DoD awards BAE Systems $80.8M for navigation systems, with limited competition

Contract Overview

Contract Amount: $80,826,647 ($80.8M)

Contractor: BAE Systems Information and Electronic Systems Integration I

Awarding Agency: Department of Defense

Start Date: 2012-12-17

End Date: 2015-11-30

Contract Duration: 1,078 days

Daily Burn Rate: $75.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FOR AWARD OF FRP2 AND EXERCISE OF OPTION FRP3

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03061, UNITED STATES OF AMERICA

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $80.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION I for work described as: FOR AWARD OF FRP2 AND EXERCISE OF OPTION FRP3 Key points: 1. Contract value of $80.8M over three years indicates significant investment in navigation technology. 2. Limited competition suggests potential for higher costs and reduced innovation. 3. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 4. The contract supports critical defense capabilities for the Department of the Navy. 5. The award falls within the broader category of defense electronics manufacturing.

Value Assessment

Rating: fair

The contract value of $80.8M for navigation systems appears substantial. Benchmarking against similar contracts for advanced navigation equipment is challenging without more specific details on the system's capabilities and technological sophistication. The fixed-price nature suggests an attempt to control costs, but the limited competition raises concerns about whether the government secured the best possible value. Further analysis of the contractor's historical performance and pricing on similar systems would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed openly, indicating a limited competition approach. The specific reasons for this limitation (e.g., sole-source justification, specific technical requirements) are not detailed in the provided data. A lack of broad competition can lead to less favorable pricing and fewer innovative solutions compared to an open market approach. The government may have relied on existing relationships or unique capabilities of the selected contractor.

Taxpayer Impact: Limited competition can result in taxpayers paying a premium for goods and services, as the absence of multiple bidders reduces downward pressure on prices.

Public Impact

The Department of the Navy benefits from advanced navigation systems essential for operational effectiveness. The contract supports the development and delivery of critical defense hardware. The geographic impact is primarily within the defense industrial base, with potential for New Hampshire-based operations. The contract likely supports a specialized workforce in electronics manufacturing and systems integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to suboptimal pricing for taxpayers.
Lack of open bidding could stifle innovation and limit technology adoption.
Contract duration and value warrant close monitoring for performance and cost overruns.

Positive Signals

Fixed-price contract type provides cost certainty to the government.
Award to an established contractor may ensure reliable delivery of critical systems.
Focus on navigation systems addresses a key military operational requirement.

Sector Analysis

This contract falls within the defense electronics sector, specifically focusing on navigation, detection, and guidance systems. This is a highly specialized area within the broader manufacturing industry, characterized by high R&D investment and stringent performance requirements. The market is often dominated by a few large defense contractors due to the complexity and security demands. Comparable spending benchmarks would typically be found within other major defense procurement programs for similar advanced electronic systems.

Small Business Impact

The provided data indicates that small business participation was not a stated factor in this award (ss: false, sb: false). There is no information on set-asides or subcontracting plans. This suggests the contract was likely awarded directly to a large prime contractor, and any small business involvement would be at the subcontractor level, which is not detailed here. The impact on the small business ecosystem is therefore indirect and not explicitly defined by this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, which incentivizes the contractor to meet specifications within budget. Transparency is limited by the non-competed nature of the award; further details on the justification for limited competition and performance metrics would enhance oversight assessment. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Navigation Systems Procurement
Naval Aviation Electronics
Guidance and Control Systems
Military Sensor Technology
DoD Electronics Manufacturing

Risk Flags

Limited Competition
Lack of Transparency in Justification
Potential for Suboptimal Pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION I. FOR AWARD OF FRP2 AND EXERCISE OF OPTION FRP3

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 $80.8 million.

What is the period of performance?

Start: 2012-12-17. End: 2015-11-30.

What is the specific type of navigation system being procured and its intended application within the Department of the Navy?

The contract data indicates the procurement is for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' (NAICS 334511). While the specific system is not detailed, the NAICS code suggests it relates to advanced equipment used for determining position, course, and speed, likely for naval vessels and/or aircraft. This could encompass radar systems, GPS/INS (Inertial Navigation Systems), sonar, or other sophisticated guidance technologies critical for maritime and aerial operations. The application would be to enhance the operational capabilities, safety, and mission effectiveness of naval platforms.

What was the justification for awarding this contract on a limited competition basis rather than through full and open competition?

The provided data explicitly states the contract was 'NOT COMPETED' (ct: NOT COMPETED). However, the specific justification for this limited competition is not included. Typically, justifications for non-competitive awards include factors such as: only one responsible source exists, urgent and compelling needs, or specific national security requirements that preclude open competition. Without this explicit justification, it is difficult to assess whether the limited competition was appropriate or if it potentially limited the government's ability to obtain the best value. Further investigation into the contract file or agency justifications would be required.

How does the contract value of $80.8M compare to historical spending on similar navigation systems by the Department of the Navy?

Comparing the $80.8M contract value requires access to historical spending data for similar navigation systems procured by the Department of the Navy. This data is not provided. However, $80.8M over approximately three years (based on the award and estimated end dates) represents a significant investment. To benchmark effectively, one would need to identify comparable contracts for advanced radar, inertial navigation, or guidance systems awarded to other contractors or previously to BAE Systems. Factors like technological sophistication, quantity, and contract duration would need to be aligned for a meaningful comparison. The absence of such comparative data makes a definitive value assessment challenging.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this contract?

The provided contract data does not specify the Key Performance Indicators (KPIs) or metrics used to evaluate the success of this contract. Typically, for defense contracts involving complex systems, KPIs would relate to technical performance (e.g., accuracy, reliability, range), delivery schedules, adherence to specifications, and potentially operational readiness. Given the fixed-price nature, meeting all contractual requirements within the agreed price is a primary success indicator. Further details on performance standards and evaluation criteria would likely be found in the contract's statement of work (SOW) or performance work statement (PWS).

What is BAE Systems Information and Electronic Systems Integration's track record with similar defense contracts, particularly with the Department of the Navy?

BAE Systems Information and Electronic Systems Integration is a major defense contractor with a substantial track record, including numerous contracts with the Department of the Navy and other branches of the U.S. military. They are known for producing a wide range of electronic systems, including radar, communications, navigation, and electronic warfare equipment. While specific details on past performance for identical navigation systems are not provided here, their general profile suggests they possess the technical expertise and manufacturing capacity to execute such contracts. A deeper dive into their past performance ratings, any past issues, and their success on previous, similar contracts would provide a more complete picture of their reliability for this specific award.

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: N0001911R0109

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, 03060

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $80,826,647

Exercised Options: $80,826,647

Current Obligation: $80,826,647

Subaward Activity

Number of Subawards: 87

Total Subaward Amount: $38,083,373

Contract Characteristics

Cost or Pricing Data: NO

Timeline