BAE Systems awarded $128M for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $128,183,930 ($128.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-25

End Date: 2023-11-30

Contract Duration: 1,527 days

Daily Burn Rate: $83.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BIG SAFARI

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $128.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: BIG SAFARI Key points: 1. Contract awarded through a sole-source mechanism, limiting price discovery. 2. Significant contract value suggests potential for substantial taxpayer investment. 3. Lack of competition may indicate limited market availability or strategic sourcing. 4. Performance period spans over four years, requiring sustained oversight. 5. The contract falls under 'Other Aircraft Parts' manufacturing, a specialized sector. 6. No small business set-aside was utilized, impacting small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this $128 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if alternative solutions could have been procured at a lower cost. The duration of the contract and the specific nature of the 'Other Aircraft Parts' suggest specialized requirements, but the absence of competition prevents a robust value-for-money assessment against industry benchmarks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition means that multiple bidders were not considered, which can limit the government's ability to negotiate the best possible price and may not fully leverage the market's potential for innovation or cost savings.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price reductions typically driven by competitive bidding processes. This can result in less efficient use of public funds.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving essential aircraft parts. This contract supports the maintenance and operational readiness of Air Force aircraft. The contract's impact is primarily within the defense industrial base, supporting specialized manufacturing. Workforce implications are likely concentrated within BAE Systems' manufacturing facilities in New Hampshire.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in pricing due to non-competitive nature.
Potential for cost overruns if not closely monitored.
Limited opportunities for small businesses to participate as prime contractors.

Positive Signals

Award to an established defense contractor suggests a degree of reliability.
Long-term contract provides stability for supply chain and operations.
Specific nature of parts may require specialized expertise only available from the contractor.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a critical component of the aerospace and defense industry. This contract, valued at $128 million, represents a significant investment within this niche. While specific market size data for this sub-sector is not readily available, the overall aerospace manufacturing market is substantial. This contract likely supports specialized components essential for maintaining the Air Force's fleet, fitting within the broader landscape of defense procurement.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this significant defense procurement are limited to potential lower-tier supplier roles, rather than prime contracting. The absence of a small business focus in this award may not contribute to the growth or participation of small businesses within the defense industrial base for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Given its sole-source nature, enhanced scrutiny on performance metrics and cost justification would be crucial. Transparency regarding the justification for the sole-source award and ongoing performance monitoring are key accountability measures. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency Contracts
Air Force Sustainment Programs
Sole-Source Defense Procurements

Risk Flags

Sole-source award may lead to higher costs.
Lack of competition limits price discovery.
Potential for performance issues in specialized manufacturing.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $128.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. BIG SAFARI

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 $128.2 million.

What is the period of performance?

Start: 2019-09-25. End: 2023-11-30.

What is the specific justification provided by the Department of the Air Force 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 under circumstances where only one responsible source can provide the required supplies or services, such as unique capabilities, proprietary technology, or urgent needs where competition is not feasible. A thorough review of the contract's justification documentation would be necessary to understand the rationale. Without this, it's difficult to assess if alternative solutions were adequately explored or if the sole-source determination was appropriate, potentially impacting the government's ability to secure competitive pricing.

How does the awarded amount of $128 million compare to historical spending on similar aircraft parts or contracts with BAE Systems?

The provided data indicates a total award of $128,183,930 for this specific contract. To compare this to historical spending, one would need access to historical contract databases and search for similar 'Other Aircraft Parts' procurements, particularly those awarded to BAE Systems or its subsidiaries. Without this comparative data, it is challenging to determine if this award represents an increase, decrease, or is in line with previous spending patterns for comparable goods or services. Analyzing trends in pricing and volume over time would provide better context for value assessment.

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

The provided data does not specify the key performance indicators (KPIs) or deliverables for this contract. Typically, such contracts would outline specific requirements for the aircraft parts, delivery schedules, quality standards, and potentially technical performance metrics. The Department of the Air Force would be responsible for monitoring BAE Systems' adherence to these terms. The effectiveness of oversight and performance measurement is crucial, especially for sole-source contracts, to ensure that the government receives the intended value and that the contractor meets all contractual obligations.

What is the risk profile associated with BAE Systems as a contractor for this type of specialized aircraft part?

BAE Systems is a major defense contractor with extensive experience in aerospace and defense manufacturing. As such, their track record generally suggests a capacity to handle complex projects. However, the risk profile for any specific contract depends on factors like past performance on similar contracts, financial stability, and adherence to delivery schedules and quality standards. For this particular contract, the primary risks might stem from the sole-source nature (potential for cost escalation) and the specialized technical requirements of the 'Other Aircraft Parts,' which could introduce supply chain or manufacturing challenges if not managed effectively.

Are there any known issues or concerns regarding the quality or reliability of 'Other Aircraft Parts' manufactured by BAE Systems or within this sector?

The provided data does not contain information on specific quality or reliability issues related to 'Other Aircraft Parts' manufactured by BAE Systems or within this sector. General industry standards and rigorous quality control processes are expected for defense contractors. However, any issues would typically be documented through contract performance reviews, quality assurance reports, or potentially through government accountability offices like the Government Accountability Office (GAO) or Inspector General (IG) if significant problems arise. Without specific reports or data, it's presumed that the contractor is meeting required quality standards.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment 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: 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, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $128,183,930

Exercised Options: $128,183,930

Current Obligation: $128,183,930

Actual Outlays: $2,521,604

Subaward Activity

Number of Subawards: 139

Total Subaward Amount: $58,588,618

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3028

IDV Type: BOA

Timeline