Tuesday, March 12, 2013

1.6 Billion rounds of nonsense

The current "big story": the Department of Homeland Security has supposedly ordered 1.6 billion rounds of ammunition, much of it of the hollow point variety. Here's an article at Forbes, of all places, talking about the order. Here's the cited source for the Forbes piece, the Denver Post.

But this is actually not a new story, it "broke" last year, though then it was 450 million round of ammo, not the current 1.6 billion:
The Department of Homeland Security (DHS) and its Immigration and Customs Enforcement (ICE) office is getting an "indefinite delivery" of an "indefinite quantity" of .40 caliber ammunition from defense contractor ATK.  
U.S. agents will receive a maximum of 450 million rounds over five years, according to a press release on the deal.
Here is the press release--from ATK--that was the basis for this story last year. It was issued on March 12th--exactly a year ago--and it says:
ATK (NYSE: ATK) announced that it is being awarded an Indefinite Delivery/Indefinite Quantity (IDIQ) agreement from the Department of Homeland Security, U.S. Immigration and Customs Enforcement (DHS, ICE) for .40 caliber ammunition. This contract features a base of 12 months, includes four option years, and will have a maximum volume of 450 million rounds.
For those unfamiliar with government contract language, this is a standard IDIQ contract, common for government suppliers of all sorts. It means that the government is not actually ordering a specific quantity for a delivery at a specific time, Rather, it's a contract for whatever amount the government desires within a specific time frame. In this case, the maximum number of rounds that the government is allowed to buy under this contract is 450 million. Why is the contract structured in this manner? First, because the high maximum gives the government the best price and allows the company to trumpet the contract with a press release like the one above. Second, because it allows the government to receive the order in batches, as opposed to getting it all at once. Thus, it doesn't have to commit additional resources to store whatever goods are being ordered.

IDIQ contracts are not always done in terms of a maximum quantity, however. They can also be structured with a maximum value, instead. For instance, here is another ATK press release trumpeting a contract with the FBI and Department of Justice from the end of last year. Look how it is worded:
ATK (NYSE: ATK) announced that it is being awarded a Fixed Price Indefinite Delivery/Indefinite Quantity (IDIQ) agreement from the Department of Justice (DOJ) and Federal Bureau of Investigation (FBI) for .40 caliber ammunition. This contract to provide duty and training ammunition features a base of 12 months, includes four option years and has a maximum value of $75 million over the life of the contract.
See the difference? It has a maximum value of $75 million (and it also has a "fixed price" stipulation). How many rounds might this one be? Well, .40 caliber ammunition can be had for a price of around 75 cents per round. I'm sure the price is much lower when buying huge quantities, so let's go with 50 cents per round. That means the above contract would have a maximum volume of around 150 million rounds. Hardly 1.6 billion, but nothing to sneeze at. Still, that's a maximum across five years. The quantity actually delivered? Well, I guess we'd have to ask the FBI in 2018.

But none of this indicates where the figure of 1.6 billion came from. It's given in the Denver Post story with no source. As near as I can tell, this AP story by someone named Alicia Caldwell is the source. There's no citations to speak of in the story, just a quote by someone at a Federal training facility noting how many rounds are used every year in that regard. And look how the piece completely misrepresents the 450 million round IDIQ contract from last year:
ICE's ammunition requests in the last year included:  
_450 million rounds of .40-caliber duty ammunition
The author is clearly clueless. The order was for both DHS and ICE and--as I have shown--wasn't really for 450 million rounds.

This story has serious legs, though. Conspiracy-minded folks are jumping all over it, as are many hard-core conservative people, from Mark Levin to Glenn Beck, along with far left progressives as well. They imagine that the Federal Government is gearing up for some sort of domestic war, that it's buying up ammo so there's none available for citizens, or both.

And they're all wrong. Their lack of understanding with regard to what is actually happening with these contracts is, well, a little scary. Hopefully, they'll get clued in, sooner rather than later.

Cheers, all.

18 comments:

  1. It's easier to go off on conspiracy theory tangents than to use actual facts...facts don't sell news, as we've known for a long time.

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  2. So, what you seem to be saying is that no one really knows how many rounds are being purchased by DHS and ICE, right? The top line figure is simply to get the best price, but they could end up buying what - say 1 box? Let's just, for the sake of argument, say the they do buy the maximum volume of 450 million rounds (or roughly 1.5 rounds per American). But let's look at the real number. TSA has 58,400 employees, including secretaries and baggage screeners. ICE has 20,500 employees, including web designers and mail clerks. Rounding up, this is a total of 80,000 people. That works out to 5600 rounds per employee, including cafeteria workers. Seems a bit excessive, don't you think? If I stored 5600 rounds you would rightly think I'm some sort of paranoid kook.

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  3. Well again, the contract runs for as long as five years. So even assuming they took full delivery, it wouldn't be all at once (but they're not going to take full delivery, regardless). And where would they put it? In a huge warehouse with the Ark of the Covenant?

    But the Feds are notoriously bad at tracking such things. When they order in bulk, oftentimes the stuff that gets stored gets forgotten about, so the same stuff gets re-ordered. This is why they like batches, so they don't have to store too much.

    Also, open contracts are all over the place in Fed-land. They can be for the same thing, again and again. Because one contract isn't closed, it doesn't mean a new bureaucrat--or the same one--won't solicit a new one that duplicates the old one.

    Seriously, there's nothing here, no uber-conspiracy, no attempt te prepare for a domestic war or the like. It's just the messy and sometimes confusing way the Fed does business. It's getting blown out of proportion.

    And imo, there are far more serious things to worry about...

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  4. Your prices are in no way accurate.

    I just went online and found 500 round boxes of .40 for $151. This is of course for FMJ ammo since almost everybody trains with FMJ. Just about every indoor range in the country makes you use FMJ. I guess if DHS doesn't have to follow EPA regulations they could shoot hollow points but I doubt it. Why would they?

    So $151 for 500 rounds comes down to 30 cents per bullet. That is also going through a retailer. I assume that going direct to the manufacturer would get even better prices.

    Even at 30 cents per bullet that is 250 million round. 20 cents takes it to 375 million and at 15 cents per round it reaches 450 million.

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  5. Okay, all that does is make my point (and the rounds ARE hollow points, by and large). Those numbers are from a COMPLETELY DIFFERENT contract not being cited by the various articles on the 1.6 billion or the 450 million rounds. Again, multiple open IDIQ contracts...there's just nothing here. Sorry.

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  6. The ATK announcement seems to imply that it is for the HST round which is the "duty" round. I understand that you say that they may not ship the maximum number of rounds but nowhere does it say they won't. I also find it odd that they are buying huge amounts of hollow point ammo. I would expect it to be FMJ for training purposes.

    Actually Peggy Dixon from DHS said they were for training but seeing as they cost more per bullet and create lead contamination issues I tend to doubt this. This is its own separate issue on govt. waste.

    Just a year or so ago the GSA had to clean up the EPA's HQ because of lead contamination from the secret service gun range.

    The story also spoke to 1.6 billion rounds so that still leaves contracts for another 1.2 billion.

    While I don't believe that the executive office is getting ready to wage war on its populace, I could see them spending money to drive up prices and reduce availability.

    If the DHS ends up only buying 20 million rounds then you are right and it is a non-issue. If they really are buying close to 1.6 billion then it is. I would say at this point neither you or anybody else can say for sure what is going on.

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  7. This article is saying that HLS only bought 450 million rounds and not 1.6 billion. The 450 million rounds referenced is just the .40 cal pistol ammo purchase and does not include the .223 M16 ammo or the .308 M60 maching gun ammo or the .50 M2 ammo for the weapons carriers they are also buying. A second look suggests that the 1.6 billion rounds may be understated. I believe it is closer to 2 billion rounds purchased.

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  8. No, it's not. The number--that people just don't seem to understand--is actually even higher than 2 billion, with respect to orders from just this one supplier, ATK. Here is an archive of all their press releases, going back to 1997: http://atk.mediaroom.com/

    Total up all the ammo. Go ahead.

    And still, the fundamental point remains: the Feds are not stockpiling weapons and ammo for a domestic war, nor are they buying up ammo to make it unavailable for others.

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    1. Your points about trying to figure out how much ammo does not prove this statement: "the Feds are not stockpiling weapons and ammo for a domestic war, nor are they buying up ammo to make it unavailable for others."

      They could be stockpiling this stuff in smaller or larger amounts. How they would use it is not addressed nor proven by your post.

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    2. They could be doing lots of things. But there's no actual evidence that they are stockpiling ammo at all, much less that they are doing so for one of the reasons cited. There's just people imagining such things because they don't understand what these contracts actually indicate.

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    3. The feds also don't think anyone will be upset with the IRS come Obamacare implementation time. That must be why they delivered all those hollowpoints to IRS facilities... they gotta make sure they can shoot the right women/children/oldladies!

      But those targets are just for target identification drills, right?

      lol..........

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  9. well they are stockpiling coffins?

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  10. ATK: "...agreement from the Department of Homeland Security, U.S. Immigration and Customs Enforcement (DHS, ICE)..."

    You: "The order was for both DHS and ICE..."

    No, I don't think that's correct. ICE is only one component within the DHS. If the order was for the entire department, they would not mention the single component ICE. Though things are complicated: They might end up divvying up those rounds to other agencies.

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  11. thank you for this post, it definitely answers *some* of the questions I had about the large ammo purchases. However, it does not answer *all* of them, and I think you go too far in basically stating "I've put all your fears to bed, go sleep in peace little lambs."
    Even the relatively smaller ammo numbers are huge numbers of ammo, and Homeland Security did not help the situation IMO by stating they use about 15 million rounds per year. You would get an amazing price if you purchased 15 million rounds at bulk pricing, right? I assume above that amount you're probably not drastically reducing your quantity-based discount appreciably. Also, I understand that the vendor would want to announce as big of a number as possible in their press releases. However, I know that the vendor will base their pricing on a realistic quantity expectation. That number is probably lower than the press release maximum number, but how much lower?
    Lastly, what about the drones and the light-armored tanks? I think you have "disarmed" part of the conspiracy theory WRT this situation, but a substantial part of it remains.

    Thanks again for sharing this info, I sincerely appreciate it.
    -David

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    1. You're a complete rube. Asking questions doesn't constitute a logical claim founded in reality. This isn't right wing talk radio or fox news, where that flies. In reality, you have to prove your claims and questions before they are taken seriously. Second, the light-armored tanks you are talking about, if you would even take the time to do some research and think on your own, were ordered and are for the U.S. Navy. These are standard purchases, and nothing out of the ordinary. I'm sure Bush purchased far more munitions and equipment than Obama ever has, yet not a single peep from the right wing nuts then. Lastly, make up your mind. Either are government is completely inept and can't do anything right, which is the base talking point for every right wing conservative argument, or they're extremely efficient and so well coordinated that they could place a whole civil war on the American population without a single person, out of the thousands who would be involved in such a plan, leaking anything. So which is it? The right can't even keep track of their own stupidity.

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  12. well all i can say is i have never had trouble buying bullets until recently i have been shooting for 37 years something is going on somewhere for there to be such a shortage

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  13. Anonymous,

    I agree with you completely as to the shortage of ammo right now. I just bought a new 9mm berretta on Wednesday, and I was told by 4 different stores that they are completely out of 9mm rounds due to the government buying up rounds. I don't want to sound like an anarchist, but let's look at the facts. The wars in Irag and Afganistan are basically done, and we have been shifting our troops more towards the far Eastern areas such as around China, and Russia. I work in the scrap industry and I watch to see where all of the major metal resources are going and where they are, China controls over 92% of the major metals that are needed for manufacturing and production. They control our markets right now. They have us in a double-whammy situation since after WWII, they bought out a vast majority of the war bonds to help pull our country out of debt. They have been bailing us out of our financial crisis for quite some time, and with the new president that they have elected, is tightening the laws for material that is coming into their country that just about every load that is shipped there is denied and having to be shipped back. It is costing Millions of dollars to do this. Back to the point, the government is buying up the munitions now because of what they are projecting to happen. China is growing more angry with the US everyday and if they were to cut us off, who is there to help us out? No one. I think that the sleeper in all of this is Russia though. If they partner with China, they will have a force that nearly doubles everyone else combined. With us moving 50,000 troops to Japan, 35,000 troops in SouthKorea, keeping the bases in Iraq and Afganistan, not to mention the "floating forwarding base" that the Navy has; we are definitely making a move, but whether it is a move for attack, or a defense move, I still haven't figured that out yet.

    Jake

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    1. RE 1.6 billion rounds of AMMO
      http://video.foxnews.com/v/2245894685001/whats-really-behind-ammo-shortages-across-country/?intcmp=obnetwork

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