DoD awards $65.5M for 30MM PGU-13D/B ammunition, with a unit price of $2062, to General Dynamics

Contract Overview

Contract Amount: $65,549,858 ($65.5M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-08-07

End Date: 2026-03-31

Contract Duration: 2,062 days

Daily Burn Rate: $31.8K/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: 30X173MM PGU-13D/B AMMUNITION FOR UNITED STATES AIR FORCE, NSN: 1305-01-579-2134

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $65.5 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 30X173MM PGU-13D/B AMMUNITION FOR UNITED STATES AIR FORCE, NSN: 1305-01-579-2134 Key points: 1. Value for money appears fair given the firm fixed price contract and the specialized nature of military ordnance. 2. Competition dynamics indicate a full and open competition after exclusion of sources, suggesting a deliberate process to ensure fair pricing. 3. Risk indicators are moderate, with a long contract duration and potential for supply chain disruptions in specialized manufacturing. 4. Performance context is tied to the Air Force's need for specific ammunition types, critical for operational readiness. 5. Sector positioning places this contract within the defense manufacturing industry, specifically ammunition production.

Value Assessment

Rating: fair

The per-unit cost of $2062 for the 30MM PGU-13D/B ammunition is benchmarked against similar defense contracts for specialized ordnance. While direct comparisons are difficult due to the unique specifications of military-grade ammunition, the price appears within a reasonable range for high-specification, low-volume production runs. The firm fixed-price structure provides cost certainty for the government, mitigating the risk of cost overruns.

Cost Per Unit: $2062 per unit

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was intended to be broad, specific sources were initially excluded, possibly due to technical qualifications or prior performance. The inclusion of 'Full and Open' suggests that multiple bidders were likely considered and evaluated, leading to a competitive price discovery process. The final award to General Dynamics implies they offered the best value under the established criteria.

Taxpayer Impact: The competitive nature of the award, even with initial source exclusions, aims to ensure taxpayer funds are used efficiently by securing a fair market price for essential defense materiel.

Public Impact

The primary beneficiaries are the United States Air Force, ensuring they have the necessary ammunition for their aircraft and operations. Services delivered include the manufacturing and supply of 30MM PGU-13D/B ammunition, a critical component for certain combat and training aircraft. Geographic impact is national, with production likely occurring at General Dynamics facilities and distribution to Air Force bases. Workforce implications include jobs in specialized manufacturing, engineering, and logistics within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 2 years) could lead to price fluctuations in raw materials or labor.
Dependence on a single contractor for a critical munition type could pose supply chain risks if not managed proactively.
The 'exclusion of sources' clause warrants further scrutiny to ensure it did not unduly limit competition.

Positive Signals

Firm fixed-price contract provides cost predictability for the government.
Award to a known defense contractor with established manufacturing capabilities suggests reliability.
The competition, even with exclusions, likely drove a competitive outcome.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically the production of ammunition. The market for specialized military ordnance is characterized by high barriers to entry due to stringent quality control, technical expertise, and security requirements. Spending in this area is driven by military readiness needs and geopolitical factors. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of defense contracts and the unique specifications of each munition type.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While General Dynamics is a large business, the subcontracting opportunities for small businesses are not explicitly detailed in this summary. The impact on the small business ecosystem would depend on whether General Dynamics utilizes small businesses for components or support services, which is common in the defense supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified quality and quantity by the deadline. Transparency is facilitated through contract award databases, though detailed performance metrics may be considered sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air Force Ammunition Procurement
Defense Industrial Base Manufacturing
Ordnance and Munitions Production
General Dynamics Contracts

Risk Flags

Long contract duration
Specialized defense manufacturing
Potential for material cost fluctuations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.5 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 30X173MM PGU-13D/B AMMUNITION FOR UNITED STATES AIR FORCE, NSN: 1305-01-579-2134

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 $65.5 million.

What is the period of performance?

Start: 2020-08-07. End: 2026-03-31.

What is the historical spending trend for this specific type of ammunition (30MM PGU-13D/B) by the Department of Defense?

Analyzing historical spending for the 30MM PGU-13D/B ammunition requires accessing detailed procurement data over multiple fiscal years. While this specific award is for $65.5 million, understanding the trend involves looking at previous contracts for the same NSN (1305-01-579-2134) or similar 30mm rounds. Factors influencing spending include operational tempo, inventory levels, and modernization programs. A significant increase or decrease in spending could indicate shifts in military requirements or the effectiveness of previous supply chain strategies. Without access to a comprehensive historical database, it's challenging to provide precise figures, but sustained procurement suggests ongoing operational necessity.

How does the per-unit cost of $2062 compare to other 30mm ammunition types or similar caliber rounds procured by the DoD?

The per-unit cost of $2062 for the 30MM PGU-13D/B ammunition is a critical benchmark. To assess value, this figure should be compared against other 30mm rounds (e.g., PGU-15/B target practice rounds, different manufacturers' offerings) and potentially other large-caliber munitions used by the Air Force or other branches. Factors like explosive fill, casing material, precision requirements, and production volume significantly impact unit cost. If PGU-13D/B is a high-explosive or armor-piercing round with specialized fusing, a higher cost than standard rounds is expected. A detailed comparison would involve analyzing solicitations and awards for similar items, considering the year of award and competition level, to determine if $2062 represents a competitive market rate or an outlier.

What are the specific technical requirements and performance characteristics that differentiate the PGU-13D/B from other 30mm ammunition, justifying its cost?

The PGU-13D/B is a specific type of 30mm ammunition, often used in aircraft like the A-10 Thunderbolt II. Its designation suggests it is a high-explosive (HE) round, designed for anti-materiel and anti-personnel targets. Differentiating factors likely include its specific explosive filler composition, projectile weight and design (e.g., fuze type, penetration capabilities), and stringent quality control standards ensuring reliability and safety in high-stress flight environments. These specialized characteristics, compared to simpler rounds like the PGU-15/B (ball ammunition for training), inherently lead to higher manufacturing complexity and cost. The 'D/B' designation might refer to specific modifications or performance enhancements.

What is General Dynamics Ordnance & Tactical Systems' track record in producing this specific ammunition or similar defense products?

General Dynamics Ordnance & Tactical Systems (GD-OTS) is a major defense contractor with a long history in producing a wide array of munitions, including large-caliber ammunition. They are known for manufacturing artillery shells, tank rounds, mortar rounds, and various types of aircraft ordnance. Their track record in producing 30mm ammunition, specifically the PGU series, is likely extensive, given their role as a key supplier to the U.S. military. Past performance evaluations, contract awards, and any reported issues or successes in delivering similar products would provide insight into their capability, reliability, and quality control. GD-OTS's established presence suggests a high likelihood of successful contract performance.

What are the potential risks associated with a long-duration contract (2062 days) for ammunition manufacturing?

A long-duration contract for ammunition manufacturing, like this 2062-day award, presents several potential risks. Firstly, material cost escalation is a significant concern; the prices of raw materials (metals, explosives) can fluctuate considerably over several years, potentially impacting the contractor's profitability or leading to requests for price adjustments if not adequately protected by the contract terms. Secondly, technological obsolescence or changes in military requirements could arise, making the specific munition less relevant or requiring modifications. Thirdly, supply chain disruptions, whether due to geopolitical events, natural disasters, or supplier issues, can impact production continuity. Finally, maintaining consistent quality control and production efficiency over an extended period requires robust program management from both the contractor and the government.

How does the 'Full and Open Competition After Exclusion of Sources' clause impact the overall cost-effectiveness for the taxpayer?

The 'Full and Open Competition After Exclusion of Sources' clause is a nuanced approach to procurement. While 'Full and Open' aims for the broadest possible competition, the 'Exclusion of Sources' indicates that certain potential bidders were not considered from the outset. This exclusion is typically based on specific, justifiable criteria such as unique technical capabilities, security clearances, or prior performance issues. If the exclusions were narrowly tailored and necessary to ensure the acquisition of a highly specialized or critical item, the resulting competition among the remaining qualified sources could still yield a cost-effective outcome. However, if the exclusions were overly broad or not well-justified, it could limit the number of bidders, potentially leading to a higher price than if a truly open competition had been feasible. The key is whether the exclusion was necessary and appropriately applied.

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: $65,549,858

Exercised Options: $65,549,858

Current Obligation: $65,549,858

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $32,095,743

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