ammunition by the Department of the Army?

Analyzing historical spending patterns for tank training ammunition by the Department of the Army requires access to detailed procurement data over multiple fiscal years. Typically, such spending fluctuates based on training tempo, operational deployments, and budget allocations. Contracts for ammunition are often awarded on a multi-year basis, leading to significant annual outlays. Without specific historical data points for this particular type of ammunition, it's difficult to provide precise figures. However, defense budgets generally prioritize readiness, and ammunition is a fundamental component of that readiness. Trends might show increased spending during periods of heightened geopolitical tension or significant military exercises, and potentially decreased spending during drawdowns or budget austerity.

How does the awarded price compare to similar tank training ammunition contracts awarded to other entities?

Direct price comparison for this $231.6 million contract is challenging without knowing the exact specifications, quantity, and type of tank training ammunition procured. Different calibers, explosive fills, and performance characteristics significantly influence unit costs. Furthermore, the 'Full and Open Competition After Exclusion of Sources' award mechanism might suggest unique requirements that limit direct comparability. To perform a robust comparison, one would need to identify contracts for identical or highly similar ammunition types, awarded around the same period, under comparable competitive conditions. Benchmarking would involve analyzing the price per round or per pound, adjusted for any known differences in specifications or contract terms.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance on this contract?

Key Performance Indicators (KPIs) for a contract like this typically focus on delivery timeliness, quality control, and adherence to specifications. For tank training ammunition, critical KPIs would include on-time delivery rates to designated military installations or training ranges, the defect rate of manufactured ammunition (e.g., duds, misfires, or out-of-spec rounds), and compliance with safety and environmental standards during production and transport. The contractor's ability to meet production schedules and maintain consistent quality is paramount for ensuring training continuity. Performance might also be assessed based on responsiveness to any urgent requirements or modifications requested by the Army.

What is the track record of Alliant Techsystems Operations LLC in fulfilling defense ammunition contracts?

Alliant Techsystems Operations LLC (now part of Northrop Grumman) has a long-standing and significant track record in fulfilling defense contracts, particularly in the area of munitions and ordnance. They are a major supplier of various types of ammunition, including small, medium, and large caliber rounds, as well as propellants and related energetic materials. Their history includes numerous contracts with the Department of Defense, often involving complex manufacturing processes and stringent quality requirements. While specific performance details for every contract are not always public, their continued success in securing large-scale defense contracts suggests a generally positive performance history and established capabilities in meeting military demands for ammunition.

What are the potential risks associated with the 'Full and Open Competition After Exclusion of Sources' procurement method for this contract?

The 'Full and Open Competition After Exclusion of Sources' method, while intended to ensure competition among qualified entities, carries specific risks. The primary risk is that the exclusion criteria, if not carefully defined and justified, could inadvertently limit the pool of potential bidders more than necessary, potentially leading to higher prices or reduced innovation. There's also a risk that eligible but excluded sources might feel unfairly treated, leading to protests or future reluctance to participate. For taxpayers, the risk lies in potentially paying more than if a truly unrestricted competition had occurred. Ensuring the exclusion criteria were based on legitimate technical, capability, or security requirements is crucial for mitigating these risks.

How does this contract contribute to the overall readiness and training objectives of the U.S. Army?

This contract is fundamental to the U.S. Army's readiness and training objectives. Tank training ammunition is essential for conducting realistic simulations and exercises that prepare soldiers and units for combat scenarios. Without a consistent and reliable supply of this ammunition, training effectiveness would be severely hampered, potentially leading to reduced combat proficiency and increased risks during actual operations. The $231.6 million investment signifies the Army's commitment to maintaining a high level of training realism, ensuring that personnel can effectively operate and employ armored vehicles and their associated weaponry under various conditions.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 4700 NATHAN LANE NORTH, MINNEAPOLIS, MN, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline