DoD's $628M MRAP Contract with BAE Systems: Full and Open Competition, Firm Fixed Price
Contract Overview
Contract Amount: $627,833,616 ($627.8M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2007-12-18
End Date: 2012-04-30
Contract Duration: 1,595 days
Daily Burn Rate: $393.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CATEGORY II MRAP
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17405
Plain-Language Summary
Department of Defense obligated $627.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: CATEGORY II MRAP Key points: 1. Significant investment in armored vehicle technology. 2. BAE Systems is a major defense contractor. 3. Contract awarded under full and open competition. 4. Firm Fixed Price contract type aims to control costs.
Value Assessment
Rating: good
The total award value of $627.8M over approximately 5 years suggests a substantial program. Without specific unit pricing or comparison to similar MRAP variants, a precise value assessment is difficult, but the scale indicates significant procurement.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating multiple bidders were considered. This competitive process is expected to drive better pricing and value for the government.
Taxpayer Impact: The competitive nature of the award is intended to ensure taxpayer funds are used efficiently for essential military equipment.
Public Impact
Enhances troop protection in combat zones. Supports military operations and readiness. Drives innovation in armored vehicle manufacturing. Contributes to the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope changes.
- Long-term sustainment costs not detailed.
- Dependence on a single supplier for this variant.
Positive Signals
- Competitive award process.
- Firm Fixed Price contract.
- Significant investment in troop safety.
Sector Analysis
This contract falls within the Defense sector, specifically military vehicle manufacturing. Spending benchmarks for similar armored vehicle procurements would be necessary for a detailed comparison, but the amount is substantial.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. The prime contractor, BAE Systems, is a large corporation, suggesting limited direct opportunities for small businesses in this specific prime contract.
Oversight & Accountability
The award was made by the Department of the Navy, part of the Department of Defense, which has established oversight mechanisms for large procurement contracts. The firm fixed price structure provides some cost control.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- High per-unit cost raises value concerns.
- Potential for long-term sustainment costs.
- Dependence on a single manufacturer for this variant.
- Contract duration and potential for scope creep.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, pa, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $627.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. CATEGORY II MRAP
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 Navy).
What is the total obligated amount?
The obligated amount is $627.8 million.
What is the period of performance?
Start: 2007-12-18. End: 2012-04-30.
What was the average per-unit cost for the MRAP vehicles procured under this contract, and how does it compare to industry benchmarks for similar vehicles?
The total award was $627,833,615.70 for 10 units, resulting in an average per-unit cost of approximately $62.8 million. This figure is exceptionally high and likely represents a misunderstanding of the data or a highly specialized variant. Typical MRAP unit costs were significantly lower, often in the $300k-$700k range, depending on the specific model and configuration.
What were the key performance requirements and technical specifications that justified the significant investment in these MRAP vehicles?
The Category II MRAP designation implies a focus on survivability against specific threats, likely roadside bombs and ambushes, in high-risk environments. Key performance requirements would have included advanced armor, blast-resistant seating, and enhanced mobility for off-road terrain. The substantial cost suggests highly specialized protection features and potentially advanced integrated systems.
How effectively did the full and open competition process ensure the best value and technical solution for the Department of Defense's needs?
While full and open competition is generally the best method for ensuring value, the extremely high per-unit cost raises questions about whether the competitive process fully optimized price discovery for this specific procurement. It's possible that unique technical requirements or limited qualified bidders for this advanced variant influenced the final pricing despite the competition.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SEALED BID
Offers Received: 10
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 2890 DE LA CRUZ BLVD, SANTA CLARA, CA, 17
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $627,833,616
Exercised Options: $627,833,616
Current Obligation: $627,833,616
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: M6785407D5025
IDV Type: IDC
Timeline
Start Date: 2007-12-18
Current End Date: 2012-04-30
Potential End Date: 2012-04-30 00:00:00
Last Modified: 2012-04-18
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