DoD's $136M Radio Frequency Countermeasures contract awarded to BAE Systems shows mixed value and competition

Contract Overview

Contract Amount: $136,402,575 ($136.4M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2015-11-12

End Date: 2021-07-01

Contract Duration: 2,058 days

Daily Burn Rate: $66.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: IGF::OT::IGF RADIO FREQUENCY COUNTERMEASURES (SYSTEM DESIGN)

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $136.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: IGF::OT::IGF RADIO FREQUENCY COUNTERMEASURES (SYSTEM DESIGN) Key points: 1. The contract's value proposition appears fair, with a fixed-price incentive structure aiming to balance cost and performance. 2. Full and open competition was utilized, suggesting a robust market engagement, though the number of bidders is not specified. 3. Potential risks include performance variability inherent in fixed-price incentive contracts and the long duration of the award. 4. This contract falls within the Defense sector, specifically supporting electronic warfare and system integration capabilities. 5. The contractor, BAE Systems, is a major defense contractor with extensive experience in related technologies. 6. No small business set-aside was applied, indicating a focus on large prime contractors for this specialized requirement.

Value Assessment

Rating: fair

The total award value of approximately $136.4 million over a period of roughly 6.7 years suggests a significant investment in radio frequency countermeasures. Benchmarking this against similar system design and integration contracts is challenging without more specific performance metrics and scope details. The fixed-price incentive (FPI) contract type implies that both the government and contractor share in cost savings or overruns, which can incentivize efficiency but also introduces complexity in final cost assessment. The contract's duration and scope suggest a substantial, long-term need for these capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit proposals. While this generally promotes a competitive environment and potentially better pricing, the specific number of bids received is not detailed in the provided data. A high level of competition typically leads to more favorable pricing for the government, but the effectiveness of this competition depends on the number and quality of the proposals submitted.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to secure the best value through market forces. It ensures that multiple companies have the opportunity to compete, potentially driving down costs and improving the quality of the delivered goods or services.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units requiring advanced radio frequency countermeasures for electronic warfare and operational security. The services delivered include system design, development, and potentially integration of sophisticated RF countermeasures. The geographic impact is likely concentrated within defense installations and operational theaters where these systems are deployed. Workforce implications may include specialized engineering, technical, and manufacturing roles within BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long contract duration (over 6 years) increases the risk of cost overruns due to potential changes in technology, requirements, or economic conditions.
Fixed-price incentive contracts can be complex to manage, requiring careful monitoring of performance and cost targets to ensure value.
Reliance on a single large contractor, BAE Systems, could limit future flexibility or innovation if not managed proactively.

Positive Signals

The use of full and open competition suggests a deliberate effort to leverage the broader defense industrial base for optimal solutions.
BAE Systems' established presence and expertise in electronic warfare systems indicate a strong capability to meet the contract's technical demands.
The fixed-price incentive structure, if managed effectively, can align contractor and government interests towards achieving performance goals efficiently.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on electronic warfare and advanced systems manufacturing. The market for radio frequency countermeasures is driven by evolving threats and the need for sophisticated electronic protection and deception capabilities. Spending in this area is significant, with major defense contractors like BAE Systems, Lockheed Martin, and Northrop Grumman being key players. This contract represents a portion of the broader DoD investment in maintaining technological superiority in the electromagnetic spectrum.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the requirement was deemed to be beyond the scope or capability of small businesses, or that the competition was structured to attract large, established defense contractors. Consequently, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor, BAE Systems, may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. The fixed-price incentive (FPI) contract type necessitates close monitoring of performance metrics and cost tracking to manage shared risks and rewards. Transparency is typically maintained through regular reporting requirements and contract performance reviews, with potential for Inspector General (IG) involvement in cases of fraud, waste, or abuse.

Related Government Programs

Electronic Warfare Systems
Radar Systems
Signal Intelligence Systems
Aerospace and Defense Manufacturing
Department of Defense Procurement

Risk Flags

Long contract duration
Complexity of FPI contract type
Potential for scope creep
Dependence on specific technology advancements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $136.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. IGF::OT::IGF RADIO FREQUENCY COUNTERMEASURES (SYSTEM DESIGN)

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 $136.4 million.

What is the period of performance?

Start: 2015-11-12. End: 2021-07-01.

What is the historical spending trend for Radio Frequency Countermeasures (System Design) by the Department of Defense?

Analyzing historical spending trends for 'Radio Frequency Countermeasures (System Design)' requires access to comprehensive federal procurement databases beyond the provided snippet. However, general trends in defense spending indicate a consistent and often increasing investment in electronic warfare (EW) capabilities due to the evolving threat landscape. Factors such as geopolitical tensions, advancements in adversary technologies, and the increasing reliance on the electromagnetic spectrum for military operations drive sustained or growing demand for EW systems, including countermeasures. The provided contract, awarded in 2015 with an end date in 2021, represents a significant single investment within this broader category. To understand the trend, one would need to examine spending patterns over multiple fiscal years, looking at the number of contracts awarded, their total values, and the key contractors involved in this specific domain.

How does the awarded price per unit compare to industry benchmarks for similar RF countermeasures systems?

Determining a precise 'price per unit' for this contract is not feasible with the provided data, as the contract covers 'System Design' and likely involves development, integration, and potentially production of complex systems rather than discrete, easily quantifiable units. The total award value is $136.4 million, with 4 contract actions over a duration of 2058 days (approx. 5.6 years). Without knowing the exact quantity of systems delivered, specific performance characteristics, or the nature of the 'units' (e.g., individual devices, integrated modules, software licenses), a direct cost-per-unit comparison to industry benchmarks is impossible. Benchmarking would require detailed specifications of the system's capabilities (e.g., frequency range, power output, jamming effectiveness, detection range) and comparing that to market rates for comparable technologies from other vendors or similar government contracts.

What is BAE Systems' track record with similar Department of Defense contracts, particularly in electronic warfare?

BAE Systems Information and Electronic Systems Integration Inc. has a substantial track record with the Department of Defense, particularly in the realm of electronic warfare (EW) and related systems. As a major defense contractor, the company consistently secures large-value contracts for advanced technologies. Their portfolio often includes radar systems, electronic attack and protection capabilities, and communication systems. For RF countermeasures specifically, BAE Systems has been involved in developing and supplying systems for various platforms, including aircraft and ground vehicles. Their history suggests a strong technical capability and experience in navigating the complexities of DoD procurement processes. However, like any large contractor, past performance may include both successes and challenges related to cost, schedule, and technical execution on specific programs, necessitating review of individual contract histories.

What are the key performance indicators (KPIs) associated with this contract, and how is performance being measured?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific contract. However, given the nature of a 'RADIO FREQUENCY COUNTERMEASURES (SYSTEM DESIGN)' contract with a Fixed Price Incentive (FPI) type, KPIs would typically revolve around technical performance, schedule adherence, and cost control. Technical KPIs might include metrics related to the effectiveness of the countermeasures (e.g., signal detection range, jamming efficacy, false alarm rates), system reliability, and integration capabilities with existing platforms. Schedule KPIs would focus on meeting key milestones for design, development, testing, and delivery. Cost KPIs would be crucial under the FPI structure, monitoring actual costs against target costs and sharing arrangements. Performance measurement would likely involve regular progress reports, technical reviews, testing and evaluation events, and potentially operational assessments conducted by the DoD.

What is the potential for cost overruns or underruns given the Fixed Price Incentive (FPI) contract type?

The Fixed Price Incentive (FPI) contract type introduces a shared risk/reward mechanism for cost overruns and underruns. In an FPI contract, a target cost and target profit are established. If the final incurred cost is less than the target cost, both the government and the contractor share in the savings according to a pre-negotiated formula (the 'sharing ratio'). Conversely, if the final cost exceeds the target cost, both parties share the overrun, up to a ceiling price. This structure incentivizes the contractor to control costs while meeting performance specifications. Potential for cost overruns exists if the technical challenges prove greater than anticipated, material costs increase unexpectedly, or inefficiencies arise. Conversely, effective cost management and technical success could lead to cost underruns, resulting in shared savings. The specific sharing ratio and ceiling price negotiated are critical determinants of the financial exposure for both parties.

How does this contract's value compare to the overall spending on electronic warfare systems within the DoD?

The $136.4 million awarded for this specific Radio Frequency Countermeasures (System Design) contract represents a significant but likely modest portion of the Department of Defense's overall spending on electronic warfare (EW) systems. The DoD's annual budget for EW capabilities typically runs into the billions of dollars, encompassing a wide array of programs including electronic attack, electronic support, electronic protection, and spectrum management. This contract focuses on a specific aspect – countermeasures system design – which is a critical component of the broader EW ecosystem. While substantial in its own right, it should be viewed within the context of larger platform integrations (e.g., EW suites for fighter jets or naval vessels) and R&D efforts that constitute the bulk of EW investments. Therefore, this contract contributes to, rather than dominates, the DoD's overall EW spending.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

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: $486,177,904

Exercised Options: $136,402,575

Current Obligation: $136,402,575

Subaward Activity

Number of Subawards: 94

Total Subaward Amount: $61,243,814

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline