DoD's $137.6M thermal weapon sights contract awarded to BAE Systems, highlighting optical instrument manufacturing

Contract Overview

Contract Amount: $137,583,977 ($137.6M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2009-03-06

End Date: 2010-11-30

Contract Duration: 634 days

Daily Burn Rate: $217.0K/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 $137.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: THERMAL WEAPON SIGHTS Key points: 1. Value for money assessed through pricing against market benchmarks and comparable contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract type and duration, with performance context from prior awards. 4. Performance context is derived from the contract's duration and firm-fixed-price structure. 5. Sector positioning within the defense industry, specifically optical instrument manufacturing. 6. Contract awarded under Other Defense purchase category, suggesting specific tactical equipment.

Value Assessment

Rating: fair

The contract value of $137.6 million for thermal weapon sights appears substantial. Benchmarking against similar contracts for advanced optics in defense is crucial to determine if the pricing reflects fair market value. The firm-fixed-price structure suggests that cost overruns are primarily the contractor's responsibility, which can be a positive indicator if the initial price was competitive. However, without detailed cost breakdowns or comparisons to contemporary procurements of similar systems, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of three bidders, as indicated by the 'no' field, points to a degree of competition. A robust competitive process generally leads to better price discovery and potentially lower costs for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for public funds.

Public Impact

Service members in the Department of Defense benefit from advanced thermal weapon sight technology. The contract delivers critical optical equipment for enhanced situational awareness and targeting capabilities. Geographic impact is national, supporting defense operations across various theaters. Workforce implications include specialized manufacturing roles in optical instrument production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price creep if initial estimates were not thoroughly vetted.
Dependence on a single contractor for a critical defense capability.
Risk of technological obsolescence if not managed proactively.
Ensuring sustained performance and reliability of complex optical systems.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm-fixed-price contract type limits government cost exposure.
BAE Systems is a known defense contractor with relevant experience.
Contract duration provides a period for sustained supply and potential follow-on opportunities.

Sector Analysis

The defense sector, particularly within the realm of specialized optics and electronics, is characterized by high R&D investment and stringent performance requirements. This contract for thermal weapon sights falls under the broader category of defense electronics and optical instruments, a market segment driven by technological advancements and the need for superior battlefield capabilities. Comparable spending benchmarks would involve analyzing other procurements of advanced targeting systems and night vision equipment by military branches.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large prime contractor, BAE Systems. The impact on the small business ecosystem would depend on whether BAE Systems engages small businesses as subcontractors for components or specialized services related to the thermal weapon sights. Without specific subcontracting plans, it's difficult to assess the direct benefit to small businesses from this particular award.

Oversight & Accountability

Oversight for this Department of Defense contract would typically involve contracting officers, program managers, and potentially Inspector General (IG) offices. Accountability measures are embedded in the firm-fixed-price contract type, which places the cost risk on the contractor. Transparency is generally maintained through contract award databases and reporting requirements. The specific oversight mechanisms would be detailed in the contract's terms and conditions, ensuring compliance with federal acquisition regulations.

Related Government Programs

Night Vision Systems
Targeting and Fire Control Systems
Defense Electronics Procurement
Optical Instrument Manufacturing
Tactical Equipment Acquisition

Risk Flags

Potential for technological obsolescence given rapid advancements in optics.
Contract duration may limit flexibility in adopting newer technologies.
Dependence on a single supplier for critical defense equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $137.6 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 $137.6 million.

What is the period of performance?

Start: 2009-03-06. End: 2010-11-30.

What is the historical spending trend for thermal weapon sights by the Department of the Army?

Analyzing historical spending for thermal weapon sights by the Department of the Army requires access to detailed procurement data over several fiscal years. While this specific contract represents a significant outlay of $137.6 million, understanding the broader trend involves examining prior awards for similar systems, including their values, contract types, and durations. Trends might reveal increasing investment in advanced optics, shifts in technology preferences, or consolidation among key suppliers. Without a longitudinal dataset, it's difficult to ascertain if this award is part of a growing, stable, or declining spending pattern for these critical defense assets. Further analysis would involve querying federal procurement databases for all contracts categorized under thermal weapon sights or related optical targeting systems awarded to the Army.

How does the awarded price per unit compare to industry benchmarks for similar thermal weapon sights?

Determining the awarded price per unit requires dividing the total contract value ($137,583,976.94) by the number of units procured. However, the number of units is not provided in the given data. Assuming 'no' (3) refers to the number of bids, not units, we cannot calculate a per-unit cost. If we could obtain the unit count, comparing this to industry benchmarks would involve researching market research reports, competitor pricing for similar systems, and potentially data from other government agencies that have procured comparable thermal weapon sights. Factors like technological sophistication, range, resolution, and durability significantly influence per-unit costs. A firm-fixed-price contract suggests the government sought to lock in a price, but its competitiveness hinges on the accuracy of the initial cost estimates and the effectiveness of the competition.

What is BAE Systems' track record with Department of Defense contracts for optical and electronic systems?

BAE Systems is a major defense contractor with a substantial portfolio of contracts across various defense domains, including electronics, aerospace, and naval systems. Their track record with the Department of Defense for optical and electronic systems is extensive. They have been involved in numerous awards for advanced sensor systems, targeting pods, electronic warfare suites, and communication equipment. For thermal weapon sights specifically, BAE Systems has a history of developing and supplying such technology. Evaluating their track record involves reviewing past performance evaluations, any contract disputes or terminations, and their success rate in winning competitive bids for similar systems. Their established presence suggests a capacity to deliver complex systems, but each contract requires specific performance scrutiny.

What are the key performance indicators (KPIs) for this thermal weapon sights contract?

Key Performance Indicators (KPIs) for a contract like this, involving the supply of thermal weapon sights, would typically focus on aspects critical to military effectiveness and operational readiness. These could include: 1. Reliability: Mean Time Between Failures (MTBF) rates for the sights under various environmental conditions (temperature, humidity, shock). 2. Performance Specifications: Meeting or exceeding defined parameters for detection range, image clarity (resolution), target identification capabilities, and battery life. 3. Delivery Schedule: Adherence to delivery timelines for all units, ensuring timely fielding to operational units. 4. Quality Assurance: Compliance with stringent military quality standards and defect rates. 5. Maintainability: Ease of repair and availability of spare parts. While not explicitly stated in the provided data, these KPIs would be detailed in the contract's Statement of Work (SOW) and Quality Assurance Surveillance Plan (QASP).

How does the contract duration of 634 days impact the government's ability to adapt to new technologies?

The contract duration of 634 days (approximately 21 months) for the delivery of thermal weapon sights presents a balance between providing a stable supply chain and allowing for technological evolution. On one hand, this duration ensures a consistent flow of equipment to meet current operational needs. On the other hand, the defense technology landscape, particularly in optics and electronics, evolves rapidly. A contract of this length might mean that by the time the final units are delivered, newer, more advanced technologies could be emerging or already available. To mitigate this, the government often incorporates clauses for technical refresh or allows for early termination for convenience if significantly superior technology becomes available and cost-effective to pursue. Furthermore, the contracting strategy might involve shorter-term production contracts coupled with ongoing research and development efforts to stay ahead of technological curves.

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: $137,583,977

Exercised Options: $137,583,977

Current Obligation: $137,583,977

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB07D0030

IDV Type: IDC

Timeline