DoD awards $96.6M for medium caliber ammunition, with General Dynamics securing the largest share

Contract Overview

Contract Amount: $96,633,386 ($96.6M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-24

End Date: 2025-01-31

Contract Duration: 2,321 days

Daily Burn Rate: $41.6K/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: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $96.6 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: MEDIUM CALIBER AMMUNITION Key points: 1. Value for money appears fair given the firm fixed-price contract type, though detailed cost breakdowns are not public. 2. Competition was limited after exclusion of sources, potentially impacting price discovery and taxpayer value. 3. Risk indicators include contract duration and the specific nature of ordnance, requiring robust oversight. 4. Performance context is tied to ongoing military readiness requirements for ammunition. 5. Sector positioning is within the defense industrial base, specifically ammunition manufacturing.

Value Assessment

Rating: fair

The contract's firm fixed-price nature provides cost certainty for the government. However, without access to detailed cost breakdowns or direct comparisons to similar recent contracts for identical items, a precise value-for-money assessment is challenging. The awarded amount of $96.6 million over its period of performance suggests a significant investment in critical munitions. Benchmarking against market rates for similar caliber ammunition would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the initial solicitation may have been broad, specific criteria or circumstances led to the exclusion of certain potential bidders before the final award. The exact number of bidders considered after exclusions is not specified, but the designation suggests a limited competitive field, which can sometimes lead to higher prices than with broader competition.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price that could have been achieved through a wider bidding process.

Public Impact

The Department of the Army benefits through the acquisition of essential medium caliber ammunition. This contract ensures the supply of ammunition critical for military operations and readiness. The primary geographic impact is likely within the United States, supporting domestic defense manufacturing. Workforce implications include sustained employment at General Dynamics' manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could result in less favorable pricing for the government.
The long contract duration (2018-2025) necessitates ongoing monitoring for performance and cost control.
Reliance on a single primary contractor for a critical defense item carries inherent supply chain risks.

Positive Signals

Firm fixed-price contract type offers cost predictability.
Award to an established defense contractor suggests a degree of confidence in their production capabilities.
The contract supports critical national defense needs, aligning with government objectives.

Sector Analysis

This contract falls within the defense industrial base, specifically the manufacturing of ordnance and ammunition. The market for such specialized defense articles is often characterized by a limited number of qualified suppliers due to high barriers to entry, including technological expertise, capital investment, and stringent regulatory requirements. Spending in this sector is driven by military readiness, geopolitical factors, and modernization programs. Comparable spending benchmarks would typically be found within other large-scale ammunition procurements by various military branches.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem is likely minimal unless General Dynamics voluntarily engages small businesses for components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, linking payment to delivery. Transparency is facilitated through contract award databases, though detailed cost and performance data may be restricted. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Medium Caliber Ammunition Manufacturing
General Dynamics Ordnance & Tactical Systems Contracts
Army Sustainment and Logistics Programs

Risk Flags

Limited competition may lead to higher costs.
Long contract duration requires sustained oversight.
Dependence on a single supplier for critical munitions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.6 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. MEDIUM CALIBER AMMUNITION

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $96.6 million.

What is the period of performance?

Start: 2018-09-24. End: 2025-01-31.

What is the historical spending pattern for medium caliber ammunition by the Department of the Army?

Historical spending on medium caliber ammunition by the Department of the Army has fluctuated based on operational tempo, inventory levels, and modernization initiatives. While specific figures for this exact category over extended periods are not publicly detailed in this dataset, the Army consistently procures significant quantities of various ammunition types to maintain readiness. Major contracts, like the one awarded to General Dynamics, represent substantial portions of this annual spending. Trends often show increased spending during periods of heightened global security concerns or active deployments, and potentially decreased spending during drawdowns or budget austerity. Analyzing past contract awards for similar ammunition types and quantities would reveal trends in pricing, competition, and contractor performance over time.

How does the awarded price compare to industry benchmarks for similar medium caliber ammunition?

A precise comparison to industry benchmarks for this specific medium caliber ammunition is difficult without knowing the exact specifications (e.g., caliber, type of round, explosive filler, range) and the volume purchased under this contract. However, the total award of $96.6 million spread over several years suggests a significant procurement. General Dynamics is a major defense contractor with established production capabilities, which can sometimes lead to economies of scale. The 'limited' competition aspect, however, raises questions about whether the price achieved is truly competitive. To benchmark effectively, one would need to identify comparable contracts awarded to other manufacturers for similar ammunition types and quantities around the same period, considering factors like inflation and specific technical requirements.

What are the key performance indicators (KPIs) for this ammunition contract, and how is performance monitored?

Key performance indicators for an ammunition supply contract typically revolve around delivery timeliness, quality control, and adherence to specifications. For this contract, the Department of the Army would likely monitor metrics such as on-time delivery rates for ordered lots, defect rates discovered during inspection or testing, and compliance with all technical specifications outlined in the contract. Performance monitoring is usually conducted by the Army's contracting officer's representative (COR) or a quality assurance specialist. They would review delivery reports, conduct inspections of manufactured lots, and potentially perform acceptance testing. Failure to meet KPIs could result in penalties, contract modifications, or even termination, depending on the severity and frequency of non-performance.

What is the track record of General Dynamics Ordnance & Tactical Systems, Inc. in fulfilling similar defense contracts?

General Dynamics Ordnance & Tactical Systems, Inc. (GD-OTS) has a long-standing and extensive track record as a major supplier of munitions and ordnance systems to the U.S. military and allied nations. They are known for producing a wide range of ammunition, including medium caliber rounds, artillery shells, and mortar systems. Historically, GD-OTS has been a primary contractor for many significant U.S. defense programs. While specific performance details for every contract are not always public, their continued success in winning large-scale, competitive, and sole-source contracts indicates a generally reliable performance history in terms of production capacity, quality, and delivery. However, like any large contractor, they may have faced specific challenges or scrutiny on particular programs over the years.

What are the potential risks associated with the 'limited' competition designation for this contract?

The 'limited' competition designation, specifically 'Full and Open Competition After Exclusion of Sources,' presents several potential risks. Primarily, it suggests that the pool of potential bidders was restricted, which can reduce the downward pressure on pricing. This means taxpayers might be paying more than they would in a truly open market scenario. Furthermore, limited competition can stifle innovation, as contractors may feel less pressure to offer novel solutions or cost-saving measures if they are one of only a few viable options. It also concentrates the supply chain risk; if the selected contractor faces production issues, there are fewer alternatives readily available to fulfill the requirement, potentially impacting military readiness.

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: Wico Limited

Address: 6658 ROUTE 148, MARION, IL, 62959

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

Financial Breakdown

Contract Ceiling: $96,633,386

Exercised Options: $96,633,386

Current Obligation: $96,633,386

Subaward Activity

Number of Subawards: 54

Total Subaward Amount: $50,162,270

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J18D0093

IDV Type: IDC

Timeline