DoD's $211M Ammunition Contract with Alliant Techsystems Raises Concerns Over Competition and Value

Contract Overview

Contract Amount: $211,393,583 ($211.4M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2012-03-29

End Date: 2022-03-09

Contract Duration: 3,632 days

Daily Burn Rate: $58.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M865 REFURB M1002 FY 12 120MM BASE YEAR

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $211.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: M865 REFURB M1002 FY 12 120MM BASE YEAR Key points: 1. The contract awarded to Alliant Techsystems Operations LLC for ammunition manufacturing represents a significant expenditure. 2. Lack of competition is a major red flag, potentially leading to inflated prices and reduced innovation. 3. The long duration and firm fixed-price structure warrant scrutiny for cost control and performance. 4. The sector is critical for defense readiness, but efficient spending is paramount.

Value Assessment

Rating: questionable

The contract's value of over $211 million is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar contracts, raising questions about whether the government received the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and negotiation leverage for the government, potentially resulting in higher costs than if multiple vendors had bid.

Taxpayer Impact: The lack of competition means taxpayers may be overpaying for ammunition, diverting funds that could be used for other critical defense needs or public services.

Public Impact

Taxpayers may be footing a higher bill due to the absence of competitive bidding. The long contract duration (2012-2022) suggests a sustained, significant investment in this specific supplier. Dependence on a single supplier for critical ammunition could pose a supply chain risk. The specific nature of the ammunition (120mm) points to specialized military applications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
High contract value

Positive Signals

Definitive contract type
Firm fixed price contract

Sector Analysis

The defense sector relies heavily on specialized manufacturing for munitions. Spending benchmarks in this area are often influenced by geopolitical factors and technological advancements, but competitive procurement is key to cost efficiency.

Small Business Impact

The contract was awarded to Alliant Techsystems Operations LLC, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, missing an opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential cost overruns. Accountability mechanisms should be robust given the significant taxpayer investment.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Long contract duration without re-competition
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $211.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. M865 REFURB M1002 FY 12 120MM BASE YEAR

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 $211.4 million.

What is the period of performance?

Start: 2012-03-29. End: 2022-03-09.

What was the justification for awarding this contract on a sole-source basis rather than seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of adequate competition. Without further documentation, it's impossible to determine the specific rationale. However, such awards necessitate rigorous justification to ensure they serve the government's best interest and do not simply circumvent competitive processes.

How does the unit cost of this ammunition compare to similar contracts awarded competitively?

Direct comparison is challenging without access to specific pricing data from competitive contracts for identical or highly similar 120mm ammunition. However, the absence of competition inherently raises the risk that the unit cost is higher than it would be in a competitive environment. Further analysis would require benchmarking against publicly available data or internal DoD cost estimates.

What measures were in place to ensure the quality and timely delivery of ammunition under this long-term, sole-source contract?

While the contract type is 'firm fixed price,' suggesting cost certainty, oversight is still crucial. Quality assurance clauses, performance metrics, and delivery schedules would typically be included. The long duration implies a need for robust monitoring mechanisms to ensure ongoing compliance and address any potential issues proactively, despite the lack of competitive pressure.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J10R0220

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

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

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

Financial Breakdown

Contract Ceiling: $211,393,583

Exercised Options: $211,393,583

Current Obligation: $211,393,583

Subaward Activity

Number of Subawards: 60

Total Subaward Amount: $62,855,207

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline