DoD's $14.77M contract for 2,639 DVE-FOS TWV systems awarded to BAE Systems

Contract Overview

Contract Amount: $14,768,163 ($14.8M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2009-08-28

End Date: 2011-07-29

Contract Duration: 700 days

Daily Burn Rate: $21.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FUNDING PROVIDED FOR 2,639 DVE-FOS TWV SYSTEMS.

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78725

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $14.8 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: FUNDING PROVIDED FOR 2,639 DVE-FOS TWV SYSTEMS. Key points: 1. The contract value of $14.77 million for 2,639 systems suggests a per-unit cost of approximately $5,600. 2. Awarded under full and open competition, this contract indicates a competitive environment for these specialized systems. 3. The fixed-price contract type shifts performance risk to the contractor, BAE Systems. 4. The duration of 700 days (approximately 23 months) for delivery suggests a moderate-complexity or high-volume production requirement. 5. The North American Industry Classification System (NAICS) code 334511 points to manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems. 6. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.

Value Assessment

Rating: good

The per-unit cost of approximately $5,600 for these DVE-FOS TWV systems appears reasonable given the specialized nature of navigation and guidance equipment. Benchmarking against similar complex electronic systems, this price point suggests efficient production or favorable negotiation. Without specific details on the system's capabilities, a precise comparison is difficult, but the value seems aligned with industry standards for advanced defense electronics.

Cost Per Unit: Approximately $5,600 per unit

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders (no: 2) suggests a competitive landscape, though the exact number of proposals received is not specified. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The primary beneficiaries are the Department of the Army, receiving critical navigation and guidance systems. The contract delivers 2,639 DVE-FOS TWV systems, enhancing operational capabilities for military personnel. The contract was awarded to a contractor located in Texas (st: TX), potentially impacting the regional economy and workforce. The systems are likely to be used by military units requiring advanced navigation and detection capabilities, supporting national defense objectives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen production challenges.
Risk of delivery delays if BAE Systems faces supply chain disruptions or manufacturing issues.
Dependence on a single contractor for a significant quantity of critical systems could pose a supply chain risk.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Fixed-price contract type incentivizes contractor efficiency and cost control.
Contractor BAE Systems is a major defense contractor with established experience in electronic systems integration.

Sector Analysis

This contract falls within the Defense industry, specifically the manufacturing of specialized electronic systems for navigation and guidance. The market for such systems is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this sector is driven by defense modernization efforts and the need for advanced situational awareness. Comparable spending benchmarks would involve other contracts for similar sensor, detection, or navigation equipment for military applications.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and there is no explicit mention of small business subcontracting requirements. Therefore, the direct impact on the small business ecosystem is likely minimal, unless BAE Systems voluntarily engages small businesses in its supply chain. The focus appears to be on large prime contractors capable of delivering complex defense systems.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified systems. Transparency is facilitated through contract award databases, though detailed performance metrics and internal oversight processes are not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Electronics Manufacturing
Navigation and Guidance Systems
Military Search and Detection Equipment
BAE Systems Contracts
Army Aviation Support Systems

Risk Flags

Potential for cost overruns under fixed-price contract.
Risk of delivery delays impacting operational readiness.
Limited competition (2 bidders) may not yield the lowest possible price.
Lack of detailed technical specifications for the DVE-FOS TWV systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.8 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC.. FUNDING PROVIDED FOR 2,639 DVE-FOS TWV SYSTEMS.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $14.8 million.

What is the period of performance?

Start: 2009-08-28. End: 2011-07-29.

What is the specific function and technical capability of the DVE-FOS TWV systems?

The provided data does not specify the exact function or technical capabilities of the 'DVE-FOS TWV systems.' The NAICS code 334511 suggests they are related to 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' DVE-FOS likely refers to a specific program or system designation within the Department of Defense, possibly related to Driver Vision Enhancement (DVE) or Forward Observation Systems (FOS), and TWV could denote a specific type of vehicle or equipment. Without further documentation or context, the precise operational role and technological sophistication of these systems remain undefined, making a detailed assessment of their necessity and effectiveness challenging.

How does the per-unit cost of approximately $5,600 compare to similar defense navigation systems?

The per-unit cost of approximately $5,600 for the DVE-FOS TWV systems appears to be in a reasonable range for specialized defense electronics, particularly those involving navigation and guidance. However, a precise comparison is difficult without knowing the exact specifications and complexity of these systems. For instance, basic GPS receivers might cost a few hundred dollars, while advanced inertial navigation systems or integrated sensor suites for aircraft or vehicles can cost tens or even hundreds of thousands of dollars per unit. Given the NAICS code and the context of a defense award, these systems likely incorporate sophisticated sensors, processing capabilities, and ruggedization for military environments. The value proposition hinges on the specific technological advancements and operational advantages they provide to the warfighter.

What is the track record of BAE Systems in delivering similar navigation and guidance systems to the DoD?

BAE Systems is a major global defense contractor with a long and extensive track record of delivering a wide array of electronic systems, including those for navigation, guidance, and situational awareness, to the Department of Defense and allied nations. They are known for producing complex systems for aircraft, ground vehicles, and naval platforms. While this specific contract is for 2,639 units, BAE Systems has experience with much larger and more complex programs. Their history suggests a capability to manage production, integrate advanced technologies, and meet stringent military specifications. However, as with any large contractor, specific program performance can vary, and a detailed review of past performance on similar contracts would be necessary for a comprehensive assessment.

What are the potential risks associated with a firm-fixed-price contract for these systems?

A firm-fixed-price (FFP) contract, while beneficial for cost certainty, carries inherent risks for both the government and the contractor. For the contractor (BAE Systems), the primary risk is absorbing any cost overruns that may occur during production due to unforeseen technical challenges, material price increases, or labor inefficiencies. If their cost estimates are inaccurate, profit margins can shrink, or losses can be incurred. For the government, the risk lies in the contractor potentially cutting corners on quality or performance to maintain profitability if cost pressures become too high, although stringent quality assurance and acceptance testing mitigate this. Additionally, if the contractor faces significant difficulties, it could lead to delivery delays, impacting operational readiness.

How does the competition level (2 bidders) impact the value received by the government?

Having two bidders in a full and open competition generally indicates a moderate level of competition. While more bidders typically lead to greater price pressure and potentially lower costs for the government, two bidders still provide a basis for comparison and negotiation. It suggests that the market for these specific DVE-FOS TWV systems is not overly concentrated but also not widely populated with potential suppliers. The government can leverage the bids from these two entities to ensure a competitive price. However, the government might explore strategies to encourage more participation in future procurements if feasible, to further enhance price discovery and potentially identify innovative solutions from a broader range of contractors.

What is the historical spending trend for similar navigation and guidance systems within the Department of the Army?

Historical spending on navigation and guidance systems within the Department of the Army is substantial and fluctuates based on modernization priorities, operational tempo, and specific platform upgrades. The Army procures a wide variety of such systems, ranging from basic GPS receivers and tactical radios to advanced inertial navigation units, targeting pods, and integrated sensor suites for aircraft and vehicles. Annual spending can range from hundreds of millions to billions of dollars across all categories. Contracts like this one, for specific system types like the DVE-FOS TWV, represent a fraction of the overall investment. Analyzing historical data would reveal trends in technology adoption, average unit costs for comparable systems, and the prevalence of specific contractors in this market segment over time.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 6500 TRACOR LANE, AUSTIN, TX, 78725

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,768,163

Exercised Options: $14,768,163

Current Obligation: $14,768,163

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T09DM403

IDV Type: IDC

Timeline