Alliant Techsystems Operations LLC awarded $69M for medium caliber ammunition, with 2 bidders in a competitive process

Contract Overview

Contract Amount: $68,963,287 ($69.0M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2018-09-24

End Date: 2022-08-31

Contract Duration: 1,437 days

Daily Burn Rate: $48.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MEDIUM CALIBER AMMUNITION

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24143

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $69.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: MEDIUM CALIBER AMMUNITION Key points: 1. The contract value of $69 million for medium caliber ammunition represents a significant investment in defense readiness. 2. Competition dynamics indicate a healthy market for ammunition manufacturing, with multiple capable suppliers. 3. The contract's duration and scope suggest a sustained need for these critical munitions. 4. Performance context is crucial for ensuring the reliability and effectiveness of ammunition in operational settings. 5. This contract positions the Department of the Army as a key consumer within the defense industrial base for ammunition.

Value Assessment

Rating: good

Benchmarking the value of this contract requires detailed analysis of per-unit costs for medium caliber ammunition, which can fluctuate based on material costs and specific technical requirements. However, the presence of multiple bidders in a full and open competition suggests that pricing was likely subject to market pressures, potentially leading to a fair value. Comparing this to historical awards for similar ammunition types and quantities would provide a more precise assessment of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition after exclusion of sources' mechanism, indicating that while the initial pool of potential contractors might have been narrowed, the final award was made through a competitive process. With two bidders participating, the competition level suggests a reasonable degree of market engagement, allowing for price discovery and selection of the most advantageous offer.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers as it likely drove down prices compared to a sole-source or limited competition scenario, ensuring more efficient use of public funds for essential defense materiel.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will be supplied with essential medium caliber ammunition for training and operational readiness. The services delivered include the manufacturing and supply of critical ammunition components, ensuring the availability of necessary munitions. The geographic impact is primarily within the United States, supporting domestic defense manufacturing capabilities. Workforce implications include the potential for job creation and retention within the defense manufacturing sector, particularly at Alliant Techsystems Operations LLC and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a limited number of large prime contractors for critical defense supplies.
Ensuring consistent quality control and adherence to stringent military specifications for ammunition.

Positive Signals

Demonstrated ability to compete and win significant defense contracts.
Established track record in manufacturing ammunition for military applications.
Operating within a competitive landscape that encourages efficiency and innovation.

Sector Analysis

The defense industrial base for ammunition manufacturing is a critical component of national security. This contract falls within the broader sector of defense manufacturing, specifically focusing on ordnance and ammunition. The market is characterized by a few large, specialized companies capable of meeting the stringent requirements of military specifications. Spending benchmarks for similar ammunition contracts can vary widely based on caliber, quantity, and specific technological advancements.

Small Business Impact

While this specific contract was awarded to a large business (Alliant Techsystems Operations LLC) and does not appear to have a small business set-aside component, the defense industrial ecosystem often relies on a robust network of small business subcontractors for specialized components and services. The prime contractor's subcontracting plan will be crucial in determining the extent of small business participation and its impact on the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Army's contracting and program management offices, with potential involvement from the Defense Contract Management Agency (DCMA) for quality assurance and delivery monitoring. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Army Combat Vehicle Ammunition
Medium Caliber Munitions
Defense Industrial Base Manufacturing

Risk Flags

Potential supply chain vulnerabilities
Dependence on specific raw materials
Long-term sustainment of production capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. MEDIUM CALIBER AMMUNITION

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 $69.0 million.

What is the period of performance?

Start: 2018-09-24. End: 2022-08-31.

What is the historical spending trend for medium caliber ammunition by the Department of the Army over the last five fiscal years?

Analyzing historical spending trends for medium caliber ammunition by the Department of the Army over the last five fiscal years would reveal patterns of demand, potential fluctuations due to operational tempo or inventory management strategies, and the average contract values awarded. This data is crucial for understanding the sustained need for such munitions and for forecasting future budgetary requirements. Without specific historical data readily available for this analysis, it's challenging to provide precise figures. However, generally, the Army maintains consistent, significant investment in ammunition to ensure readiness, with spending often influenced by global security postures and modernization efforts. Examining annual reports from the Department of the Army or defense budget documents would be necessary to compile this specific trend data.

How does the per-unit cost of this contract compare to other recent awards for similar medium caliber ammunition?

A direct comparison of the per-unit cost for this $69 million contract with other recent awards for similar medium caliber ammunition is essential for assessing value for money. This requires access to detailed pricing data from comparable contracts, which is often not publicly disclosed in full. Factors such as the specific caliber, lot size, material costs at the time of award, and contractual terms (e.g., fixed-price vs. cost-plus) significantly influence per-unit pricing. If this contract was awarded through full and open competition with multiple bidders, it suggests that the pricing was likely competitive. However, without access to specific unit cost breakdowns and comparable contract data, a definitive benchmark cannot be established. Further analysis would involve querying contract databases for similar items and comparing the awarded prices, adjusting for any known differences in specifications or quantities.

What are the key performance indicators (KPIs) used to evaluate Alliant Techsystems Operations LLC's performance on this contract?

Key Performance Indicators (KPIs) for a medium caliber ammunition supply contract typically focus on ensuring the timely delivery of high-quality products that meet stringent military specifications. Common KPIs would likely include on-time delivery rates, defect rates (i.e., the percentage of ammunition failing quality inspections), adherence to production schedules, and compliance with safety and environmental regulations during manufacturing. The contract itself would outline specific performance standards and metrics. The Department of the Army would monitor these KPIs throughout the contract's duration, with potential for performance incentives or penalties tied to meeting or failing to meet these targets. Regular performance reviews and quality assurance checks are standard procedures to ensure the contractor's accountability.

What is the potential impact of geopolitical events on the demand and pricing of medium caliber ammunition?

Geopolitical events can significantly impact the demand and pricing of medium caliber ammunition. Increased global tensions, conflicts, or heightened national security concerns often lead to an surge in demand as military forces prioritize readiness and replenish stockpiles. This increased demand, especially when coupled with potential supply chain disruptions caused by geopolitical instability, can drive up raw material costs and manufacturing expenses. Consequently, prices for ammunition may rise. Furthermore, government defense budgets are often reallocated or increased in response to geopolitical shifts, influencing the volume and value of contracts awarded. Conversely, periods of relative global stability might see a decrease in demand and potentially more competitive pricing.

How does the 'full and open competition after exclusion of sources' contracting method differ from standard full and open competition?

The 'full and open competition after exclusion of sources' (FOUC E S) contracting method is a variation of full and open competition designed to ensure broad market participation while addressing specific circumstances. In standard full and open competition, all responsible sources are permitted to submit offers without restriction. However, FOUC E S is used when an agency initially identifies potential sources but then decides to open the competition more broadly, ensuring that no responsible source is excluded from the opportunity to compete. This might occur if, after an initial limited solicitation or market research, the agency determines that a wider range of contractors could potentially meet the requirement. The key difference lies in the initial phase; FOUC E S implies a deliberate decision to broaden participation beyond an initially identified set, while standard full and open competition starts with the broadest possible solicitation from the outset. Both methods aim for maximum competition and best value.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

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: $68,963,287

Exercised Options: $68,963,287

Current Obligation: $68,963,287

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J18D0092

IDV Type: IDC

Timeline