DoD awards $48.7M for optical instruments, with BAE Systems securing the contract

Contract Overview

Contract Amount: $48,742,580 ($48.7M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2010-03-24

End Date: 2011-11-30

Contract Duration: 616 days

Daily Burn Rate: $79.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MWTS

Place of Performance

Location: LEXINGTON, MIDDLESEX County, MASSACHUSETTS, 02421

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $48.7 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: MWTS Key points: 1. Contract value represents a significant investment in specialized optical equipment. 2. Competition dynamics suggest a potentially competitive bidding process for this type of specialized manufacturing. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. Contract duration of over 600 days indicates a substantial project scope. 5. The award falls within the optical instrument and lens manufacturing sector, a niche but critical area. 6. Small business participation was not a stated requirement, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: good

The contract value of $48.7 million for optical instruments appears reasonable given the specialized nature of the products. Benchmarking against similar contracts for advanced optical systems is challenging without more specific product details. However, the firm fixed-price structure suggests that the initial pricing was deemed acceptable and aimed at cost certainty for the Department of Defense. The contract's duration and scope imply a significant procurement, and the price should be evaluated in the context of technological complexity and required performance specifications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this specialized requirement. While not a large number, it implies that multiple companies possessed the capability and interest to pursue this contract, which is generally positive for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, generally benefits taxpayers by encouraging competitive pricing and ensuring that the government explores a range of options before awarding a contract.

Public Impact

The Department of Defense is the primary beneficiary, receiving advanced optical instruments essential for its operations. This contract supports the manufacturing of specialized optical equipment, likely for surveillance, targeting, or communication systems. The geographic impact is primarily centered around the contractor's facilities, but the end-use of the equipment could be global. The contract supports jobs within the advanced manufacturing and defense technology sectors, specifically in optical instrument and lens manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited visibility into the specific technological advancements or proprietary processes used by the contractor.
Dependence on a single contractor for a critical component could pose supply chain risks if not managed proactively.

Positive Signals

Firm fixed-price contract provides cost certainty and reduces the risk of budget overruns for the government.
Awarded through full and open competition, suggesting a robust process for selecting the best value offer.
The contract is for a defined period, allowing for reassessment of needs and potential re-competition in the future.

Sector Analysis

The optical instrument and lens manufacturing sector (NAICS 333314) is a specialized segment of the broader manufacturing industry. It encompasses companies that produce scientific and technical instruments, including optical devices, lenses, and related components. This sector is characterized by high technological barriers to entry, significant R&D investment, and often serves niche markets within defense, healthcare, and research. Spending in this area is typically driven by specific technological requirements and national security needs, making it distinct from mass-produced goods.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This suggests that the requirement was likely for capabilities or production volumes best met by larger, established firms in the defense sector. While this may not directly impact small businesses through subcontracting on this specific award, it highlights that opportunities for small businesses in this particular niche might be limited unless specifically targeted through set-aside programs or prime contractor subcontracting plans.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms for procurement and contract management. Accountability is maintained through the firm fixed-price structure, which incentivizes the contractor to meet specifications within the agreed budget. Transparency is generally provided through contract award databases, though specific details of performance and technical specifications may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) research into optical technologies
Night Vision and Electronic Sensors Directorate (NVESD) procurements
Tactical Optics and Photonics programs
Intelligence, Surveillance, and Reconnaissance (ISR) equipment procurement

Risk Flags

Contract awarded to a single large prime contractor.
Limited number of bidders (3) for a specialized requirement.
No explicit small business set-aside noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.7 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. MWTS

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 $48.7 million.

What is the period of performance?

Start: 2010-03-24. End: 2011-11-30.

What specific types of optical instruments were procured under this contract?

The provided data indicates the contract falls under NAICS code 33314, 'Optical Instrument and Lens Manufacturing.' However, it does not specify the exact types of optical instruments. Given the Department of Defense as the agency and BAE Systems as the contractor, these instruments likely serve advanced military applications such as targeting systems, surveillance equipment, night vision devices, or specialized communication optics. Further details would require access to the contract's statement of work or technical specifications, which are often not publicly disclosed due to security or proprietary concerns.

How does the $48.7 million contract value compare to typical spending on similar optical systems by the DoD?

Benchmarking the $48.7 million contract value against typical DoD spending on similar optical systems is challenging without more granular data on the specific capabilities and quantities procured. The DoD procures a wide range of optical systems, from basic binoculars to highly sophisticated sensor arrays for aircraft and satellites, with costs varying dramatically. However, for complex, custom-developed or high-performance military-grade optical systems, a contract value in the tens of millions of dollars is not uncommon. The firm fixed-price nature suggests a defined scope, and the value should be assessed against the technological sophistication and operational criticality of the delivered items.

What is BAE Systems' track record with similar DoD contracts for optical equipment?

BAE Systems is a major defense contractor with extensive experience across various defense technology sectors, including electronics, aerospace, and intelligence systems. While specific details on their historical performance solely for optical instruments under this exact NAICS code are not provided, the company frequently engages in contracts involving advanced sensor technology, electro-optical systems, and related components for military applications. Their broad portfolio suggests a strong capability to deliver complex systems. A deeper analysis would involve reviewing their contract history for related product categories and performance ratings on past DoD awards.

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

Potential risks include technological obsolescence, performance shortfalls, and supply chain disruptions. Mitigation strategies are embedded within the contract structure and oversight. The firm fixed-price (FFP) type contract shifts much of the cost risk to the contractor, incentivizing them to manage expenses effectively. The contract duration of 616 days allows for phased delivery and testing, enabling early identification of performance issues. Furthermore, the award through full and open competition suggests that multiple technically capable vendors were evaluated, reducing the risk of selecting a contractor unable to meet requirements. DoD oversight throughout the contract lifecycle is also a key risk mitigation factor.

How does the competition level (3 bidders) impact the value for taxpayers?

A competition level with 3 bidders for a specialized contract like this generally indicates a reasonable, though not intensely high, level of market interest. While more bidders could potentially drive prices lower, 3 offers suggest that the market for these specific optical instruments is not overly concentrated or limited. This level of competition allows for price discovery and provides the government with options, likely resulting in a fair market price. However, it also means that the potential for further price reductions through broader competition might exist, depending on the specific market dynamics and barriers to entry for other potential suppliers.

What is the historical spending trend for optical instrument and lens manufacturing by the Department of Defense?

Historical spending trends for optical instrument and lens manufacturing by the Department of Defense are not detailed in the provided data. However, it is reasonable to infer that spending in this category is driven by evolving military technology requirements, particularly in areas like intelligence, surveillance, reconnaissance (ISR), targeting, and situational awareness. Periods of increased geopolitical tension or technological advancement often correlate with higher investment in advanced optical systems. Analyzing historical spending would require accessing broader DoD procurement databases and filtering for relevant NAICS codes or product service codes over multiple fiscal years.

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: $48,742,580

Exercised Options: $48,742,580

Current Obligation: $48,742,580

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB07D0030

IDV Type: IDC

Timeline