DoD awards $65M for F-16 AIFF systems, with BAE Systems as sole contractor

Contract Overview

Contract Amount: $64,923,168 ($64.9M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2013-04-19

End Date: 2020-07-01

Contract Duration: 2,630 days

Daily Burn Rate: $24.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT III F-16 APX-125 AIFF CIT

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $64.9 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: ACAT III F-16 APX-125 AIFF CIT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 2630 days suggests a long-term need for these systems. 3. Firm Fixed Price contract type aims to control costs, but sole-source nature may inflate them. 4. The value of this contract is significant within the aerospace electronics manufacturing sector. 5. No small business set-aside was indicated, potentially impacting smaller players in the supply chain.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of detailed cost breakdowns. The $64.9 million awarded over approximately seven years suggests an average annual spend of around $9.3 million. Without comparable sole-source contracts for similar AIFF systems or open competition data, it's difficult to definitively assess if this represents excellent value. However, the firm fixed-price structure provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, BAE Systems, was solicited. This approach bypasses the competitive bidding process typically used to ensure the best price and value for the government. The lack of competition raises concerns about potential price inflation and reduced incentive for the contractor to offer the most cost-effective solution.

Taxpayer Impact: Taxpayers may have paid a premium for these systems due to the absence of competitive pressure. The government missed an opportunity to leverage market forces to secure a lower price.

Public Impact

The primary beneficiaries are the U.S. Air Force F-16 fighter jet fleet, ensuring operational readiness. The contract delivers critical Identification Friend or Foe (IFF) systems essential for air traffic control and combat identification. The contract is geographically focused on New York, where BAE Systems' relevant facility is located. This contract supports specialized jobs in aerospace electronics manufacturing and systems integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the sole-source justification makes it difficult to assess necessity.
Long contract duration without clear performance metrics could lead to complacency.
No small business participation noted, potentially excluding valuable contributors to the defense industrial base.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
BAE Systems is an established defense contractor with experience in relevant systems.
The contract addresses a critical need for operational aircraft systems.

Sector Analysis

This contract falls within the Defense industry, specifically the segment focused on aerospace electronics and avionics manufacturing. The market for such specialized systems is often characterized by high barriers to entry due to technological complexity and stringent qualification requirements. Spending in this area is driven by military modernization programs and the sustainment of existing fleets. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar avionic systems on other platforms.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of significant subcontracting opportunities for small businesses within the provided data. This suggests that the primary contract value will flow to the large prime contractor, BAE Systems. While not uncommon for highly specialized defense systems, it limits the direct economic benefit to the small business ecosystem and reduces opportunities for smaller firms to gain experience and build past performance in this niche.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). The firm fixed-price nature of the contract implies that the government's primary oversight focus will be on ensuring delivery of the specified goods and services according to the contract terms. Transparency is limited due to the sole-source award, making detailed public scrutiny of the procurement process difficult. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

F-16 Fighter Jet Sustainment Programs
Aerospace Electronics Manufacturing
Defense Identification Friend or Foe (IFF) Systems
Avionics Modernization Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.9 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. ACAT III F-16 APX-125 AIFF CIT

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 $64.9 million.

What is the period of performance?

Start: 2013-04-19. End: 2020-07-01.

What is the specific justification for awarding this contract on a sole-source basis to BAE Systems?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, or urgent and compelling needs where competition is not feasible. For this F-16 AIFF system, the justification might stem from BAE Systems possessing unique intellectual property, specialized manufacturing processes, or being the only entity capable of integrating the system seamlessly with the existing F-16 avionics architecture without significant redesign or unacceptable delays. A thorough review of the contract file and associated documentation would be necessary to ascertain the precise rationale.

How does the $64.9 million contract value compare to historical spending on F-16 AIFF systems?

Comparing this $64.9 million contract value to historical spending on F-16 AIFF systems requires access to historical contract data for this specific system or similar components. The contract duration is approximately 7 years (2630 days), suggesting an average annual spend of roughly $9.3 million. Without prior contract awards for the APX-125 AIFF system or comparable systems on the F-16 platform, it's difficult to establish a direct trend. However, if this contract represents a sustainment or upgrade effort, the annual spend might be consistent with ongoing maintenance and modernization costs for complex avionics. A deeper dive into historical procurement databases would be needed for a precise comparison.

What are the key performance indicators (KPIs) or metrics used to evaluate BAE Systems' performance under this contract?

The provided data indicates a 'FIRM FIXED PRICE' contract type, which generally focuses on the delivery of goods or services meeting specified requirements rather than extensive performance-based metrics tied to variable payment. While specific KPIs are not detailed in the summary data, performance evaluation would likely center on adherence to technical specifications, delivery schedules, quality standards, and warranty provisions. The government would monitor for defects, timely delivery of components or systems, and compliance with contractual obligations. The absence of explicit performance incentives in a sole-source fixed-price contract means the primary driver for performance is contractual obligation rather than shared gain.

What is the risk associated with relying on a single contractor (BAE Systems) for these critical F-16 components?

The primary risk associated with relying on a single contractor for critical components like the F-16 AIFF system is the lack of competitive pressure, which can lead to higher prices and potentially reduced innovation or responsiveness. Dependence on BAE Systems also creates a vulnerability if the contractor experiences financial difficulties, production issues, or decides to discontinue the product line. Furthermore, the government has limited leverage to negotiate favorable terms or drive down costs over the long term. This sole-source arrangement necessitates robust government oversight to ensure the contractor upholds its obligations and maintains adequate production capacity and quality.

Are there any plans for future competition or transition to a different system for the F-16 AIFF requirement?

The provided data does not contain information regarding future competition or plans for transitioning to a different system for the F-16 AIFF requirement. This contract, awarded in 2013 and ending in 2020, may have been part of a sustainment strategy for the existing F-16 fleet. Future requirements would depend on the F-16's continued service life, evolving threats, technological advancements in IFF systems, and the Department of Defense's overall modernization strategy. Decisions about future competition or system replacement would typically be made through separate acquisition planning processes, potentially involving market research and analysis of alternatives.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

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: $64,929,594

Exercised Options: $64,929,594

Current Obligation: $64,923,168

Subaward Activity

Number of Subawards: 95

Total Subaward Amount: $10,843,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline