DoD's $170M Ordnance Contract with Alliant Techsystems Raises Questions on Competition and Value
Contract Overview
Contract Amount: $169,658,465 ($169.7M)
Contractor: Alliant Techsystems Operations LLC
Awarding Agency: Department of Defense
Start Date: 2011-03-24
End Date: 2019-01-25
Contract Duration: 2,864 days
Daily Burn Rate: $59.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING AND MANUFACTURING DEVELOPMENT
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442
Plain-Language Summary
Department of Defense obligated $169.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: ENGINEERING AND MANUFACTURING DEVELOPMENT Key points: 1. Significant spending on ordnance manufacturing highlights a key defense sector. 2. The sole-source nature of this contract warrants scrutiny regarding price discovery. 3. Alliant Techsystems, a major defense contractor, is the sole awardee. 4. The contract's long duration and cost-plus structure may increase risk. 5. Lack of small business participation is noted.
Value Assessment
Rating: questionable
The contract's cost-plus fixed fee structure, coupled with a lack of competition, makes a direct pricing assessment difficult. Without benchmarks from competitive bids, it's hard to determine if $169.6M represents fair value for the ordnance and accessories manufactured.
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 potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The absence of competition likely resulted in a higher cost to taxpayers than if the contract had been awarded through a competitive process.
Public Impact
Taxpayers may have overpaid due to the lack of competitive bidding. The long contract duration (2011-2019) means sustained potential for inflated costs. Dependence on a single contractor for critical ordnance could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- No small business participation
Positive Signals
- Awarded to a known defense manufacturer
- Supports Department of the Army needs
Sector Analysis
This contract falls within the 'Other Ordnance and Accessories Manufacturing' sector, a critical component of defense spending. Benchmarks for similar sole-source ordnance contracts are difficult to establish due to the nature of such awards.
Small Business Impact
The contract data indicates that small businesses were not involved in this award, either as prime contractors or potentially as subcontractors. This represents a missed opportunity for small business engagement in defense manufacturing.
Oversight & Accountability
The sole-source nature of this contract suggests potential weaknesses in the procurement process oversight. Further review is needed to understand why competition was precluded and if adequate justification was documented.
Related Government Programs
- Other Ordnance and Accessories Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
- No small business participation
- Long contract duration
Tags
other-ordnance-and-accessories-manufactu, department-of-defense, mn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $169.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. ENGINEERING AND MANUFACTURING DEVELOPMENT
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 $169.7 million.
What is the period of performance?
Start: 2011-03-24. End: 2019-01-25.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are justified by factors such as urgency, unique capabilities, or lack of available sources. Without this information, it's impossible to assess if alternative competitive strategies were adequately explored or if this was the only viable option.
How does the final cost compare to initial estimates, and what cost controls were in place for this cost-plus fixed fee contract?
The data does not provide initial estimates or final cost comparisons. Cost-plus fixed fee contracts aim to control costs by setting a fixed fee for the contractor's profit, but the 'cost' portion can still escalate. The effectiveness of cost controls would depend on detailed oversight and reporting mechanisms not visible in this summary data.
What specific ordnance and accessories were produced under this contract, and are they considered critical or unique capabilities?
The specific items produced are categorized under 'Other Ordnance and Accessories Manufacturing' (NAICS 332995). The data does not detail the exact products. Determining if these are critical or unique capabilities would require further investigation into the Army's specific requirements and the market availability of such items.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Other Ordnance and Accessories Manufacturing
Product/Service Code: WEAPONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W91CRB10R0052
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)
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: $169,658,465
Exercised Options: $169,658,465
Current Obligation: $169,658,465
Subaward Activity
Number of Subawards: 97
Total Subaward Amount: $66,458,178
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-03-24
Current End Date: 2019-01-25
Potential End Date: 2019-01-25 00:00:00
Last Modified: 2018-07-02
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