DoD's $142M BAE Systems contract for aircraft parts awarded without competition

Contract Overview

Contract Amount: $142,345,233 ($142.3M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2021-02-05

End Date: 2026-12-31

Contract Duration: 2,155 days

Daily Burn Rate: $66.1K/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 $142.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: BIG SAFARI Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. Significant duration of over 5 years suggests a long-term need for these specialized aircraft parts. 3. The contract's value is substantial, warranting scrutiny of cost-effectiveness and alternative sourcing. 4. Lack of competition limits opportunities for other capable vendors and potentially stifles innovation. 5. The 'Other Aircraft Parts' classification indicates a broad scope, requiring detailed understanding of specific needs. 6. Performance risk is moderate given the established contractor, but oversight is crucial for delivery assurance.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The firm fixed-price structure provides some cost certainty, but the absence of competition means taxpayers may not be receiving the best possible price. A comparison to similar sole-source contracts for specialized aircraft components would be necessary to assess if the pricing is within an acceptable range, though such data is often proprietary. The total value of $142 million over five years necessitates rigorous oversight to ensure all costs are justified.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning the Department of Defense identified BAE Systems as the only responsible source capable of fulfilling the requirement. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no direct price comparison among potential suppliers, potentially leading to higher costs than if the contract had been competed.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from a competitive bidding environment. This can result in higher overall spending for the government on necessary goods and services.

Public Impact

The primary beneficiaries are the U.S. Air Force units requiring specialized aircraft parts for operational readiness. The contract ensures the continued supply of critical components for maintaining specific aircraft platforms. Geographic impact is primarily within the United States, supporting defense logistics and maintenance operations. Workforce implications include continued employment for BAE Systems personnel involved in manufacturing and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Extended contract duration increases exposure to potential cost overruns if not managed tightly.
Lack of transparency in the sole-source justification process.
Potential for vendor lock-in due to specialized nature of parts.

Positive Signals

BAE Systems is an established defense contractor with a track record.
Firm fixed-price contract provides cost predictability.
Contract supports critical national defense requirements.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. Contracts for aircraft parts are essential for maintaining military readiness. This specific contract falls under the 'Other Aircraft Parts' manufacturing NAICS code, indicating a broad category of components. Benchmarking spending in this area is challenging due to the proprietary nature of many specialized parts and the unique requirements of military platforms. However, the overall defense spending on aircraft sustainment is in the billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This means that opportunities for small businesses to participate in this specific contract are likely limited to those that may supply BAE Systems directly, rather than being prime contractors or having direct set-aside awards. The impact on the small business ecosystem is therefore indirect.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a sole-source award, scrutiny on performance, delivery schedules, and cost justification is paramount. Transparency is limited due to the non-competitive nature. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected or reported. The firm fixed-price nature provides some accountability on cost, but delivery and quality remain key oversight areas.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Support
Aerospace Component Procurement
Sole-Source Defense Contracts
BAE Systems Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Extended contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $142.3 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 $142.3 million.

What is the period of performance?

Start: 2021-02-05. End: 2026-12-31.

What is BAE Systems' track record with the Department of Defense for similar sole-source contracts?

BAE Systems is a major defense contractor with extensive experience delivering a wide range of products and services to the Department of Defense. Historically, they have been awarded numerous sole-source contracts, particularly for specialized systems and components where they possess unique capabilities or are the incumbent provider. Analyzing their past performance on similar sole-source awards would involve reviewing contract completion rates, any documented performance issues or disputes, and the overall cost history of those contracts. Without specific data on this contract's predecessors, it's assumed BAE Systems has a substantial, albeit complex, history with the DoD, which includes both successful deliveries and potential areas for scrutiny regarding pricing and efficiency in non-competitive scenarios.

How does the $142 million value compare to other sole-source contracts for aircraft parts?

Directly comparing the $142 million value to other sole-source contracts for aircraft parts is challenging without access to proprietary pricing data and specific component details. However, in the defense sector, contracts of this magnitude for specialized components are not uncommon, especially when dealing with unique platforms or technologies where only one supplier can meet the stringent requirements. The 'Other Aircraft Parts' NAICS code is broad, encompassing a wide array of items. A value of $142 million over five years ($28.4 million annually) suggests a significant volume or high unit cost for these parts. To assess value, one would ideally benchmark against competitively awarded contracts for similar, though not identical, components or against historical pricing trends for the same parts if available.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract are centered around cost and potential lack of innovation. Without competition, there is a reduced incentive for the contractor (BAE Systems) to offer the lowest possible price, potentially leading to higher costs for the government. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier for critical parts, making future transitions or negotiations more difficult. Performance risk, while potentially mitigated by BAE's experience, still exists; delays or quality issues could impact aircraft readiness. Finally, the lack of transparency inherent in sole-source justifications can obscure potential inefficiencies or opportunities for cost savings.

How effective is the 'firm fixed price' contract type in managing costs for this specific requirement?

The 'firm fixed price' (FFP) contract type is generally considered effective in managing costs by shifting the risk of cost overruns to the contractor. For this contract, it means BAE Systems is obligated to deliver the specified aircraft parts for the agreed-upon price, regardless of their actual costs. This provides budget certainty for the Department of the Air Force. However, the effectiveness of FFP in ensuring the *best* price is diminished when the contract is sole-source. While the total price is fixed, the initial negotiation of that price in a non-competitive environment is where potential overpayment can occur. Therefore, while FFP controls cost *variability*, it doesn't guarantee cost *competitiveness* in this context.

What are the historical spending patterns for 'Other Aircraft Parts' by the Department of Defense?

The Department of Defense (DoD) consistently spends billions of dollars annually on aircraft parts and related manufacturing, encompassing a wide range of categories including engines, airframes, avionics, and auxiliary equipment. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) category represents a significant portion of this spending, reflecting the diverse and complex needs of maintaining a vast military aviation fleet. Historical spending within this category has generally trended upwards, driven by modernization efforts, sustainment of aging platforms, and the introduction of new technologies. Sole-source awards are not uncommon within this sector due to the specialized nature of many components and the long-standing relationships between the DoD and established prime contractors like BAE Systems.

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: Ball Corporation

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: $142,345,233

Exercised Options: $142,345,233

Current Obligation: $142,345,233

Subaward Activity

Number of Subawards: 185

Total Subaward Amount: $58,951,752

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