DoD awards $22.4M for 7,100 TWV systems, BAE Systems secures contract

Contract Overview

Contract Amount: $22,416,759 ($22.4M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-08

End Date: 2011-07-29

Contract Duration: 689 days

Daily Burn Rate: $32.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FUNDING PROVIDED FOR 7,100 TWV SYSTEMS FOR DVE-FOS.

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78725

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: FUNDING PROVIDED FOR 7,100 TWV SYSTEMS FOR DVE-FOS. Key points: 1. Contract value of $22.4 million for 7,100 units suggests a per-unit cost of approximately $3,157. 2. The contract was awarded under full and open competition, indicating a competitive bidding process. 3. BAE Systems, a major defense contractor, was awarded this firm-fixed-price contract. 4. The contract duration of 689 days (approx. 23 months) provides a clear timeframe for delivery. 5. The North American Industry Classification System (NAICS) code 334511 points to manufacturing of navigation and guidance instruments. 6. Awarded by the Department of the Army, this procurement supports specific defense needs.

Value Assessment

Rating: good

The per-unit cost of approximately $3,157 for the TWV systems appears reasonable when considering the specialized nature of navigation and guidance instruments for defense applications. Benchmarking against similar advanced electronic systems, this price point suggests a fair market value, especially given the firm-fixed-price structure which transfers some risk to the contractor. Without direct comparisons for this specific TWV system, the overall value is assessed as good, assuming the system meets its technical specifications and performance requirements.

Cost Per Unit: $3,157 per unit

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bids indicates a degree of competition, though the exact number of potential bidders in this specialized market is unknown. A competitive process generally helps in achieving better pricing and value for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Army, receiving advanced TWV systems. The contract delivers 7,100 TWV systems, crucial for navigation, guidance, and potentially other operational functions within military applications. The geographic impact is primarily within the United States, where the contractor BAE Systems operates and where the systems will likely be deployed. Workforce implications include employment opportunities at BAE Systems and its subcontractors involved in the manufacturing and delivery of these specialized systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for unforeseen manufacturing complexities.
Dependence on a single contractor (BAE Systems) for the delivery of a critical component, posing supply chain risks.
The specific technical capabilities and long-term reliability of the 7,100 TWV systems are not detailed, raising questions about performance.
Limited information on the competitive landscape beyond the two bids received, making it difficult to assess if optimal pricing was achieved.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract type helps control costs and provides budget certainty for the government.
BAE Systems is a well-established defense contractor with a track record in electronic systems integration.
The contract specifies a clear quantity (7,100 units) and delivery timeframe, indicating defined expectations.
The NAICS code 334511 aligns with specialized manufacturing, suggesting the systems are for a specific, critical function.

Sector Analysis

The contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511). This industry is characterized by high technological sophistication and significant R&D investment. The market size for such specialized defense electronics is substantial, driven by ongoing modernization efforts and operational requirements of military forces globally. This contract represents a specific procurement within this broader sector, likely for a critical component of a larger defense system.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-value contract awarded to a major defense contractor, BAE Systems, it is likely that small businesses may be involved as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem remains unclear. The focus appears to be on fulfilling a significant defense requirement through established prime contractors.

Oversight & Accountability

Oversight for this Department of the Army contract would typically be managed by the contracting officer and program management office responsible for the TWV systems. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Procurement
Navigation Systems
Guidance Systems
Military Electronics
BAE Systems Contracts
Department of the Army Acquisitions

Risk Flags

Potential for obsolescence if technology advances rapidly.
Supply chain dependencies for specialized components.
Performance verification challenges for complex systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC.. FUNDING PROVIDED FOR 7,100 TWV SYSTEMS FOR DVE-FOS.

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 $22.4 million.

What is the period of performance?

Start: 2009-09-08. End: 2011-07-29.

What is the specific function and technical capability of the 7,100 TWV systems being procured?

The provided data indicates the contract is for '7,100 TWV systems for DVE-FOS' and falls under NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing). While the acronym 'TWV' is not explicitly defined, and 'DVE-FOS' is also not detailed, the NAICS code strongly suggests these systems are related to navigation, guidance, or detection for aeronautical or nautical applications. These could be components for aircraft, ships, or ground vehicles, providing critical operational data for positioning, targeting, or situational awareness. The exact technical specifications, performance metrics, and intended operational environment would require access to the detailed contract statement of work or technical documentation.

How does the per-unit cost of approximately $3,157 compare to similar defense navigation or guidance systems?

The per-unit cost of approximately $3,157 for the TWV systems is difficult to benchmark precisely without knowing the exact specifications and complexity of the system. However, for specialized defense electronics, particularly those involving navigation and guidance, this price point can be considered moderate. For instance, advanced GPS receivers, inertial navigation units, or specialized sensor modules for military applications can range from a few hundred to tens of thousands of dollars per unit, depending on factors like accuracy, environmental hardening, integration capabilities, and technological sophistication. Given that this contract was awarded under full and open competition and is a firm-fixed-price type, the price suggests a balance between capability and cost-effectiveness for the Department of the Army.

What is BAE Systems' track record with similar defense electronics contracts?

BAE Systems Information & Electronic Systems Integration Inc. is a major defense contractor with extensive experience in developing and manufacturing a wide array of electronic systems for military applications. Their portfolio includes radar, electronic warfare systems, communication systems, and navigation and guidance equipment. They have a long history of securing large contracts from various branches of the U.S. military, including the Department of the Army. While specific details on their performance for 'TWV systems' are not provided here, their general track record suggests they possess the technical expertise and manufacturing capacity to fulfill this type of contract. Past performance evaluations and contract close-out data would offer a more granular assessment.

What are the potential risks associated with this contract, and how are they mitigated?

Potential risks include technical performance issues if the TWV systems do not meet stringent military requirements, delivery delays impacting operational readiness, and potential cost growth if the firm-fixed-price contract did not fully account for all manufacturing challenges. Mitigation strategies are inherent in the contract structure: the firm-fixed-price nature places the cost risk on BAE Systems, incentivizing efficient production. The contract duration of 689 days allows for phased delivery and testing. Furthermore, the Department of the Army's oversight, quality assurance procedures, and BAE Systems' established reputation as a defense contractor are designed to ensure compliance and mitigate performance risks. The competitive award process also helps select a capable supplier.

How does this $22.4 million award fit into the broader spending patterns for navigation and guidance systems within the Department of Defense?

The $22.4 million award for 7,100 TWV systems represents a specific, albeit significant, procurement within the vast defense electronics budget. The Department of Defense consistently invests billions annually in systems related to navigation, guidance, search, and detection, driven by the need for advanced capabilities across air, land, and sea platforms. This contract likely supports a particular program or platform upgrade. Compared to major platform acquisitions (e.g., aircraft, ships) or large-scale R&D programs, this award is a mid-tier procurement focused on a specific component. Its significance lies in providing critical functionality for the end-users within the Army.

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, 90

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: $22,416,759

Exercised Options: $22,416,759

Current Obligation: $22,416,759

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T09DM403

IDV Type: IDC

Timeline