DoD's $364M Digital Electronic Warfare System contract awarded to BAE Systems shows limited competition

Contract Overview

Contract Amount: $364,488,915 ($364.5M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2012-04-05

End Date: 2019-03-29

Contract Duration: 2,549 days

Daily Burn Rate: $143.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DIGITAL ELECTRONIC WARFARE SYSTEM (DEWS)

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $364.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: DIGITAL ELECTRONIC WARFARE SYSTEM (DEWS) Key points: 1. The contract's value of over $364 million represents a significant investment in advanced defense technology. 2. Awarded to a single, large defense contractor, this suggests a concentrated market for specialized EW systems. 3. The long duration of the contract (2012-2019) indicates a sustained need for these capabilities. 4. The firm fixed-price structure aims to control costs, but the lack of competition may limit price negotiation. 5. This system is crucial for maintaining information superiority in complex electromagnetic environments. 6. The contract's performance context is within the broader Department of Defense's modernization efforts.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the specialized nature of Electronic Warfare (EW) systems and the limited public data on comparable systems. The total award of over $364 million over several years suggests a substantial investment. Without more information on the specific capabilities delivered and the number of bids received, it's difficult to definitively assess value for money. However, the lack of competition inherently raises concerns about potential overpricing compared to a more robustly competed contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to full and open competition. This typically occurs when a specific technology or capability is only available from one source, or when urgency dictates a rapid award. The lack of multiple bidders means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium for this system due to the absence of competitive pressure to drive down prices. The government's negotiating position is weakened when only one provider can meet the requirement.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units, gaining advanced electronic warfare capabilities. The services delivered include the development, integration, and sustainment of the Digital Electronic Warfare System (DEWS). The geographic impact is likely global, supporting military operations wherever U.S. forces are deployed. Workforce implications include specialized engineering, manufacturing, and technical support roles within BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce government leverage in price negotiations.
Dependence on a single contractor for critical technology poses a supply chain risk.
Limited transparency into the sole-source justification process.

Positive Signals

Award to a large, established defense contractor suggests technical maturity and experience.
Firm fixed-price contract type provides cost certainty for the government.
Sustained award indicates a critical and ongoing need for the capability.
Potential for advanced technological development in a specialized field.

Sector Analysis

The defense electronics sector is characterized by high research and development costs, long product cycles, and significant government procurement. Electronic Warfare (EW) systems are a critical component of modern military operations, focusing on controlling the electromagnetic spectrum. The market is often dominated by a few large prime contractors due to the complexity and security requirements. Spending in this area is driven by evolving threats and the need for technological superiority, with comparable contracts often involving substantial multi-year investments.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless BAE Systems actively engages small businesses in its supply chain. Further investigation into subcontracting plans would be needed to assess the broader impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms and performance standards. The firm fixed-price nature of the contract provides a degree of cost control. Transparency regarding the justification for the sole-source award and the specific performance metrics achieved would be key areas for assessing accountability and oversight effectiveness.

Related Government Programs

Electronic Warfare Systems
Defense Intelligence Systems
Military Communications Systems
Aerospace and Defense Manufacturing
Department of Defense Procurement

Risk Flags

Sole-source award limits competition.
Potential for cost overruns due to lack of competitive pressure.
Dependence on a single contractor for critical technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $364.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. DIGITAL ELECTRONIC WARFARE SYSTEM (DEWS)

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $364.5 million.

What is the period of performance?

Start: 2012-04-05. End: 2019-03-29.

What specific capabilities does the Digital Electronic Warfare System (DEWS) provide to the Department of Defense?

The Digital Electronic Warfare System (DEWS) is designed to provide advanced capabilities for detecting, identifying, and responding to threats in the electromagnetic spectrum. This includes capabilities such as radar warning, electronic support measures (ESM), and potentially electronic attack functions. Its primary purpose is to enhance situational awareness for aircrews and ground forces by understanding and managing the electromagnetic environment, thereby improving survivability and mission effectiveness. The system likely integrates various sensors and processing units to provide a comprehensive electronic warfare picture.

How does the $364 million award compare to other similar EW system contracts?

Direct comparison is difficult without specific system functionalities and contract durations. However, multi-hundred-million-dollar awards are common for complex defense systems like EW suites, especially those involving development, integration, and sustainment over several years. The fact that this was a sole-source award to BAE Systems suggests it might be for a highly specialized or proprietary technology. Generally, competitive awards for similar scope might yield lower total costs due to price pressures, but the unique nature of EW technology can justify significant investment, particularly when addressing evolving threats.

What are the primary risks associated with a sole-source award for a critical defense system like DEWS?

The primary risks associated with a sole-source award include potential for higher costs due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency beyond contract requirements, and increased dependence on a single supplier. This dependence can create supply chain vulnerabilities and limit the government's flexibility if the contractor faces financial difficulties or strategic shifts. Furthermore, the absence of competitive benchmarking makes it harder to ensure the government is receiving the best possible value for its investment.

What is BAE Systems' track record with Department of Defense electronic warfare contracts?

BAE Systems is a major global defense contractor with a significant and long-standing track record in developing and supplying electronic warfare systems and related technologies to the Department of Defense and allied nations. They have been involved in numerous EW programs across various platforms, including aircraft, ships, and ground vehicles. Their extensive experience suggests a high level of technical expertise and program management capability in this specialized domain. The DEWS contract itself, spanning from 2012 to 2019, further demonstrates a sustained relationship and capability delivery.

How has spending on electronic warfare systems evolved within the Department of Defense over the past decade?

Spending on electronic warfare (EW) systems within the Department of Defense has generally seen a significant increase over the past decade. This trend is driven by the recognition of EW as a critical warfighting domain, the proliferation of advanced adversary capabilities, and the need to maintain electromagnetic spectrum superiority. Investments have focused on modernizing legacy systems, developing next-generation EW capabilities (like those potentially represented by DEWS), and integrating EW across different platforms and services. Funding often fluctuates based on perceived threats and technological advancements, but the overall strategic importance of EW has led to sustained and growing budgetary focus.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

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: $365,288,829

Exercised Options: $365,288,829

Current Obligation: $364,488,915

Subaward Activity

Number of Subawards: 217

Total Subaward Amount: $70,071,133

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline