DoD's $99.8M AIFF MODE 5 DMS RESOLUTION contract awarded to BAE SYSTEMS, with significant duration

Contract Overview

Contract Amount: $99,829,402 ($99.8M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-08

End Date: 2026-04-30

Contract Duration: 1,695 days

Daily Burn Rate: $58.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIFF MODE 5 DMS RESOLUTION

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $99.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: AIFF MODE 5 DMS RESOLUTION Key points: 1. Value for money is difficult to assess due to the lack of competition and limited public data. 2. The contract was awarded on a sole-source basis, raising questions about potential price inflation. 3. Risk indicators include the sole-source award and the Cost Plus Fixed Fee pricing structure. 4. Performance context is limited, with no specific details on deliverables or milestones. 5. This contract falls within the Defense sector, specifically related to navigation and guidance systems. 6. The long duration of the contract (nearly 7 years) suggests a critical or ongoing need.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the absence of comparable contract data. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex R&D, can sometimes lead to higher costs if not managed diligently. Without more detailed performance metrics or competitive bids, it's difficult to definitively assess if the government is receiving optimal value for the $99.8 million investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or technology. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without alternative offers, there's less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving critical AIFF MODE 5 DMS RESOLUTION capabilities. This contract supports the development and sustainment of advanced navigation and guidance systems for military aircraft. The contract's impact is primarily within the defense industrial base, supporting specialized manufacturing and engineering roles. Workforce implications include employment for engineers, technicians, and program managers at BAE SYSTEMS and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
CPFF contract type can incentivize cost overruns if not closely monitored.
Long contract duration increases exposure to potential cost increases over time.
Lack of publicly available performance metrics hinders value assessment.

Positive Signals

BAE SYSTEMS is a major defense contractor with a track record in complex systems integration.
The contract addresses a specific, likely critical, defense capability (AIFF MODE 5 DMS RESOLUTION).
The contract has a defined period of performance, allowing for structured oversight.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on electronic systems and instrumentation for navigation and guidance. The market for such specialized defense systems is characterized by high barriers to entry, significant R&D investment, and a limited number of qualified suppliers. Spending in this sub-sector is driven by military modernization efforts and the need for advanced technological capabilities.

Small Business Impact

There is no indication that this contract includes small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal, unless BAE SYSTEMS voluntarily engages small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Given the CPFF structure, rigorous monitoring of costs, performance, and adherence to the statement of work is crucial. Transparency is limited due to the sole-source nature and the proprietary aspects of defense technology. Inspector General involvement would typically be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) programs
Air Force Research Laboratory (AFRL) initiatives
Naval Air Systems Command (NAVAIR) contracts
Army Futures Command programs

Risk Flags

Sole-source award
Cost Plus Fixed Fee pricing
Long contract duration
Limited public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $99.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. AIFF MODE 5 DMS RESOLUTION

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 Air Force).

What is the total obligated amount?

The obligated amount is $99.8 million.

What is the period of performance?

Start: 2021-09-08. End: 2026-04-30.

What is the specific nature of the 'AIFF MODE 5 DMS RESOLUTION' and its importance to the Air Force?

AIFF MODE 5 DMS RESOLUTION likely refers to the Identification Friend or Foe (IFF) Mode 5 Digital Messaging System. Mode 5 is the latest generation IFF system, designed to improve air traffic control and combat identification capabilities by providing encrypted, secure, and more accurate identification signals. The 'DMS RESOLUTION' aspect could pertain to the system's ability to process, interpret, or resolve complex digital messages related to identification. Its importance to the Air Force lies in enhancing situational awareness, preventing fratricide, and ensuring the secure operation of air assets in contested environments. This technology is critical for distinguishing friendly forces from adversaries, especially in complex, multi-domain operations.

Why was this contract awarded on a sole-source basis, and what alternatives were considered?

The sole-source award suggests that the Department of the Air Force determined that only BAE SYSTEMS Information and Electronic Systems Integration Inc. possessed the unique capabilities, technology, or intellectual property necessary to fulfill the requirement for the AIFF MODE 5 DMS RESOLUTION. Justifications for sole-source procurements often cite factors such as highly specialized technical expertise, proprietary technology, or the need for compatibility with existing systems where only one source can provide the required solution. Without access to the specific justification documentation (e.g., a Justification and Approval document), the precise reasons and any alternatives considered remain undisclosed to the public. This lack of transparency is a common characteristic of sole-source defense contracts.

How does the Cost Plus Fixed Fee (CPFF) contract type impact cost control and contractor incentives for this program?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor (BAE SYSTEMS) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex system integration where the scope of work may evolve or is not precisely defined at the outset. For cost control, the government relies heavily on robust oversight of allowable costs and effective negotiation of the fixed fee. Contractor incentives are primarily driven by the desire to complete the work efficiently to maximize the return on their investment, but the 'cost-plus' nature can reduce the incentive to minimize costs compared to fixed-price contracts. Close monitoring by the Air Force is essential to prevent cost overruns and ensure the fixed fee remains appropriate for the effort expended.

What are the potential risks associated with a contract of this duration (1695 days) and value ($99.8M)?

A contract spanning nearly five years (1695 days) and valued at approximately $99.8 million carries several potential risks. Firstly, the extended timeline increases the risk of cost escalation due to inflation, changes in labor rates, or unforeseen material cost increases, especially under a CPFF structure. Secondly, technological obsolescence is a concern; the technology being developed or sustained might become outdated before the contract concludes. Thirdly, performance risks can emerge over time, such as contractor underperformance, quality issues, or delays, which are harder to mitigate effectively over a long period. Finally, the sole-source nature combined with the long duration means the government is locked into this specific vendor, limiting flexibility if better solutions or pricing emerge elsewhere during the contract period.

How does this spending compare to other similar contracts within the Department of Defense for navigation and guidance systems?

Direct comparison of this $99.8 million contract for 'AIFF MODE 5 DMS RESOLUTION' to other DoD contracts is difficult without more specific details on the scope of work and the exact nature of the systems involved. However, spending on advanced navigation, identification, and guidance systems within the DoD is substantial, often running into billions of dollars annually across various platforms (air, sea, land) and programs. Contracts for similar complex electronic warfare, radar, or communication systems can range from tens of millions to hundreds of millions, or even billions, depending on the scale, technology maturity, and production volume. The sole-source nature and the specific focus on IFF Mode 5 suggest this might be a niche but critical capability, making direct dollar-value comparisons potentially misleading without understanding the market dynamics and technological exclusivity.

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: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA823217R0027

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 450 PULASKI RD, GREENLAWN, NY, 11740

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $117,738,654

Exercised Options: $117,738,654

Current Obligation: $99,829,402

Subaward Activity

Number of Subawards: 44

Total Subaward Amount: $4,105,310

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA823217D0027

IDV Type: IDC

Timeline