Army awards $25.5M contract for M58A4 Mine Clearing Line Charge to American Ordnance LLC
Contract Overview
Contract Amount: $25,468,557 ($25.5M)
Contractor: American Ordnance LLC
Awarding Agency: Department of Defense
Start Date: 2018-09-25
End Date: 2021-09-30
Contract Duration: 1,101 days
Daily Burn Rate: $23.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: SUPPLY CONTRACT - M58A4 MINE CLEARING LINE CHARGE.
Place of Performance
Location: MIDDLETOWN, DES MOINES County, IOWA, 52638
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $25.5 million to AMERICAN ORDNANCE LLC for work described as: SUPPLY CONTRACT - M58A4 MINE CLEARING LINE CHARGE. Key points: 1. Contract awarded for specialized ordnance used in mine clearing operations. 2. Sole-source award to American Ordnance LLC, a key defense contractor. 3. Potential for higher costs due to lack of competition. 4. Spending falls within the Ammunition Manufacturing sector.
Value Assessment
Rating: fair
The contract value of $25.5 million for ammunition manufacturing appears reasonable for specialized ordnance. However, without competitive bidding, it's difficult to definitively assess if this represents the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to American Ordnance LLC. This limits price discovery and may result in less favorable terms for the government compared to a competitive process.
Taxpayer Impact: The lack of competition could lead to taxpayers paying a premium for this essential military equipment.
Public Impact
Ensures availability of critical mine-clearing equipment for military operations. Supports a specific defense contractor, potentially impacting industry capacity. Highlights reliance on specialized manufacturers for niche defense products.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Contract duration is substantial, increasing exposure to potential cost overruns.
- No indication of small business participation.
Positive Signals
- Addresses a critical military need for mine clearing.
- Awarded to a known entity within the defense industrial base.
Sector Analysis
This contract falls under the Ammunition (except Small Arms) Manufacturing sector. Spending benchmarks for similar specialized ordnance can vary significantly based on quantity, complexity, and specific threat requirements.
Small Business Impact
There is no indication of small business participation in this contract. The award was made directly to American Ordnance LLC, suggesting a focus on established prime contractors rather than subcontracting opportunities for smaller firms.
Oversight & Accountability
The contract was awarded by the Department of the Army. Oversight would typically involve contract management teams ensuring delivery schedules, quality standards, and adherence to the firm fixed price terms.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of transparency in pricing
- Potential for supply chain disruption
- No small business participation noted
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, ia, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.5 million to AMERICAN ORDNANCE LLC. SUPPLY CONTRACT - M58A4 MINE CLEARING LINE CHARGE.
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 $25.5 million.
What is the period of performance?
Start: 2018-09-25. End: 2021-09-30.
What is the justification for the sole-source award, and how does it align with DoD's competition goals?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For the DoD, while competition is preferred, sole-source awards are sometimes necessary. The alignment with competition goals would depend on whether this was a last resort due to specific circumstances or a recurring practice for this type of munition.
How does the unit cost of the M58A4 Mine Clearing Line Charge compare to similar historical or alternative systems?
Without access to specific unit cost data or benchmarks for comparable mine-clearing systems, a direct comparison is difficult. The $25.5 million total award over a multi-year period suggests a significant quantity. A thorough analysis would require comparing the price per charge against other available technologies or previous procurements of similar capabilities, considering factors like effectiveness and operational lifespan.
What are the long-term implications for military readiness if only one supplier can produce this critical ordnance?
A sole-source dependency for critical ordnance like the M58A4 poses a significant risk to long-term military readiness. It creates a vulnerability if the sole supplier faces production issues, financial instability, or geopolitical disruptions. Diversifying the supply chain or developing alternative technologies would be crucial to mitigate this risk and ensure consistent availability during potential conflicts or extended operational demands.
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: W52P1J17R0096
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: DAY & Zimmermann Group Inc., the
Address: 17575 HIGHWAY 79, MIDDLETOWN, IA, 52638
Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,468,557
Exercised Options: $25,468,557
Current Obligation: $25,468,557
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-09-25
Current End Date: 2021-09-30
Potential End Date: 2021-09-30 12:09:00
Last Modified: 2023-02-04
More Contracts from American Ordnance LLC
- M795 TNT - Award of FY16 Requirements — $269.7M (Department of Defense)
- M795 TNT 155MM HE Projectiles - FY20 Requirements Awarded — $229.3M (Department of Defense)
- Ukraine: Multi-Year, UCA Delivery Order for M1128 LAP Projectiles — $192.6M (Department of Defense)
- Order W519tc25f0357 IS for the Contractor to Load, Assemble, and Pack a Quantity of 388,436 155MM M795 TNT Loaded Projectiles — $188.1M (Department of Defense)
- Order W519tc24f0399 IS for the Contractor to Load, Assemble, and Pack a Quantity of 346,478 155MM M795 TNT Loaded Projectiles — $151.2M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)