BAE SYSTEMS awarded $34.2M for navigation systems, highlighting a sole-source procurement

Contract Overview

Contract Amount: $34,205,522 ($34.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2006-05-04

End Date: 2014-03-03

Contract Duration: 2,860 days

Daily Burn Rate: $12.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $34.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: Key points: 1. Contract awarded to a single vendor suggests limited market exploration. 2. Long contract duration (8 years) may indicate specialized needs or vendor lock-in. 3. Firm Fixed Price contract type generally offers cost certainty for the government. 4. The award falls within the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. 5. No small business set-aside was applied to this contract. 6. The contract was managed by the Defense Contract Management Agency.

Value Assessment

Rating: fair

Benchmarking the value of this $34.2 million contract is challenging without detailed scope of work and performance metrics. As a sole-source award, there was no competitive pressure to drive down prices. The firm fixed-price structure provides cost predictability, but the absence of competition raises questions about whether the government secured the best possible value. Further analysis would require comparing the delivered systems and their performance against industry standards and similar sole-source procurements.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing the requirement, the government could not leverage market forces to ensure the lowest possible price.

Public Impact

The primary beneficiaries are likely Department of Defense agencies requiring advanced navigation and guidance systems. The contract supports the development and delivery of critical systems for military operations. The geographic impact is primarily associated with BAE Systems' operations in New York. The contract supports specialized engineering and manufacturing roles within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Long contract duration may lead to vendor lock-in and reduced flexibility.
Lack of transparency in sole-source justifications requires careful review.
Potential for cost overruns if scope is not tightly managed under fixed-price.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to established contractor BAE Systems suggests reliance on proven capabilities.
Contract supports critical defense systems, aligning with national security objectives.

Sector Analysis

This contract falls within the "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" sector, a specialized area of the defense industrial base. This sector is characterized by high technological barriers to entry and significant R&D investment. Comparable spending in this niche often involves long-term development cycles and substantial government investment, with major players like BAE Systems holding significant market share due to their expertise and existing infrastructure.

Small Business Impact

This contract did not include a small business set-aside. As a sole-source award to a large prime contractor, there are no direct subcontracting implications for small businesses mandated by this specific award. However, BAE Systems may engage small businesses as subcontractors for specific components or services, but this is not a requirement of the contract itself. The absence of a set-aside means opportunities for small businesses to compete directly for this prime contract were not available.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. As a firm fixed-price contract, the primary oversight focus is on delivery of specified goods and services according to the contract terms. Transparency is limited due to the sole-source nature, but contract award details are publicly available. Inspector General jurisdiction would apply if any fraud or mismanagement were suspected.

Related Government Programs

Defense Navigation Systems
Aeronautical and Nautical Instruments
Military Guidance Systems
BAE Systems Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration may result in outdated technology.
Limited public information on specific system capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. See the official description on USAspending.

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 $34.2 million.

What is the period of performance?

Start: 2006-05-04. End: 2014-03-03.

What is the specific nature of the navigation systems being procured under this contract?

The contract falls under the North American Industry Classification System (NAICS) code 334511, which pertains to "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing." While the specific details of the navigation systems are not provided in the summary data, this classification suggests the procurement relates to advanced equipment used for determining position, course, or location, likely for military aircraft, vessels, or ground systems. This could encompass a range of technologies from inertial navigation systems (INS) and global positioning systems (GPS) to more specialized radar or sonar-based navigation aids critical for defense operations.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's requirements. For a contract valued at $34.2 million in a specialized field like navigation systems, potential justifications could include unique proprietary technology held by BAE SYSTEMS, critical security requirements that only BAE SYSTEMS meets, or a situation where the existing system is so specialized that only the original manufacturer can provide necessary upgrades or replacements. The specific justification for this sole-source award would be documented by the Department of Defense at the time of procurement, often citing reasons such as urgency, lack of adequate competition, or the need for compatibility with existing systems.

How does the firm fixed-price (FFP) contract type mitigate risk for the government?

A Firm Fixed-Price (FFP) contract is designed to provide the government with cost certainty. Under an FFP agreement, the contractor (BAE SYSTEMS in this case) assumes full responsibility for all costs incurred and agrees to a fixed price for the delivery of the specified goods or services. This means that regardless of the contractor's actual costs, the government pays the agreed-upon price. This structure significantly reduces the financial risk for the government, as there are no cost overruns unless the contract scope is formally modified through change orders. It incentivizes the contractor to manage its costs efficiently to maximize profit.

What is the historical spending trend for similar navigation system contracts within the Department of Defense?

Analyzing historical spending trends for similar navigation system contracts within the Department of Defense requires access to detailed procurement databases. However, it is generally understood that spending in this sector is substantial and often characterized by long-term contracts due to the complexity and critical nature of the systems. Contracts can range from research and development to full-scale production and sustainment. Given the sole-source nature of this $34.2 million award to BAE SYSTEMS, it suggests a potentially ongoing or specialized need. Trends often show a consolidation among a few key defense contractors who possess the necessary expertise and security clearances, leading to significant, albeit sometimes less competitively bid, awards in this domain.

What are the potential implications of the long contract duration (2006-2014) for technological relevance?

A contract duration spanning from 2006 to 2014 (8 years) in the field of navigation systems presents potential challenges regarding technological relevance. Technology, especially in defense, evolves rapidly. Systems developed or procured early in this period might be considered less advanced by the end of its term, potentially impacting operational effectiveness or interoperability with newer platforms. However, the nature of the systems (e.g., foundational guidance components) might have a longer lifecycle. The government's strategy likely involved phased upgrades or specific sustainment requirements rather than expecting cutting-edge technology throughout the entire period. The long duration also points to a stable, long-term requirement for these specific systems.

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 (UEI: 217304393)

Address: 450 PULASKI RD, GREENLAWN, NY, 11740

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline