I see, via Infowars, Janey Napolitano’s Gropers are buying another 360,000 rounds of hollow point training ammo, to be delivered to the DHS’ New Mexico training facility. Which reportedly uses about 6 million rounds a year.
The amount of ammo is trivial, amounting to just 0.00018 percent of the .40 S&W ammo DHS’ Gropers have contracted for in the last year. On the other hand, like the other massive DHS orders, it requires the contractor to order – and to pay for – massive quantities of brass, of lead, of gunpowder, and of primers. Or massive quantities of the chemicals to make powder and primers.
The Gropers have placed orders for 400,000,000, four hundred million, rounds a year of .40 S&W ammunition a year for the next four years. DHS claims that they will only accept a part of the order, and placing their order for such huge quantities of ammunition will save the government money. It would be very peculiar if it did.
If someone places an order with me for 100000 widgets, I must buy the materials to make that many widgets. And if they only accept 20,000 pieces, I am hung with the material to make 80,000 pieces. Which I must dispose of in some fashion in order to recoup my investment in components.
As a part of any contract with an escape clause allowing the purchaser to take all or part of their order, I would insist that the price for the first 10,000 widgets would be, let us say, $10 each. Each subsequent block of 10,000 widgets would be at a lower price, until the median price for the complete order would be perhaps $6.00 each.
That is how you “save money” on contracts with partial fulfillment clauses. And any businessman with any experience would CHA with a cost adjustment for partial fulfillment. So DHS is not “saving money” by purchasing huge quantities of ammunition, and then accepting a much smaller amount.
I do not know precisely what the DHS is doing, or thinks it is doing. But you can bet your last buck that we would not like it if we knew.