BAE Systems awarded $97M for fiber optic towed devices, with limited competition and a long performance period

Contract Overview

Contract Amount: $97,007,612 ($97.0M)

Contractor: BAE Systems Information and Electronic Systems Integration I

Awarding Agency: Department of Defense

Start Date: 2015-12-17

End Date: 2022-06-06

Contract Duration: 2,363 days

Daily Burn Rate: $41.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FRP VI - FIIBER OPTIC TOWED DEVICE IGF::CL::IGF

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $97.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION I for work described as: FRP VI - FIIBER OPTIC TOWED DEVICE IGF::CL::IGF Key points: 1. The contract's value of $97 million over its duration suggests a significant investment in specialized defense technology. 2. Limited competition raises questions about potential price inflation and the optimal use of taxpayer funds. 3. The extended performance period of over 2300 days indicates a long-term need for these devices. 4. The firm-fixed-price structure aims to control costs, but the lack of competition may offset this benefit. 5. This contract falls within the broader category of defense systems manufacturing, specifically for navigation and guidance instruments.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the towed devices' capabilities and market alternatives. However, the $97 million award over nearly seven years, with limited competition, suggests a potentially high per-unit cost. Comparing it to similar, publicly available contracts for specialized defense electronics could reveal if the pricing is in line with industry standards or if the lack of competition has led to inflated costs. The firm-fixed-price nature provides some cost certainty, but the overall value proposition is tempered by the competitive landscape.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed openly, indicating a sole-source or limited competition award. The specific reasons for this limited competition are not detailed but could stem from proprietary technology, unique capabilities, or a lack of alternative suppliers. With only one known awardee, BAE Systems, it's difficult to assess the true market price. The absence of multiple bidders limits the government's ability to negotiate the best possible price and may result in a higher cost than if the contract had been fully and openly competed.

Taxpayer Impact: The limited competition means taxpayers may have paid a premium for these specialized devices. Without a competitive bidding process, there's less pressure on the contractor to offer the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically units requiring advanced search, detection, and navigation capabilities. The services delivered involve the manufacturing and potentially maintenance of specialized fiber optic towed devices crucial for military operations. The geographic impact is likely concentrated within defense installations and operational theaters where these systems are deployed. Workforce implications may include specialized manufacturing and engineering roles at BAE Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of robust competition may lead to higher costs for taxpayers.
Extended contract duration could mask inefficiencies or changing technological needs.
Sole-source or limited competition awards can stifle innovation from other potential suppliers.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
BAE Systems is a known defense contractor with established capabilities.
The contract addresses a specific, likely critical, defense need.

Sector Analysis

This contract falls within the defense electronics sector, specifically focusing on sensor and navigation systems. The North American Industry Classification System (NAICS) code 334511 covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. The market for such specialized defense equipment is often characterized by high barriers to entry, significant R&D investment, and a limited customer base, primarily government entities. Spending in this sub-sector is driven by national security priorities and technological advancements.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was awarded to BAE Systems and there is no indication of small business set-asides. The subcontracting opportunities for small businesses are not detailed but would depend on BAE Systems' procurement practices. Without specific subcontracting plans or goals, the direct impact on the small business ecosystem is unclear, though large defense contracts often involve a tiered supply chain where small businesses can play a role.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring compliance with contract terms and quality standards. The firm-fixed-price nature of the award provides a degree of accountability for cost control. Transparency regarding the specific performance metrics and deliverables would be crucial for assessing program effectiveness, but such details are not provided in the summary data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Systems
Electronic Warfare Systems
Sensor Technology
Defense Manufacturing
Guidance Systems

Risk Flags

Limited Competition
Long Performance Period
Potential for Cost Overruns Due to Lack of Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION I. FRP VI - FIIBER OPTIC TOWED DEVICE IGF::CL::IGF

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $97.0 million.

What is the period of performance?

Start: 2015-12-17. End: 2022-06-06.

What specific capabilities do the fiber optic towed devices provide, and how do they compare to alternative technologies?

The provided data does not specify the exact capabilities of the fiber optic towed devices. However, based on the NAICS code (334511 - Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing), these devices likely enhance the performance of sonar, radar, or other sensing systems by providing a stable, high-bandwidth data link via fiber optics. They could be used for extending sensor range, improving signal quality, or enabling remote deployment of sensitive equipment in challenging environments, such as underwater or in contested airspace. Comparing them to alternative technologies would require understanding their specific application; for instance, if they are for underwater surveillance, alternatives might include autonomous underwater vehicles (AUVs) with integrated sensors or different types of towed arrays. The lack of detailed technical specifications in the provided data makes a precise comparison difficult.

What is the historical spending trend for similar fiber optic towed devices or related systems procured by the Department of Defense?

The provided data focuses on a single contract awarded to BAE Systems. To analyze historical spending trends for similar systems, one would need to access broader federal procurement databases (like USASpending.gov or FPDS) and search for contracts using relevant keywords (e.g., 'towed device', 'fiber optic sensor', 'sonar array', 'navigation system') and NAICS codes (like 334511). Analyzing trends would involve looking at the total dollar value awarded annually for these categories, the number of contracts issued, and the primary contractors involved over several fiscal years. This would help identify whether spending on such technologies is increasing, decreasing, or remaining stable, and whether BAE Systems has been a consistent recipient of such awards or if competition has varied over time. Without this broader dataset, historical context for this specific $97 million contract is limited.

What factors contributed to the decision for limited competition (or sole-source) for this specific contract?

The data explicitly states the contract was 'NOT COMPETED', indicating a limited or sole-source award. The specific justification for this decision is not provided. Common reasons for limited competition in defense contracting include: 1) Unique or proprietary technology developed by a single contractor, making them the only viable source. 2) Urgent and compelling need where only one source can meet the requirement in the necessary timeframe. 3) Requirements for compatibility with existing systems where only one contractor's product can integrate seamlessly. 4) A market research determination that only one responsible source is capable of providing the required supplies or services. Without further documentation (like a Justification and Approval document), the precise reason remains speculative, but it implies a belief by the contracting agency that BAE Systems was the only or best option available.

How does the performance period of 2363 days (approx. 6.5 years) compare to typical contract durations for similar defense systems?

A performance period of approximately 6.5 years for a complex defense system like fiber optic towed devices is relatively long, but not unprecedented, especially for systems requiring extensive development, integration, testing, and sustainment. Typical contract durations can vary significantly. Shorter-term contracts (1-3 years) are common for readily available items or services. Longer-term contracts, often including options, are more frequent for major weapon systems, platforms, or specialized technology development and production where the lifecycle is extended. A duration of this length suggests a long-term strategic need by the Department of Defense for the capabilities these devices offer, potentially encompassing initial production, deployment, and ongoing support or upgrades. It also implies a significant investment and commitment from both the government and the contractor.

What is BAE Systems' track record with the Department of Defense, particularly in the area of navigation and guidance systems?

BAE Systems is a major global defense contractor with a substantial and long-standing relationship with the Department of Defense (DoD). They have a well-established track record in various defense sectors, including electronic systems, naval systems, and aerospace. Specifically within the realm of navigation, guidance, and sensor systems (as indicated by NAICS code 334511), BAE Systems has a history of developing and producing sophisticated equipment. Their portfolio often includes radar systems, electronic warfare capabilities, communication systems, and integrated navigation solutions. While this specific contract highlights their role in towed devices, it aligns with their broader expertise in complex electronic and sensor systems for military applications. Their extensive experience suggests a high level of technical capability and program management proficiency, though like any large contractor, they may have faced scrutiny on specific contracts regarding cost or performance.

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: N0001914R0043

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $98,113,516

Exercised Options: $98,113,516

Current Obligation: $97,007,612

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $9,438,215

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline