DoD's $192M BAE Systems contract for aircraft parts awarded via sole-source justification

Contract Overview

Contract Amount: $192,183,363 ($192.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2023-11-30

End Date: 2027-03-31

Contract Duration: 1,217 days

Daily Burn Rate: $157.9K/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 $192.2 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 potential price overruns and limited market engagement. 2. The contract's duration of over 3 years suggests a long-term need for these specialized aircraft parts. 3. BAE Systems, a major defense contractor, is the sole awardee, indicating a potentially concentrated supplier base. 4. The firm-fixed-price structure aims to control costs, but the lack of competition may undermine this. 5. Performance is tied to New Hampshire, suggesting a localized economic impact and workforce reliance. 6. The contract falls under the 'Other Aircraft Parts' manufacturing NAICS code, highlighting its specific industrial focus.

Value Assessment

Rating: questionable

Without competitive bids, it is difficult to benchmark the value for money. The $192 million award over approximately 3.3 years suggests a significant per-year spend. Comparisons to similar sole-source contracts for specialized aircraft components would be necessary to assess if the pricing is reasonable. The lack of competition inherently limits the government's ability to secure the best possible price and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs 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 price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The government's negotiating position is weakened without alternative offers.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially military aviation readiness. The contract delivers essential 'Other Aircraft Parts and Auxiliary Equipment' crucial for maintaining aircraft. The geographic impact is concentrated in New Hampshire, where BAE Systems' facility is located. This contract supports specialized manufacturing jobs within the defense industrial base in New Hampshire.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value for taxpayers.
Lack of transparency in the justification for sole-source award.
Reliance on a single contractor for critical aircraft components could pose supply chain risks.
Long contract duration may not allow for adjustments to market price fluctuations.
No indication of small business subcontracting goals or achievements.

Positive Signals

Firm-fixed-price contract type helps to establish cost certainty.
BAE Systems is a known entity with experience in defense manufacturing.
Contract duration provides stability for critical supply chain needs.
Award supports domestic manufacturing and specialized workforce.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components is often characterized by high barriers to entry due to technical expertise, certifications, and established relationships with prime contractors. Spending in this sub-sector is driven by military readiness requirements and the lifecycle sustainment of aging aircraft fleets. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar high-value, specialized components within the DoD.

Small Business Impact

The contract data indicates that this award was not set aside for small businesses (sb: false) and there is no indication of a small business subcontracting plan (ss: false). This suggests that the primary contractor, BAE Systems, is expected to fulfill the contract requirements directly or through its own supply chain, rather than actively engaging small businesses as subcontractors for this specific award. This could limit opportunities for small businesses within the defense supply chain related to this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, with justifications for this approach typically reviewed internally. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency (DLA) Contracts
Air Force Sustainment Programs
BAE Systems Defense Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award without clear justification
Potential for inflated pricing due to lack of competition
Supply chain dependency on a single contractor
Limited transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $192.2 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 $192.2 million.

What is the period of performance?

Start: 2023-11-30. End: 2027-03-31.

What specific aircraft systems or platforms does this contract support?

The provided data does not specify the exact aircraft systems or platforms that this contract for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' supports. However, given the awardee (BAE Systems) and the awarding agency (Department of the Air Force), it is highly probable that these parts are intended for military aircraft, potentially including fighter jets, bombers, transport planes, or specialized reconnaissance aircraft. BAE Systems is a major supplier of components and systems across various military aviation platforms. Further investigation into the specific product codes or technical descriptions associated with the contract number would be required to identify the precise applications.

What was the justification for awarding this contract on a sole-source basis?

The data explicitly states the contract type as 'NOT COMPETED', which in this context implies a sole-source award. The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source justifications for defense contracts require a formal determination that only one responsible source can meet the government's needs, often due to proprietary technology, unique capabilities, or urgent requirements where competition is not feasible. Such justifications are usually documented and subject to review by contracting officers and potentially higher authorities within the Department of Defense.

How does the total contract value of $192 million compare to typical spending on similar aircraft parts?

Directly comparing the $192 million total contract value to 'typical spending' on similar aircraft parts is challenging without more specific information about the nature of the parts. However, as a sole-source award over approximately 3.3 years, this represents a significant investment by the Air Force. The average annual spend would be around $58 million. This figure should be benchmarked against historical sole-source awards for comparable high-value, specialized components, or against the cost of developing or acquiring similar capabilities through competitive means, if such alternatives exist. The absence of competition makes a direct value-for-money assessment difficult.

What is BAE Systems' track record with the Department of the Air Force for similar contracts?

BAE Systems is a major defense contractor with a substantial history of providing various systems, components, and services to the Department of the Air Force and other military branches. While this specific contract is for 'Other Aircraft Parts,' BAE Systems' broader portfolio includes avionics, electronic warfare systems, aircraft components, and support services. Their track record with the Air Force is extensive, often involving large-value contracts. However, the specifics of their performance on past contracts, particularly those involving sole-source awards or similar component manufacturing, would require a deeper dive into contract databases and performance reviews.

Are there any known risks associated with BAE Systems as a sole supplier for these critical aircraft parts?

As with any sole-source award to a single supplier for critical components, there are inherent risks. These include potential supply chain disruptions if BAE Systems faces production issues, labor strikes, or financial difficulties. There's also the risk of complacency leading to reduced innovation or quality control over the contract's long duration. Furthermore, the lack of competition means the Air Force has limited leverage to negotiate price reductions or seek alternative suppliers if issues arise. The government relies heavily on the contractor's internal controls and performance management to mitigate these risks.

What is the expected impact of this contract on the small business ecosystem within the defense industrial base?

Based on the provided data (sb: false, ss: false), this contract does not appear to have specific small business set-aside provisions or explicit subcontracting requirements mentioned. Therefore, its direct positive impact on the small business ecosystem is likely minimal. While BAE Systems may engage small businesses in its broader supply chain, this particular award does not signal a deliberate effort to channel funds directly to small businesses through set-asides or mandated subcontracting. This could represent a missed opportunity to foster small business participation in critical defense manufacturing.

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 and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $192,183,363

Exercised Options: $192,183,363

Current Obligation: $192,183,363

Subaward Activity

Number of Subawards: 128

Total Subaward Amount: $97,291,983

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862021G4028

IDV Type: BOA

Timeline