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This one baffles me. Why would any manufacturer sign a contract like this? They are obligated to invest in plant and materials to have on call massive amounts of product for a customer who might not buy any. Why would anyone give a discount to a customer like that?

FACT: The government purchases large quantities of ammunition in ID/IQ (Indefinite Delivery/Indefinite Quantity) orders, only guaranteeing to purchase as little as 1,000 or 100,000 rounds per year. The large orders lock in rates in the event ammunition prices increase as they have in recent years.

Because they DO buy large quantities, even if it is not guaranteed.

You might as well ask why a defense contractor signs a contract to deliver airplanes where the contract doesn’t guarantee any will actually be purchased.

“Why would any manufacturer sign a contract like this? They are obligated to invest in plant and materials to have on call massive amounts of product for a customer who might not buy any.”

Because the contracts must be profitable more often than not. This isn’t rocket science.

An ID/IQ contract from the Government only sets out the terms of the contract and the pricing for any “FUTURE” delivery orders (DOs) during the 5 year duration of the contract. I have seen ID/IQ contracts with a NO MIN purchase. All DOs that are place against that ID/IQ contract must be individually funded and bear an appropriation citation traceable back to a Congressional appropriation. So if anyone wants to get excited about this story CHECK WITH YOUR CONGRESSCRITTER.

These are the folk enabling Zero - they have had every chance to stop the spending and refuse, citing 'oh we cannot shut the Gov down', and 'OH we cannot dare to have another debt downgrade from S&P', or whatever other lame excuse one desires to hear and hang their hat on. BLAME CONGRESS and in particular the GOP Led House where all appropriation bills originate. The GOP had every opportunity to stop this nonsense, but are no different than the RATs when it comes to certain issues. Not to mention the party wearing the pants in the 2010s are the RATS - the current GOP leadership are spineless sissies.