DoD's $135M Common IFF Digital Transponder contract awarded to BAE Systems without competition

Contract Overview

Contract Amount: $134,836,819 ($134.8M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2008-09-25

End Date: 2015-09-01

Contract Duration: 2,532 days

Daily Burn Rate: $53.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMMON IFF DIGITAL TRANSPONDER (CXP)

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $134.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: COMMON IFF DIGITAL TRANSPONDER (CXP) Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. Long contract duration of 2532 days suggests a need for sustained support, but also limits flexibility. 3. The firm-fixed-price structure shifts risk to the contractor, which can be beneficial if managed well. 4. Lack of competition may indicate a specialized need or a failure to explore alternative solutions. 5. The contract falls under the Navigation, Guidance, and Control Systems manufacturing NAICS code. 6. Awarded by the Defense Contract Management Agency, indicating a focus on program execution and oversight.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money on this $135 million contract. The firm-fixed-price (FFP) award suggests that the contractor bears the risk of cost overruns, which is generally positive for the government. However, the absence of competition means there's no market-driven validation of the pricing. Comparisons to similar contracts for Identification Friend or Foe (IFF) systems are needed to assess if the pricing is reasonable given the technology and scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This typically occurs when a unique capability is required, or when only one source can fulfill the requirement. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. It also raises concerns about whether a more competitive approach could have been pursued.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive pricing, potentially leading to higher costs than if multiple vendors had vied for the contract. This also reduces transparency in pricing.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical Identification Friend or Foe (IFF) transponder systems. These systems are essential for battlefield situational awareness, enabling friendly forces to identify each other and avoid fratricide. The contract supports the operational readiness of military aircraft and potentially other platforms requiring IFF capabilities. The geographic impact is likely global, supporting deployed military assets, with manufacturing potentially concentrated in New York.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Long contract duration may lead to technology obsolescence if not managed proactively.
Lack of transparency in the procurement process due to sole-source nature.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
BAE Systems is a major defense contractor with established expertise in electronic systems.
The contract addresses a critical defense capability (IFF).

Sector Analysis

The Identification Friend or Foe (IFF) market is a specialized segment within the broader aerospace and defense electronics sector. This contract for digital transponders falls under the Navigation, Detection, and Guidance Systems manufacturing industry. The market is characterized by high technological barriers to entry, stringent government requirements, and a limited number of qualified suppliers. Spending in this area is driven by military modernization programs and the need for interoperable battlefield identification systems. Comparable spending benchmarks would focus on other IFF system procurements or related avionics.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, BAE Systems, is a large defense corporation. There is no explicit information provided regarding subcontracting plans to small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts often involve some level of subcontracting across various tiers.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. As a sole-source award, the justification for this procurement method would be a key area of scrutiny. Transparency is limited due to the lack of competitive bidding. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

DoD Avionics Procurement
Military Identification Systems
Aerospace Electronics Manufacturing
Defense Communication Systems

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $134.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. COMMON IFF DIGITAL TRANSPONDER (CXP)

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 $134.8 million.

What is the period of performance?

Start: 2008-09-25. End: 2015-09-01.

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 procurements are justified when only one responsible source can satisfy the agency's needs. This could be due to proprietary technology, unique capabilities, urgent requirements where only one contractor can respond in time, or a lack of adequate competition. A thorough review of the contract file and associated documentation would be necessary to ascertain the precise rationale. Without this information, it's difficult to assess if alternative, more competitive options were adequately explored or if the sole-source determination was appropriate.

How does the $135 million contract value compare to similar IFF transponder procurements?

Direct comparison of the $135 million total contract value to similar Identification Friend or Foe (IFF) transponder procurements is challenging without access to a broader dataset of comparable contracts. Factors such as system capabilities (e.g., Mode 5 compliance, encryption levels), quantity of units, integration requirements, and contract duration significantly influence pricing. Given this was a sole-source award spanning from 2008 to 2015, it's difficult to establish a precise market benchmark. However, the scale suggests a significant procurement, likely for a substantial fleet or a critical upgrade program. Further analysis would require identifying contracts with similar technical specifications and award dates.

What are the key performance risks associated with a long-duration, sole-source contract for complex electronic systems like IFF transponders?

Key performance risks for a long-duration, sole-source contract include technological obsolescence, where the delivered system may become outdated before the end of its service life, especially given the rapid pace of electronic advancements. Contractor performance risk is also elevated; without competition, there's less external pressure to innovate or maintain high service levels. Furthermore, sole-source awards can lead to 'contractor lock-in,' making it difficult and costly to switch providers if performance issues arise. The government also faces a risk of paying a premium due to the lack of competitive pricing. Effective oversight and robust contract management are crucial to mitigate these risks.

What is the historical spending trend for IFF systems within the Department of Defense?

The provided data focuses on a single contract and does not offer insight into the broader historical spending trends for Identification Friend or Foe (IFF) systems within the Department of Defense. To analyze historical spending, one would need to examine aggregated contract data over multiple fiscal years, looking at various IFF system procurements across different branches of the military (Army, Navy, Air Force, Marines). This would involve identifying trends in contract awards, total obligated amounts, and the number of competitive versus sole-source procurements. Such an analysis could reveal patterns of investment, shifts in technology focus, and the overall budget allocated to IFF capabilities over time.

What is BAE Systems' track record with similar DoD contracts, particularly in electronic warfare and avionics?

BAE Systems is a major global defense contractor with a significant and extensive track record in providing electronic warfare, avionics, and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems to the Department of Defense and other allied nations. They are known for developing and manufacturing a wide range of sophisticated electronic systems for military platforms. While this specific contract for the Common IFF Digital Transponder (CXP) was sole-source, BAE Systems has likely competed for and won numerous other contracts in related areas. Their experience in complex system integration, radar, electronic countermeasures, and communication systems suggests a strong capability relevant to IFF technology. A detailed review of their contract history would reveal specific program successes and challenges.

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

Solicitation ID: N0001907R0098

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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $135,380,533

Exercised Options: $134,836,819

Current Obligation: $134,836,819

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline