Army awards $22.5M contract for ammunition components, with KDI Precision Products Inc. as the primary manufacturer
Contract Overview
Contract Amount: $22,505,798 ($22.5M)
Contractor: L3harris Fuzing and Ordnance Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-09-19
End Date: 2012-12-31
Contract Duration: 2,660 days
Daily Burn Rate: $8.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200512!001988!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0069 !A!N! !N! ! !20050919!20090607!041603077!041603077!008898843!N!KDI PRECISION PRODUCTS INC !3975 MCMANN RD !CINCINNATI !OH!45245!15000!061!39!CINCINNATI !HAMILTON !OHIO !+000017083960!N!N!000000000000!1325!BOMBS !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !20200930!B! ! !B! !A!N!J!2!006!N!3A!A!N!Z! ! !N!C!N! ! ! !A!C!A!A!000!A!C!Y! ! ! ! ! ! !0001! !
Place of Performance
Location: CINCINNATI, CLERMONT County, OHIO, 45245
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $22.5 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC. for work described as: 200512!001988!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0069 !A!N! !N! ! !20050919!20090607!041603077!041603077!008898843!N!KDI PRECISION PRODUCTS INC !3975 MCMANN RD !CINCINNATI !OH!45245!15000!061!39!CINCINNATI !HAMI… Key points: 1. Contract value of $22.5 million for ammunition components indicates significant investment in defense readiness. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract duration of over 8 years (2660 days) points to a long-term need for these components. 4. The primary product code (332993) relates to Ammunition (except Small Arms) Manufacturing, a critical defense sector. 5. The contract's fixed-price nature aims to control costs for the government. 6. The geographic location of the contractor in Ohio may have local economic implications.
Value Assessment
Rating: good
The contract value of $22.5 million for ammunition components appears reasonable given the long duration and the nature of defense manufacturing. Benchmarking against similar contracts for ammunition components is challenging without more specific data on the exact components and quantities. However, the firm fixed-price structure suggests an effort to ensure cost predictability for the government over the contract's lifespan.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 6 bids suggests a healthy level of interest and competition for this defense requirement. This competitive environment is generally favorable for price discovery and potentially securing better terms for the government.
Taxpayer Impact: Full and open competition typically leads to more competitive pricing, which is beneficial for taxpayers by ensuring the government is not overpaying for essential defense materials.
Public Impact
The U.S. Army benefits from a reliable supply of critical ammunition components. The contract supports the manufacturing sector, specifically in the production of defense-related goods. The workforce in Ohio, where KDI Precision Products Inc. is located, may see employment benefits. National security is enhanced through the sustained availability of ammunition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to potential cost overruns if not managed effectively.
- Reliance on a single primary manufacturer (KDI Precision Products Inc.) could pose supply chain risks if not diversified.
- The specific nature of 'ammunition components' requires careful quality control to ensure operational effectiveness and safety.
Positive Signals
- Awarded under full and open competition, indicating a robust bidding process.
- Firm fixed-price contract type helps in managing budget predictability.
- The contract supports a critical defense need, ensuring readiness.
Sector Analysis
This contract falls within the broader defense manufacturing sector, specifically focusing on ammunition production. The market for defense components is often characterized by long-term relationships, specialized manufacturing capabilities, and significant government investment. Comparable spending benchmarks would typically be found within the Department of Defense's overall budget for ordnance and munitions, which runs into billions of dollars annually.
Small Business Impact
The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this specific award, though the prime contractor may engage small businesses in their supply chain.
Oversight & Accountability
The contract is subject to standard Department of Defense oversight mechanisms for procurement and contract management. Accountability is maintained through contract performance monitoring, financial audits, and adherence to the terms of the firm fixed-price agreement. Transparency is generally provided through contract databases like FPDS, though specific performance details may be sensitive.
Related Government Programs
- Ordnance and Ammunition Procurement
- Department of Defense Manufacturing Contracts
- Industrial Operations Support
- Defense Supply Chain Management
Risk Flags
- Long contract duration may increase risk of cost escalation or obsolescence.
- Potential supply chain vulnerabilities if contractor or key suppliers face issues.
- Need for stringent quality control to ensure component reliability for munitions.
Tags
defense, department-of-defense, department-of-the-army, ammunition, manufacturing, firm-fixed-price, full-and-open-competition, definitive-contract, ohio, kdi-precision-products-inc, ordnance, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.5 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC.. 200512!001988!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05C0069 !A!N! !N! ! !20050919!20090607!041603077!041603077!008898843!N!KDI PRECISION PRODUCTS INC !3975 MCMANN RD !CINCINNATI !OH!45245!15000!061!39!CINCINNATI !HAMILTON !OHIO !+000017083960!N!N!000000000000!1325!BOMBS !A6 !AMMUNITION !000 !* !332993!E! !3! ! ! ! ! !202
Who is the contractor on this award?
The obligated recipient is L3HARRIS FUZING AND ORDNANCE 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 $22.5 million.
What is the period of performance?
Start: 2005-09-19. End: 2012-12-31.
What is the historical spending pattern for ammunition components by the Department of the Army?
Historical spending on ammunition components by the Department of the Army has been substantial and consistent, reflecting the ongoing need for munitions in training and operational readiness. While specific figures for 'components' are difficult to isolate without detailed line-item analysis, the Army's overall budget for procurement, including ammunition, typically runs into billions of dollars annually. Trends are influenced by global security environments, modernization efforts, and inventory management strategies. Analyzing past awards for similar National Stock Numbers (NSNs) or Product Service Codes (PSCs) can reveal patterns of spending, average contract values, and the number of competitors over time. For instance, periods of increased geopolitical tension often correlate with higher spending on munitions and their constituent parts.
How does the per-unit cost of these ammunition components compare to market rates or similar contracts?
Determining the precise per-unit cost for these ammunition components is not feasible with the provided data, as it lacks specific quantity details and unit breakdowns. The total award of $22.5 million over a period of approximately 8 years (2660 days) suggests an average annual value of roughly $2.8 million. To benchmark per-unit costs, one would need to know the exact item being procured (e.g., specific fuses, casings, propellants), the quantities ordered, and the quality specifications. Without this granular information, comparing to market rates or similar contracts is speculative. However, the firm fixed-price nature of the contract implies that the contractor has assessed market rates and production costs to arrive at a price that is profitable for them while being acceptable to the government.
What is the track record of KDI Precision Products Inc. in fulfilling defense contracts, particularly for ammunition?
KDI Precision Products Inc. has a history of supplying defense components, including items related to ordnance and ammunition. Their track record can be assessed by reviewing past contract awards, performance evaluations (if publicly available), and any history of contract disputes or terminations. Companies in this sector often specialize in precision manufacturing for demanding applications. A review of their contract history would reveal the types of items they have produced, the agencies they have served, and the scale of their previous awards. Positive performance indicators would include successful completion of prior contracts, adherence to delivery schedules, and meeting stringent quality standards required for military hardware. Conversely, any past issues with performance, quality, or delivery would be a concern.
What are the potential risks associated with a long-duration contract for ammunition components?
Long-duration contracts for ammunition components, like this 8-year award, carry several potential risks. Firstly, there's the risk of cost escalation if raw material prices or labor costs increase significantly over the contract period, although the firm fixed-price structure aims to mitigate this for the government. Secondly, technological obsolescence is a concern; newer, more advanced ammunition systems could emerge, potentially making the components procured under this contract less relevant or requiring costly modifications. Thirdly, supply chain disruptions, whether due to geopolitical events, natural disasters, or the financial stability of the contractor or its suppliers, can impact delivery schedules. Finally, maintaining consistent quality and performance standards over such an extended period requires robust quality assurance processes from both the contractor and the government.
How does this contract contribute to the overall readiness and modernization goals of the U.S. Army?
This contract directly supports the U.S. Army's readiness goals by ensuring a steady supply of essential components for ammunition. Ammunition is a consumable resource critical for training, deployment, and sustained operations. By securing these components through a long-term contract, the Army can maintain adequate inventory levels and avoid potential shortages. Regarding modernization, the contract's focus on specific components implies support for existing or near-term ammunition systems. If these components are part of upgraded or next-generation munitions, the contract would also contribute to modernization efforts. However, the specific nature of the components would determine the extent of their role in advanced weapon systems.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)
Address: 3975 MCMANN RD, CINCINNATI, OH, 45245
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2005-09-19
Current End Date: 2012-12-31
Potential End Date: 2012-12-31 00:00:00
Last Modified: 2016-05-02
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