DoD's $74M small arms ammunition contract awarded to Alliant Techsystems Operations LLC shows fair value with 2 bidders

Contract Overview

Contract Amount: $74,030,683 ($74.0M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2007-03-26

End Date: 2012-09-30

Contract Duration: 2,015 days

Daily Burn Rate: $36.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 25MM M793 AND M910 AND 30MM M788

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $74.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: 25MM M793 AND M910 AND 30MM M788 Key points: 1. The contract's value appears reasonable given the scope of small arms ammunition manufacturing. 2. Full and open competition suggests a dynamic market for this type of defense procurement. 3. The definitive contract structure with a firm fixed price indicates predictable costs for the government. 4. The contract duration of over five years provides long-term supply stability for the Department of the Army. 5. The award to a single entity, Alliant Techsystems, highlights significant consolidation or specialization within this niche. 6. The contract's performance period ending in 2012 provides historical context for current ammunition spending.

Value Assessment

Rating: good

The total award of $74 million over a five-year period for small arms ammunition appears to be within a reasonable range for defense procurement. While specific per-unit cost benchmarks are not provided, the firm fixed-price nature of the contract suggests that the government secured predictable pricing. Comparing this to other large-scale ammunition procurements, the value seems fair, especially considering the competitive bidding process that likely drove down costs. The contract's duration also suggests a commitment to a stable supply chain, which is crucial for military readiness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were invited to bid. The presence of two bidders suggests a moderately competitive environment for this specific type of defense supply. While two bidders are better than one, a higher number of competitors could potentially lead to even more aggressive pricing and innovation. The agency's decision to pursue full and open competition is a positive sign for ensuring a fair market price.

Taxpayer Impact: The full and open competition process likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. It ensures that the Department of the Army explored the market to find the best value.

Public Impact

This contract directly benefits the Department of the Army by ensuring a supply of essential small arms ammunition. The services delivered include the manufacturing of various types of small arms ammunition, critical for training and operational readiness. The geographic impact is primarily national, supporting U.S. military operations, with manufacturing likely occurring at Alliant Techsystems' facilities. Workforce implications include the potential for skilled manufacturing jobs in the defense sector, supporting the ammunition production supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if only a few companies can produce this specialized ammunition.
Reliance on a single contractor for a critical supply could pose risks during geopolitical instability.
The contract's historical nature means current market conditions and pricing may differ significantly.

Positive Signals

Awarded through full and open competition, indicating market availability and vendor interest.
Firm fixed-price contract provides cost certainty for the government.
Long contract duration suggests a stable and reliable supply chain was established.

Sector Analysis

The defense sector for ammunition manufacturing is a specialized niche within the broader industrial base. This contract falls under the 'Small Arms Ammunition Manufacturing' industry code (NAICS 332992). The market is characterized by high barriers to entry due to specialized equipment, stringent quality control, and government security requirements. Spending in this area is driven by military readiness needs, training cycles, and operational deployments. Comparable spending benchmarks would involve analyzing other large-scale ammunition procurements by the DoD or allied nations.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Alliant Techsystems Operations LLC, is a large defense contractor. While there is no direct set-aside, large prime contractors are often encouraged or required to subcontract portions of their work to small businesses. The extent of small business subcontracting would need further investigation to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this definitive contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified ammunition. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or close-out.

Related Government Programs

Department of Defense Ammunition Procurement
Small Arms Ammunition Manufacturing
Defense Industrial Base
Military Readiness Contracts
Alliant Techsystems Contracts

Risk Flags

Contract Duration
Single Source Award (Potentially)
Historical Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. 25MM M793 AND M910 AND 30MM M788

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 $74.0 million.

What is the period of performance?

Start: 2007-03-26. End: 2012-09-30.

What was the specific type and quantity of small arms ammunition procured under this contract?

The provided data indicates the contract covered 'M793 AND M910 AND 30MM M788' ammunition, with a data field 'd':'25MM M793 AND M910 AND 30MM M788'. However, the specific quantities for each type (e.g., number of rounds for 25mm, 30mm) are not detailed in the abbreviated data. The total award value was $74,030,682.89. Further analysis of the full contract documentation would be required to ascertain the precise quantities of each ammunition type.

How does the per-unit cost of this ammunition compare to market rates or similar government contracts?

The provided data does not include specific per-unit cost breakdowns, making a direct comparison to market rates or similar government contracts impossible without further information. The contract type is 'FIRM FIXED PRICE', which suggests the price was negotiated upfront. To assess value, one would need to know the exact quantities and types of ammunition and compare those unit prices to contemporary market data or other DoD contracts for similar munitions. The 'cpu' field is marked 'N/A', reinforcing the lack of specific per-unit cost benchmarking data.

What is Alliant Techsystems Operations LLC's track record with similar ammunition manufacturing contracts?

Alliant Techsystems (now part of Northrop Grumman) has a long history of manufacturing munitions for the U.S. military. They have been a significant supplier of various ammunition types, including small arms and medium-caliber rounds. Their track record generally includes successful production and delivery, though like any large defense contractor, they may have faced performance reviews or contract modifications over time. This specific contract, awarded in 2007 and ending in 2012, represents a period of their established capability in fulfilling large-scale ammunition requirements for the Department of the Army.

What were the key performance indicators (KPIs) or quality standards for this ammunition contract?

While the abbreviated data does not list specific Key Performance Indicators (KPIs) or quality standards, defense contracts for ammunition are typically governed by stringent military specifications (Mil-Specs) and quality assurance provisions. These would include requirements for reliability, accuracy, shelf-life, safety, and precise adherence to caliber and load specifications. The contractor would be expected to meet these standards, and failure to do so could result in contract penalties, rejection of goods, or termination. The 'pt': 'FIRM FIXED PRICE' suggests that meeting these quality standards was a prerequisite for payment.

How has federal spending on small arms ammunition evolved since this contract was awarded?

Federal spending on small arms ammunition has likely fluctuated significantly since this contract, which ended in 2012. Spending is heavily influenced by operational tempo, global security environments, and military modernization programs. Post-2012, conflicts in various regions and increased training demands may have led to surges in ammunition procurement. Conversely, budget constraints or shifts in strategic priorities could lead to periods of reduced spending. Analyzing annual defense budgets and specific ammunition procurement line items would reveal trends in overall spending patterns for this category.

Were there any notable risks or challenges associated with the performance of this contract?

The provided data does not explicitly detail risks or challenges encountered during the performance of this contract. However, general risks in large-scale ammunition manufacturing can include supply chain disruptions for raw materials, manufacturing defects, delays in production, and changes in military requirements. The firm fixed-price nature of the contract places the cost risk primarily on the contractor. Given the contract's duration and the nature of defense procurement, it's plausible that some level of performance monitoring, potential modifications, or issue resolution occurred, but specific details are not available in the summary data.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52P1J05R0047

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 4700 NATHAN LN N, PLYMOUTH, MN, 55442

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

Financial Breakdown

Contract Ceiling: $74,030,683

Exercised Options: $74,030,683

Current Obligation: $74,030,683

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline