DoD's $158M thermal weapon sights contract awarded to BAE Systems, with a significant portion for optics manufacturing

Contract Overview

Contract Amount: $158,023,030 ($158.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2008-02-05

End Date: 2010-03-29

Contract Duration: 783 days

Daily Burn Rate: $201.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THERMAL WEAPON SIGHTS

Place of Performance

Location: LEXINGTON, MIDDLESEX County, MASSACHUSETTS, 02421

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $158.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: THERMAL WEAPON SIGHTS Key points: 1. Value-for-money assessment indicates potential for cost savings through competitive bidding. 2. Competition dynamics show a full and open process, suggesting a healthy market. 3. Risk indicators are moderate, with contract type and performance metrics needing close monitoring. 4. Performance context is tied to the delivery of advanced optical instruments for defense. 5. Sector positioning places this contract within the specialized defense optics manufacturing industry.

Value Assessment

Rating: good

The contract's total value of $158 million for thermal weapon sights appears reasonable given the specialized nature of the equipment. Benchmarking against similar defense optics contracts would provide a clearer picture of value. The firm-fixed-price structure suggests that cost overruns are primarily the contractor's responsibility, which is a positive sign for cost control. However, without specific per-unit cost data or comparisons to commercial equivalents, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bidders suggests a competitive environment, which typically drives better pricing and innovation. The level of competition is a positive indicator for price discovery and ensures that the government is likely receiving a fair market price for the thermal weapon sights.

Taxpayer Impact: A competitive bidding process for defense equipment like thermal weapon sights helps ensure that taxpayer dollars are used efficiently, leading to potentially lower costs and higher quality products.

Public Impact

The primary beneficiaries are the Department of the Army and its soldiers, who will receive advanced thermal weapon sights. The services delivered include the manufacturing and supply of critical optical instruments for enhanced battlefield awareness. The geographic impact is primarily within the United States, supporting domestic manufacturing capabilities. Workforce implications include employment in the specialized field of optical instrument and lens manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for technology obsolescence in rapidly evolving defense electronics.
Dependence on a single contractor for a critical defense capability.
Ensuring long-term sustainment and maintenance support for the fielded systems.

Positive Signals

Awarded under full and open competition, indicating a robust market.
Firm-fixed-price contract structure limits cost escalation risks for the government.
Contractor's established presence in defense electronics suggests technical capability.

Sector Analysis

The defense optics and electro-optical systems market is a highly specialized segment within the broader defense industry. This contract for thermal weapon sights fits within the 'Optical Instrument and Lens Manufacturing' sector. The market is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Comparable spending benchmarks would involve looking at other contracts for advanced targeting systems, night vision devices, and other sensor-based military equipment.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, and the prime contractor, BAE Systems, is a large defense corporation. However, large prime contractors are often required to subcontract a portion of their work to small businesses. The extent to which BAE Systems engages small businesses for components, specialized services, or support functions will determine the impact on the small business ecosystem. Further analysis of subcontracting plans would be needed.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Night Vision Systems
Targeting and Fire Control Systems
Advanced Sensor Technology
Defense Electronics Manufacturing
Army Weapon Systems Procurement

Risk Flags

Potential for technology obsolescence
Supply chain vulnerability for specialized components
Long-term sustainment and maintenance planning

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $158.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. THERMAL WEAPON SIGHTS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION AND 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 $158.0 million.

What is the period of performance?

Start: 2008-02-05. End: 2010-03-29.

What is the track record of BAE Systems in delivering similar thermal weapon sights to the Department of Defense?

BAE Systems is a major defense contractor with extensive experience in developing and manufacturing a wide range of electronic systems, including electro-optical and infrared (EO/IR) products for military applications. They have a history of producing components and integrated systems for various platforms, including weapon sights. While specific details on past performance for this exact contract vehicle are not provided, their overall portfolio suggests a strong capability in this domain. Past performance evaluations, often part of the source selection process for such contracts, would typically assess their ability to meet technical specifications, delivery schedules, and quality standards on previous, similar endeavors. Government contract databases and performance reports (like CPARS) would offer more granular insights into their historical delivery success rates and any issues encountered.

How does the awarded price compare to market rates for similar thermal weapon sights?

Determining the precise market rate for these specific thermal weapon sights is challenging without detailed technical specifications and volume comparisons. The awarded value of $158 million over approximately 783 days (from award to end date) suggests a significant investment. However, the 'Optical Instrument and Lens Manufacturing' category (NAICS 333314) encompasses a broad range of products. To benchmark effectively, one would need to compare the per-unit cost against similar military-grade thermal imagers with comparable resolution, range, and features, considering factors like firm-fixed-price contracts and full and open competition. Commercial off-the-shelf (COTS) equivalents, if available and suitable for military use, could also serve as a reference point, though military-grade equipment often carries a premium due to ruggedization, specific performance requirements, and testing.

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

Key risks include potential technological obsolescence, as thermal imaging technology evolves rapidly. Mitigation involves ensuring the contract specifications allow for upgrades or future technology insertion, or that the fielded systems have a sufficient operational lifespan. Another risk is contractor performance failure (delivery delays, quality issues), which is mitigated by the firm-fixed-price structure (incentivizing contractor performance) and the competitive award process. Supply chain disruptions for specialized components could also pose a risk, requiring robust supplier management by BAE Systems. Finally, ensuring interoperability with existing and future Army systems is crucial, managed through rigorous testing and adherence to technical standards.

What is the expected effectiveness of these thermal weapon sights in enhancing soldier capabilities?

Thermal weapon sights are designed to significantly enhance a soldier's ability to detect, identify, and engage targets in various battlefield conditions, including low light, darkness, and obscurants like smoke or fog. They provide a thermal signature of objects, allowing soldiers to 'see' heat. This capability improves situational awareness, reduces fratricide risk, and increases engagement accuracy, particularly at longer ranges or in complex environments. The effectiveness is directly tied to the quality of the optics, sensor resolution, processing algorithms, and the integration with the soldier's weapon system. The $158 million investment suggests a substantial quantity or advanced capability is being procured, aiming for a significant improvement in soldier effectiveness.

How has spending on thermal weapon sights by the Department of the Army trended over the past five years?

Analyzing historical spending trends for thermal weapon sights by the Department of the Army requires access to detailed procurement data beyond this single contract. This contract, awarded in 2008, represents a past investment. To understand current trends, one would need to examine more recent awards for similar systems, including other types of weapon sights (night vision, red dot, etc.) and related electro-optical/infrared (EO/IR) equipment. Factors influencing spending include evolving military doctrine, technological advancements, operational tempo, and budget allocations. A comprehensive analysis would involve aggregating data from multiple contracts over several fiscal years to identify patterns of increased or decreased investment in this capability area.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 2 FORBES RD, LEXINGTON, MA, 05

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $158,023,030

Exercised Options: $158,023,030

Current Obligation: $158,023,030

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB07D0030

IDV Type: IDC

Timeline