DoD Awards $834M Contract for Combat Vehicles to BAE Systems, Raising Oversight Concerns
Contract Overview
Contract Amount: $968,957,652 ($969.0M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2005-03-31
End Date: 2008-12-31
Contract Duration: 1,371 days
Daily Burn Rate: $706.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200507!004900!2100!W56HZV!TACOM - WARREN !W56HZV05G0005 !A!Y!C!N!0001 ! !20050331!20070131!834476079!824825459!217304393!N!B A E SYSTEMS LAND&ARMAMENTS!1100 BAIRS RD !YORK !PA!17404!87048!133!42!YORK !YORK !PENN !+000071500000!N!N!000000000000!2350!COMBAT ASSAULT&TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !000 !* !336992!E! !4! ! ! ! ! !20200930!B! ! !N!A!D!N!J!1!001!N!2A!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! ! ! !0001! !
Place of Performance
Location: NEW CUMBERLAND, YORK County, PENNSYLVANIA, 17070
Plain-Language Summary
Department of Defense obligated $969.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200507!004900!2100!W56HZV!TACOM - WARREN !W56HZV05G0005 !A!Y!C!N!0001 ! !20050331!20070131!834476079!824825459!217304393!N!B A E SYSTEMS LAND&ARMAMENTS!1100 BAIRS RD !YORK !PA!17404!87048!133!42!YORK !YORK !PENN !+000071500000!N!N!000000000000!2350!COMBAT ASSAULT&TACTICAL VEH, TR… Key points: 1. Significant contract value of $834M for tracked combat vehicles. 2. Sole-source award to BAE Systems Land & Armaments raises competition questions. 3. Potential for taxpayer overpayment due to limited competition. 4. Contract falls within the Defense sector, specifically military vehicles.
Value Assessment
Rating: questionable
The contract value of $834M for combat vehicles appears substantial. Benchmarking against similar contracts is difficult without more detailed cost breakdowns, but the lack of competition suggests potential for inflated pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competitive bidding on this large contract could result in millions of dollars in unnecessary spending.
Public Impact
Taxpayers may be overpaying for critical military equipment due to lack of competition. The Department of Defense's reliance on sole-source contracts can stifle innovation and reduce overall value. Ensuring robust oversight is crucial to mitigate risks associated with non-competitive awards.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
Positive Signals
- Award to established defense contractor
- Contract supports critical military capabilities
Sector Analysis
This contract is within the Defense sector, specifically for tracked combat vehicles. Spending in this area is often characterized by high unit costs and long procurement cycles, making competitive bidding particularly important for cost control.
Small Business Impact
The award went to a large prime contractor, BAE Systems. There is no indication of subcontracting opportunities for small businesses in the provided data, which is a missed opportunity for economic inclusion.
Oversight & Accountability
The sole-source nature of this award warrants close scrutiny. Robust oversight mechanisms should be in place to ensure the government is receiving fair value and that the contractor is meeting all performance requirements.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency in pricing
- Risk of vendor lock-in
- Missed opportunities for small business participation
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, pa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $969.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200507!004900!2100!W56HZV!TACOM - WARREN !W56HZV05G0005 !A!Y!C!N!0001 ! !20050331!20070131!834476079!824825459!217304393!N!B A E SYSTEMS LAND&ARMAMENTS!1100 BAIRS RD !YORK !PA!17404!87048!133!42!YORK !YORK !PENN !+000071500000!N!N!000000000000!2350!COMBAT ASSAULT&TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !000 !* !336992!E! !4! ! ! ! ! !20200930!B! ! !N!A!D!N!J!1!001!N!2A!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! ! ! !0001! !
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $969.0 million.
What is the period of performance?
Start: 2005-03-31. End: 2008-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs. However, without transparency, it's difficult to assess if these criteria were met. To ensure fair pricing, the DoD should conduct thorough cost analyses and potentially negotiate stricter terms, even in a non-competitive environment. Independent cost estimators and robust contract surveillance are vital.
What are the long-term risks associated with awarding such a significant contract without competition to a single vendor?
The primary long-term risk is vendor lock-in, where the government becomes overly dependent on a single supplier, potentially leading to escalating costs and reduced flexibility. It can also stifle innovation as there's less incentive for the vendor to improve efficiency or offer competitive pricing. Furthermore, it can create a precedent for future non-competitive awards, weakening the overall procurement system.
How does this contract contribute to the overall effectiveness and readiness of the U.S. military's combat vehicle fleet?
This contract directly addresses the acquisition or sustainment of tracked combat vehicles, which are crucial for ground force operations. Assuming BAE Systems delivers high-quality, reliable vehicles as per the contract specifications, it contributes to maintaining and enhancing the military's combat capabilities. However, the effectiveness is indirectly impacted by the potential for higher costs and reduced innovation stemming from the sole-source award.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 1100 BAIRS RD, YORK, PA, 17408
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV05G0005
IDV Type: IDC
Timeline
Start Date: 2005-03-31
Current End Date: 2008-12-31
Potential End Date: 2008-12-31 12:12:00
Last Modified: 2017-09-07
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