DoD's $67.7M IDECM contract to BAE Systems raises questions on competition and value

Contract Overview

Contract Amount: $67,666,056 ($67.7M)

Contractor: BAE Systems Information and Electronic Systems Integration I

Awarding Agency: Department of Defense

Start Date: 2010-06-28

End Date: 2013-07-31

Contract Duration: 1,129 days

Daily Burn Rate: $59.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: INTEGRATED DEFENSIVE ELECTRONIC COUNTERMEASURES (IDECM) AN/ALE-55 SUBSYSTEM FIBER OPTIC TOWED DEVICE (FOTD) ROUND AND ELECTRONIC FREQUENCY CONVERTER (EFC)- LRIP VI

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03061

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $67.7 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION I for work described as: INTEGRATED DEFENSIVE ELECTRONIC COUNTERMEASURES (IDECM) AN/ALE-55 SUBSYSTEM FIBER OPTIC TOWED DEVICE (FOTD) ROUND AND ELECTRONIC FREQUENCY CONVERTER (EFC)- LRIP VI Key points: 1. The contract's sole-source nature limits price discovery and potentially increases costs for taxpayers. 2. Lack of competition may indicate a lack of market availability or a strategic sourcing decision. 3. Performance context is limited due to the absence of comparative contract data. 4. The firm-fixed-price contract type shifts some risk to the contractor. 5. This spending falls within the defense sector's electronic warfare and countermeasures segment. 6. The contract duration of over three years suggests a significant program commitment.

Value Assessment

Rating: questionable

Benchmarking the value of this $67.7 million contract is challenging without comparable sole-source procurements or detailed cost breakdowns. The absence of competition inherently limits the ability to assess if the pricing reflects market rates or represents a fair value for the IDECM subsystems. Without a competitive bidding process, it's difficult to determine if taxpayers received the best possible price for these critical defense components. Further analysis would require access to cost-plus data or historical pricing for similar sole-source awards.

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 technology, capability, or security clearance, or in cases of urgent need. The lack of competition means that potential cost savings that could arise from a bidding process were not realized. It also suggests a limited market for these specific electronic countermeasures subsystems.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government did not benefit from the price reductions that typically occur when multiple companies vie for a contract.

Public Impact

The primary beneficiaries are the U.S. Navy aircrews who will be equipped with advanced defensive electronic countermeasures. The contract delivers critical subsystems for the Integrated Defensive Electronic Countermeasures (IDECM) system, enhancing aircraft survivability. The geographic impact is national, supporting naval aviation readiness across various deployments. This contract supports specialized manufacturing jobs within BAE Systems, likely in areas related to advanced electronics and defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs.
Lack of transparency in pricing due to non-competitive nature.
Dependence on a single supplier for critical defense technology.

Positive Signals

Firm-fixed-price contract shifts some cost risk to the contractor.
Award to an established defense contractor with existing capabilities.
Supports a critical defense capability for aircraft survivability.

Sector Analysis

This contract falls within the broader defense electronics sector, specifically focusing on electronic warfare and countermeasures. The market for such systems is characterized by high barriers to entry due to specialized technology, stringent security requirements, and long development cycles. Spending in this area is driven by evolving threats and the need for advanced aircraft protection. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar advanced electronic warfare systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary awardee, BAE Systems, will likely perform the majority of the work, with limited direct benefit or opportunity for small businesses within the ecosystem for this specific contract.

Oversight & Accountability

Oversight for this Department of Defense contract would typically fall under the purview of the Department of the Navy's contracting and program management offices. Inspector General investigations could be initiated if fraud, waste, or abuse is suspected. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal DoD oversight.

Related Government Programs

Department of Defense Procurement
Naval Aviation Systems
Electronic Warfare Systems
Integrated Defensive Electronic Countermeasures (IDECM)

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for higher costs
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.7 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION I. INTEGRATED DEFENSIVE ELECTRONIC COUNTERMEASURES (IDECM) AN/ALE-55 SUBSYSTEM FIBER OPTIC TOWED DEVICE (FOTD) ROUND AND ELECTRONIC FREQUENCY CONVERTER (EFC)- LRIP VI

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION I.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $67.7 million.

What is the period of performance?

Start: 2010-06-28. End: 2013-07-31.

What is the track record of BAE Systems in delivering similar electronic warfare systems to the Department of Defense?

BAE Systems is a major defense contractor with a significant history of developing and producing electronic warfare (EW) systems for various military branches, including the U.S. Navy. They are known for their expertise in areas such as radar jamming, electronic countermeasures, and signal intelligence. The company has been involved in numerous large-scale defense programs, often serving as a prime contractor or key subcontractor for complex avionics and EW suites. Their track record includes delivering systems for fighter jets, bombers, and other platforms, indicating a strong capability in this specialized field. However, specific performance metrics and past issues related to on-time delivery, cost overruns, or technical performance on prior EW contracts would require a deeper dive into contract databases and performance reports.

How does the pricing of this contract compare to similar sole-source awards for electronic countermeasures systems?

Direct price comparison for this $67.7 million contract is difficult without access to detailed cost breakdowns and specific technical specifications of comparable sole-source awards. Sole-source contracts inherently lack the competitive pressure that drives down prices, often resulting in higher costs compared to competed contracts. To assess value, one would need to analyze historical sole-source awards for similar IDECM subsystems or related electronic warfare components, considering factors like system complexity, quantity, and technological maturity. Without such comparative data, it's challenging to definitively state whether the pricing is fair or represents a premium due to the lack of competition.

What are the primary risks associated with a sole-source award for critical defense technology like the IDECM subsystem?

The primary risks associated with a sole-source award for critical defense technology are increased cost and reduced innovation. Without competition, the government may pay a premium for the system, as the contractor faces less pressure to offer the most competitive price. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future options or leverage. Furthermore, the absence of multiple bidders can stifle innovation, as there is less incentive for alternative solutions or technological advancements to emerge. Finally, sole-source awards can sometimes be perceived as less transparent, raising concerns about the justification for not competing the requirement.

What is the expected program effectiveness and impact of the IDECM AN/ALE-55 subsystem?

The IDECM AN/ALE-55 subsystem is designed to provide advanced electronic countermeasures capabilities to protect aircraft from radar-guided threats, such as missiles. Its effectiveness is crucial for enhancing pilot safety and mission success in contested airspace. By deploying decoys and employing electronic jamming techniques, the system aims to deceive or disrupt incoming threats, thereby increasing aircraft survivability. The successful implementation of this subsystem is expected to significantly bolster the defensive posture of naval aviation assets equipped with it, contributing to overall force protection and operational readiness. The 'LRIP VI' designation suggests this is a Low Rate Initial Production phase, indicating the system has progressed through development and testing and is moving towards full-rate production.

What has been the historical spending trend for the IDECM program or similar electronic countermeasures over the past five years?

Analyzing historical spending trends for the IDECM program requires access to detailed procurement data beyond this single contract. However, general trends in defense spending indicate a consistent and often increasing investment in electronic warfare (EW) and countermeasures capabilities. As threats evolve, the Department of Defense prioritizes advanced systems to maintain air superiority and survivability. Therefore, it is plausible that spending on programs like IDECM, or similar advanced EW suites, has remained robust or grown over the past five years, reflecting the ongoing need for such technologies. Specific figures would necessitate a review of annual defense appropriations and contract award databases for the relevant period.

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: N0001909R0302

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 65 SPIT BROOK RD, NASHUA, NH, 02

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: $67,666,056

Exercised Options: $67,666,056

Current Obligation: $67,666,056

Contract Characteristics

Cost or Pricing Data: YES

Timeline