DoD Awards $80M Firm Fixed Price Contract for 81mm/120mm Prop Charges to American Ordnance
Contract Overview
Contract Amount: $80,212,696 ($80.2M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2009-07-10
End Date: 2014-08-31
Contract Duration: 1,878 days
Daily Burn Rate: $42.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THIS CONTRACTS AWARDS A FIRM FIXED PRICE, BASE PLUS FOUR OPTION PERIODS CONTRACT TO AMERICAN ORDNANCE, LLC FOR THE PRODUCTION OF VARIOUS 81MM/120MM PROP CHARGES.
Place of Performance
Location: MIDDLETOWN, DES MOINES County, IOWA, 52638
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $80.2 million to AMERICAN ORDNANCE LLC for work described as: THIS CONTRACTS AWARDS A FIRM FIXED PRICE, BASE PLUS FOUR OPTION PERIODS CONTRACT TO AMERICAN ORDNANCE, LLC FOR THE PRODUCTION OF VARIOUS 81MM/120MM PROP CHARGES. Key points: 1. Contract awarded to American Ordnance, LLC for prop charges. 2. Firm Fixed Price contract with four option periods. 3. Competition method was 'Full and Open Competition After Exclusion of Sources'. 4. Sector is Ammunition Manufacturing, a key defense industrial base component.
Value Assessment
Rating: good
The contract value of $80.2 million over approximately 5 years appears reasonable for specialized ammunition components. Benchmarking against similar prop charge contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The competition method 'Full and Open Competition After Exclusion of Sources' suggests a limited competition, potentially impacting price discovery. Further details on the exclusion rationale are needed.
Taxpayer Impact: Taxpayer funds are being used for essential defense materiel. The effectiveness of the limited competition in securing the best value for taxpayers requires further scrutiny.
Public Impact
Ensures supply of critical ammunition components for military operations. Supports a domestic manufacturer, contributing to the defense industrial base. Potential for price increases due to limited competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may not yield the lowest price.
- Contract duration and option periods require careful management.
Positive Signals
- Firm Fixed Price contract provides cost certainty.
- Award to established domestic manufacturer.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically ammunition production. Spending in this area is critical for national security, with benchmarks often tied to military readiness requirements and production costs of specialized components.
Small Business Impact
The contract was not awarded to a small business. Analysis of subcontracting opportunities for small businesses within this award is not provided in the data.
Oversight & Accountability
Oversight would focus on contract performance, adherence to specifications, and the justification for the limited competition. The Department of the Army is responsible for managing this contract.
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.
- Lack of transparency in source exclusion.
- Potential for vendor lock-in.
- No small business subcontracting information provided.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ia, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $80.2 million to AMERICAN ORDNANCE LLC. THIS CONTRACTS AWARDS A FIRM FIXED PRICE, BASE PLUS FOUR OPTION PERIODS CONTRACT TO AMERICAN ORDNANCE, LLC FOR THE PRODUCTION OF VARIOUS 81MM/120MM PROP CHARGES.
Who is the contractor on this award?
The obligated recipient is AMERICAN ORDNANCE 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 $80.2 million.
What is the period of performance?
Start: 2009-07-10. End: 2014-08-31.
What was the specific justification for excluding other sources in the 'Full and Open Competition After Exclusion of Sources' method, and how did this impact the final price?
The justification for excluding other sources is crucial for understanding the competitive landscape and its effect on pricing. If the exclusion was based on unique capabilities or proprietary technology, it might explain a higher price. Conversely, if the exclusion was less justified, it could indicate a missed opportunity for better value. A thorough review of the source selection documentation is needed.
How does the per-unit cost of these prop charges compare to industry benchmarks or historical pricing for similar components, considering the firm fixed price structure?
Comparing the per-unit cost against industry benchmarks and historical data is essential for assessing value. A firm fixed price contract offers cost certainty, but without comparative data, it's difficult to determine if the negotiated price represents a fair market value. Analysis should consider material costs, manufacturing complexity, and profit margins typical for this defense sub-sector.
What are the long-term strategic implications of awarding this contract to a single supplier, particularly regarding supply chain resilience and future innovation in prop charge technology?
Awarding to a single supplier, even with limited competition, raises questions about long-term supply chain resilience and potential stifling of innovation. Dependence on one entity can create vulnerabilities. Future contracts should explore opportunities to broaden the supplier base or incentivize technological advancements to ensure sustained capability and competitive pricing.
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: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W52P1J08R0080
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 01
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $80,212,696
Exercised Options: $80,212,696
Current Obligation: $80,212,696
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2009-07-10
Current End Date: 2014-08-31
Potential End Date: 2014-08-31 00:00:00
Last Modified: 2014-09-05
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