DoD's $235M radar systems contract to BAE Systems shows fair value with 3 bidders

Contract Overview

Contract Amount: $234,793,520 ($234.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2016-06-10

Contract Duration: 3,175 days

Daily Burn Rate: $74.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST NO FEE

Sector: Defense

Official Description: RADAR SYSTEMS & EQUIPMENT MANUFACTURING

Place of Performance

Location: FORT WALTON BEACH, OKALOOSA County, FLORIDA, 32548, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $234.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: RADAR SYSTEMS & EQUIPMENT MANUFACTURING Key points: 1. The contract demonstrates a competitive landscape with three bidders, suggesting a reasonable price discovery process. 2. While specific performance metrics are not detailed, the duration and value indicate a significant, long-term need for these radar systems. 3. The 'COST NO FEE' contract type implies that the contractor is reimbursed for actual costs incurred, with profit negotiated separately. 4. The contract's value, while substantial, needs to be benchmarked against similar radar system procurements to fully assess value for money. 5. The absence of small business set-asides suggests this procurement was focused on large prime contractors with specialized capabilities. 6. The contract was awarded by the Department of the Air Force, indicating a focus on aerospace and defense applications.

Value Assessment

Rating: good

The contract's total value of approximately $235 million over its period of performance suggests a significant investment in radar systems. Benchmarking this against similar large-scale radar procurements by the Department of Defense would be necessary for a definitive value-for-money assessment. The 'COST NO FEE' contract type, while common, requires careful oversight to ensure costs are reasonable and allocable. Without specific performance data or detailed cost breakdowns, a precise comparison to market rates is challenging, but the competitive award suggests the pricing was deemed acceptable by the Air Force.

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 three bidders suggests a healthy level of competition for this specialized requirement. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions. The fact that three entities vied for this contract implies that the market for these advanced radar systems is not overly concentrated.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it likely drove down prices and ensured the government received the best possible value for its investment in critical radar technology.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the Department of Defense, receiving advanced radar systems for operational use. The services delivered include the manufacturing and potentially integration of radar systems crucial for search, detection, navigation, and guidance. The geographic impact is primarily within Florida, where the contractor, BAE Systems Technology Solutions & Services Inc., is located, and potentially at Air Force bases where the systems will be deployed. Workforce implications include employment opportunities within BAE Systems and its supply chain, particularly in specialized engineering, manufacturing, and technical roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns under the 'COST NO FEE' contract type if not rigorously monitored.
Dependence on a single prime contractor for a critical defense capability.
Risk of technological obsolescence if the radar systems are not continuously updated or replaced.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Contract awarded to a well-established defense contractor with a track record in technology solutions.
Long contract duration suggests a stable and predictable need for the systems.

Sector Analysis

The contract falls within the 'RADAR SYSTEMS & EQUIPMENT MANUFACTURING' sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high research and development costs, stringent quality requirements, and significant government procurement. The market size for defense electronics, including radar, is substantial, driven by national security needs. This specific contract represents a significant portion of spending within this niche, supporting the development and deployment of advanced surveillance and targeting capabilities.

Small Business Impact

The contract was not set aside for small businesses, as indicated by 'sb': false. This suggests that the requirement likely demanded capabilities and scale typically found in larger defense contractors. While there's no direct set-aside, BAE Systems may engage small businesses as subcontractors for specialized components or services, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The 'COST NO FEE' structure necessitates close monitoring of contractor expenditures to ensure reasonableness and allocability. Transparency is generally maintained through contract reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Radar Procurement
Aerospace Electronics Manufacturing
Search and Detection Systems
Navigation and Guidance Equipment

Risk Flags

Cost Reimbursement Contract Type
Potential for Cost Overruns
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $234.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. RADAR SYSTEMS & EQUIPMENT MANUFACTURING

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $234.8 million.

What is the period of performance?

Start: 2007-10-01. End: 2016-06-10.

What is the historical spending trend for similar radar systems by the Department of the Air Force?

Analyzing historical spending on radar systems by the Department of the Air Force requires access to detailed procurement databases. However, generally, spending in this category can fluctuate based on technological advancements, geopolitical threats, and strategic modernization priorities. Contracts for advanced radar systems are often multi-year and can range from tens to hundreds of millions of dollars, reflecting the complexity and cost of development and manufacturing. Factors such as the specific type of radar (e.g., airborne, ground-based, surveillance, targeting), the number of units procured, and the level of technological sophistication significantly influence the overall expenditure. Without specific data on prior comparable contracts, it's difficult to establish a precise trend, but the consistent need for advanced radar suggests sustained, significant investment over time.

How does the 'COST NO FEE' contract type impact contractor incentives and government oversight?

The 'COST NO FEE' (CNF) contract type, also known as Cost Plus Fixed Fee (CPFF) if a fee is involved, or Cost Reimbursement (CR) if no fee, reimburses the contractor for allowable, allocable, and reasonable costs incurred in performing the contract, plus a negotiated fee (profit). This structure incentivizes the contractor to perform the work but can reduce the incentive to control costs, as the government bears the financial risk. Consequently, it necessitates robust government oversight to scrutinize costs, ensure compliance with contract terms, and prevent overspending. The government must actively monitor expenditures, audit invoices, and verify that all costs are directly related to the contract's objectives. While it allows for flexibility in evolving requirements, it places a greater burden on the government for cost management and performance monitoring compared to fixed-price contracts.

What are the key performance indicators (KPIs) typically associated with radar system contracts?

Key performance indicators (KPIs) for radar system contracts typically focus on technical performance, reliability, and delivery. These can include metrics such as detection range, accuracy (e.g., bearing and range resolution), tracking capabilities (e.g., number of targets, update rate), signal-to-noise ratio, and resistance to electronic countermeasures. Reliability is often measured by Mean Time Between Failures (MTBF) and Mean Time To Repair (MTTR). Delivery timelines and adherence to specifications are also critical. For manufacturing contracts, production quality, defect rates, and adherence to manufacturing process standards are vital. The government often includes specific testing and acceptance criteria that the radar systems must meet before final payment is made.

What is BAE Systems Technology Solutions & Services Inc.'s track record with similar DoD contracts?

BAE Systems Technology Solutions & Services Inc. is a significant defense contractor with a substantial history of performing complex technology and systems integration work for the Department of Defense. Their track record includes numerous contracts related to electronic warfare, command and control systems, sensor development, and other advanced technological solutions. While specific details on past radar system contracts would require deeper database analysis, the company's overall profile suggests they possess the technical expertise, manufacturing capabilities, and security clearances necessary for such procurements. Their extensive experience with the DoD indicates a familiarity with government contracting processes, reporting requirements, and performance expectations, generally positioning them as a reliable partner for large-scale defense projects.

How does the North American Industry Classification System (NAICS) code 334511 inform the nature of this contract?

The NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' precisely defines the industry sector for this contract. It signifies that the procurement is for the manufacturing of equipment used in identifying locations, tracking objects, and guiding vehicles or vessels, particularly within aerospace and maritime contexts. This code encompasses a wide range of sophisticated technologies, including radar, sonar, GPS receivers, inertial navigation systems, and flight control instruments. Contracts under this code typically involve high levels of engineering, precision manufacturing, and rigorous testing to meet stringent performance and reliability standards required for defense and critical infrastructure applications.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA252107R0001

Offers Received: 3

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $267,130,731

Exercised Options: $244,027,436

Current Obligation: $234,793,520

Contract Characteristics

Cost or Pricing Data: NO

Timeline