Army awards $194.8M contract for ammunition manufacturing to General Dynamics

Contract Overview

Contract Amount: $39,617,624 ($39.6M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-08-29

End Date: 2009-02-28

Contract Duration: 1,279 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200511!001682!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0065 !A!N! !N! ! !20050829!20070930!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000020575272!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!J!2!003!N!3A!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $39.6 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 200511!001682!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0065 !A!N! !N! ! !20050829!20070930!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILL… Key points: 1. Contract awarded for ammunition manufacturing services. 2. General Dynamics secured the contract, indicating a significant supplier relationship. 3. The contract duration of 1279 days suggests a long-term need for these services. 4. The award value of $194.8 million represents substantial federal investment in ordnance. 5. The contract falls under the 'Ammunition (except Small Arms) Manufacturing' NAICS code. 6. This award is part of the Department of Defense's broader procurement strategy for munitions.

Value Assessment

Rating: good

The contract value of $194.8 million for ammunition manufacturing appears reasonable given the duration and the nature of the goods. Benchmarking against similar large-scale ammunition production contracts would provide a clearer picture of value for money. However, the fixed-price nature of the contract suggests that the government has a defined cost expectation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while competition was sought, certain sources were excluded. The number of bidders is not explicitly stated, but this type of competition often suggests a more limited pool than full and open competition. This could potentially impact price discovery if the excluded sources represent significant market players.

Taxpayer Impact: Taxpayers benefit from competition, even if limited, as it generally drives better pricing. However, the exclusion of sources warrants scrutiny to ensure fair market access and optimal value.

Public Impact

The U.S. Army is the primary beneficiary, receiving essential ammunition supplies. This contract supports the production of ammunition, crucial for military readiness. The contract is geographically focused on Illinois, where General Dynamics operates. It implies sustained employment and business activity for General Dynamics and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources.
Reliance on a single contractor for a critical defense commodity.
Long-term contract duration may reduce flexibility in adapting to new technologies or market shifts.

Positive Signals

Award to an established defense contractor with a track record.
Firm Fixed Price contract type provides cost certainty for the government.
The contract addresses a clear and ongoing need for military supplies.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of ammunition. The market for defense-related manufacturing is characterized by long-term government contracts, specialized production capabilities, and significant barriers to entry. General Dynamics is a major player in this space, and this contract represents a significant portion of their ordnance business. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurement contracts across different branches of the military.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor, General Dynamics, is a large corporation. There is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether General Dynamics engages small businesses in its supply chain for this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Contracting Command, with potential involvement from the Defense Contract Management Agency (DCMA) for performance monitoring. Accountability measures are inherent in the firm-fixed-price structure, requiring delivery of specified goods. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are often not publicly disclosed.

Related Government Programs

Department of Defense Ammunition Procurement
Army Ordnance Manufacturing Programs
Defense Industrial Base Contracts
General Dynamics Defense Contracts

Risk Flags

Limited Competition
Long-Term Contract
Critical Defense Commodity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.6 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 200511!001682!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0065 !A!N! !N! ! !20050829!20070930!006317473!194860813!001381284!N!GENERAL DYNAMICS, ORDNANCE AND!8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !+000020575272!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, 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 $39.6 million.

What is the period of performance?

Start: 2005-08-29. End: 2009-02-28.

What is General Dynamics' track record with similar ammunition contracts?

General Dynamics, through its Ordnance and Tactical Systems division, has a long-standing history of producing munitions for the U.S. military and allied nations. They are a key supplier for various types of ammunition, including artillery shells, mortar rounds, and tank rounds. Their track record typically involves large-scale production, adherence to strict quality control standards, and managing complex supply chains. Past performance reviews and contract awards from agencies like the Department of the Army and the Department of the Navy would provide detailed insights into their reliability, on-time delivery rates, and quality of products for similar ammunition manufacturing contracts.

How does the $194.8 million value compare to other ammunition contracts of similar scope?

The $194.8 million award for ammunition manufacturing over approximately 3.5 years (1279 days) suggests a substantial but not unprecedented investment. To benchmark this value, one would need to compare it with other firm-fixed-price contracts for the production of similar types and quantities of ammunition awarded by the Department of Defense. Factors such as the specific caliber, explosive fill, and technological sophistication of the ammunition significantly influence cost. Analyzing the average annual value ($55.7 million/year) against historical data for large-caliber ammunition production would provide context on whether this represents a competitive price point for the government.

What are the primary risks associated with this contract for the government?

The primary risks for the government include potential supply chain disruptions affecting General Dynamics' ability to meet production demands, quality control issues leading to defective munitions, and cost overruns if the firm-fixed-price structure doesn't adequately account for unforeseen material or labor cost increases. There's also a risk related to the 'limited competition' aspect, where the exclusion of certain sources might mean the government isn't achieving the absolute lowest possible price. Furthermore, reliance on a single contractor for a critical defense commodity can pose strategic risks if that contractor faces financial instability or operational challenges.

How effective is this contract in ensuring the U.S. Army's ammunition readiness?

This contract is likely effective in ensuring a steady supply of specific types of ammunition, contributing to the U.S. Army's overall readiness. By securing a large-volume contract with a major manufacturer like General Dynamics, the Army can maintain necessary inventory levels for training, deployment, and strategic reserves. The effectiveness is directly tied to the contractor's performance in meeting delivery schedules and quality specifications. Continuous monitoring by the Army and potentially the DCMA is crucial to ensure the contract fulfills its intended purpose of bolstering ammunition stocks.

What are the historical spending patterns for ammunition manufacturing by the Department of the Army?

Historical spending patterns for ammunition manufacturing by the Department of the Army show a consistent and significant investment, often in the billions of dollars annually, reflecting the ongoing global security environment and the need for robust munitions stockpiles. Spending fluctuates based on geopolitical events, modernization programs, and operational tempo. Contracts are typically awarded through competitive processes, though sole-source or limited-source awards occur for specialized or critical munitions. The Army frequently engages large defense contractors, including General Dynamics, for these procurements, often utilizing firm-fixed-price contracts to manage costs over multi-year periods.

What is the significance of the NAICS code 332993 (Ammunition (except Small Arms) Manufacturing) in the context of federal spending?

NAICS code 332993 signifies federal spending directed towards the manufacturing of ammunition, excluding small arms ammunition (typically under .50 caliber). This category encompasses a wide range of ordnance, including artillery shells, mortar rounds, missiles, bombs, and related components. Federal agencies, primarily the Department of Defense, are the largest purchasers within this sector. Spending under this code is critical for national defense, supporting military operations, training, and readiness. The size and nature of contracts within this NAICS code often indicate significant technological investment and production capacity requirements.

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: ONLY ONE SOURCE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 8820 ROUTE 148, MARION, IL, 12

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline