Naval Air Systems Command awarded $331M for communications security equipment, with BAE Systems as the sole contractor

Contract Overview

Contract Amount: $33,108,100 ($33.1M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2006-06-19

End Date: 2008-12-31

Contract Duration: 926 days

Daily Burn Rate: $35.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200609!452307!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905D0027 !A!N! !N!0013 ! !20060619!20081031!083489893!876861790!217304393!N!BAE SYSTEMS !450 PULASKI RD !GREENLAWN !NY!11740!30543!103!36!GREENLAWN !SUFFOLK !NEW YORK !+000005399269!N!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !334419!E! !5!A!S! ! !B!20061231!B!C!Y!A! !D!N!J!1!001!N!1B!Z!Y!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y!1719!N00019!0001! !

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $33.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: 200609!452307!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905D0027 !A!N! !N!0013 ! !20060619!20081031!083489893!876861790!217304393!N!BAE SYSTEMS !450 PULASKI RD !GREENLAWN !NY!11740!30543!103!36!GREENLAWN !SUFF… Key points: 1. Contract awarded for communications security equipment and components. 2. BAE Systems secured the contract, indicating a sole-source or limited competition scenario. 3. The contract duration of over two years suggests a need for sustained supply or development. 4. The award falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 5. This spending is part of the broader Department of Defense's procurement of specialized electronic systems.

Value Assessment

Rating: fair

The contract value of $331 million for communications security equipment over approximately two years requires further benchmarking against similar procurements. Without detailed cost breakdowns or comparisons to market rates for comparable systems, it's difficult to definitively assess value for money. The fixed-price nature of the contract shifts some risk to the contractor, but the lack of competitive bidding limits transparency on pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source or potentially a limited competition scenario where only one offer was solicited or received. The absence of a broad competition limits the government's ability to explore alternative solutions or leverage market dynamics to achieve the best possible price. This approach is typically justified by specific technical requirements, existing system integration, or urgent needs.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving cost savings that might arise from a competitive bidding process. The government relies on the contractor's proposed pricing without the pressure of competing offers to drive it down.

Public Impact

The primary beneficiary is the Department of the Navy, which receives critical communications security equipment. The contract supports the operational readiness and security of naval aviation assets. The geographic impact is centered around BAE Systems' facilities in New York, where the work is likely performed. This contract supports jobs within BAE Systems, contributing to the defense industrial workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and limited innovation.
Sole-source awards can reduce transparency in government spending.
Reliance on a single contractor may create long-term dependencies.

Positive Signals

Firm Fixed Price contract type helps manage cost certainty for the government.
BAE Systems is a known entity in defense contracting, suggesting a degree of reliability.
The contract addresses a specific need for critical security equipment.

Sector Analysis

This contract falls within the defense electronics sector, specifically focusing on communications security equipment. The market for such specialized systems is often characterized by high barriers to entry due to technological complexity and stringent security requirements. Spending in this area is driven by national security needs and the continuous evolution of threats, making it a critical but often less transparent segment of defense procurement.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless BAE Systems voluntarily engages them for subcontracting opportunities. Further investigation into BAE's subcontracting practices would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General of the Department of Defense may also conduct audits or investigations into contract performance and pricing. Transparency is limited due to the sole-source nature, but contract modifications, performance reports, and payment data would be subject to internal review and potentially public disclosure under FOIA, albeit with redactions.

Related Government Programs

Naval Air Systems Command Contracts
Department of Defense Communications Procurement
BAE Systems Defense Contracts
Communications Security Equipment Procurement
Aeronautical and Nautical System Manufacturing

Risk Flags

Sole-source award limits price discovery.
Lack of competition may reduce innovation.
Potential for cost overruns without competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. 200609!452307!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905D0027 !A!N! !N!0013 ! !20060619!20081031!083489893!876861790!217304393!N!BAE SYSTEMS !450 PULASKI RD !GREENLAWN !NY!11740!30543!103!36!GREENLAWN !SUFFOLK !NEW YORK !+000005399269!N!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !334419!E! !5!A!S! ! !B!200

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 Navy).

What is the total obligated amount?

The obligated amount is $33.1 million.

What is the period of performance?

Start: 2006-06-19. End: 2008-12-31.

What is the track record of BAE Systems in delivering similar communications security equipment to the DoD?

BAE Systems, and its predecessor entities, has a long history of providing complex electronic systems, including communications security equipment, to the Department of Defense. They are a major defense contractor with extensive experience in areas like electronic warfare, command and control systems, and secure communications. While specific performance metrics for this particular contract are not detailed here, BAE's general track record suggests they possess the technical capabilities and manufacturing capacity required for such procurements. However, the absence of competition in this award means that performance comparisons are limited to internal assessments or historical data rather than market-driven benchmarks.

How does the $331 million contract value compare to similar procurements for communications security equipment?

Benchmarking this $331 million contract value is challenging without access to detailed specifications and the competitive landscape for similar procurements. Communications security equipment can range widely in complexity and cost, from individual encryption devices to integrated system-wide solutions. Given this was a sole-source award, direct price comparisons are difficult. However, for context, other large sole-source or limited-competition awards for specialized defense electronics can run into hundreds of millions of dollars over their lifecycle. A thorough value assessment would require comparing the system's capabilities, lifespan, and specific technological features against other available or previously procured systems, ideally through a competitive process.

What are the primary risks associated with this sole-source contract award?

The primary risks associated with this sole-source contract are related to cost and innovation. Without competitive pressure, there's a risk that the contractor may not offer the most cost-effective solution, potentially leading to overpricing. The government also misses out on potential innovations or alternative solutions that might have emerged from a broader competition. Furthermore, reliance on a single supplier can create long-term dependencies and reduce flexibility if the contractor's performance falters or if market conditions change. Ensuring robust oversight and clear performance metrics becomes crucial to mitigate these risks.

How effective is the Department of the Navy in ensuring value for money on sole-source contracts like this one?

The effectiveness of the Department of the Navy (DoN) in ensuring value for money on sole-source contracts hinges on its internal processes for cost analysis, negotiation, and oversight. For sole-source awards, the DoN typically relies on mechanisms like contractor cost proposals, audits, and independent government cost estimates to validate pricing. They may also leverage historical pricing data and market research for similar items. However, the inherent lack of direct price competition means that achieving optimal value is more challenging than in a competitive environment. The success often depends on the expertise of the contracting officers and the rigor of their independent assessments.

What are the historical spending patterns for communications security equipment by the Naval Air Systems Command?

Historical spending patterns for communications security equipment by the Naval Air Systems Command (NAVAIR) would likely show a consistent need for such systems to support naval aviation operations. NAVAIR procures a wide array of avionics, electronics, and support equipment, with a significant portion dedicated to secure communications. Spending in this category can fluctuate based on modernization programs, new platform acquisitions, and evolving threat environments. While this specific $331 million award represents a substantial investment, it should be viewed within the broader context of NAVAIR's multi-billion dollar annual procurement budget for aviation systems and support.

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: 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: 450 PULASKI RD, GREENLAWN, NY, 01

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: N0001905D0027

IDV Type: IDC

Timeline