DoD Awards BAE Systems $1.62 Billion for Guided Missile Systems, No Competition

Contract Overview

Contract Amount: $161,993,839 ($162.0M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc

Awarding Agency: Department of Defense

Start Date: 2023-05-03

End Date: 2025-11-30

Contract Duration: 942 days

Daily Burn Rate: $172.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FRP-12 WGU-59A/B GUIDANCE SECTIONS

Place of Performance

Location: HUDSON, HILLSBOROUGH County, NEW HAMPSHIRE, 03051

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $162.0 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC for work described as: FRP-12 WGU-59A/B GUIDANCE SECTIONS Key points: 1. Significant contract value of $1.62 billion awarded to a single vendor. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. The contract spans over two years, indicating a substantial and ongoing need. 4. The sector is critical for national defense, but procurement methods warrant scrutiny.

Value Assessment

Rating: questionable

The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal. Benchmarking against similar sole-source contracts for guided missile systems would be necessary for a thorough evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive pressure.

Public Impact

Taxpayers may be overpaying for critical defense equipment due to lack of competition. The long duration of the contract could lock in potentially inflated prices. Reliance on a single supplier for such a vital system poses a strategic risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of transparency in pricing
Potential for cost overruns
Limited vendor pool for critical defense assets

Positive Signals

Addresses a critical defense need
Long-term contract provides stability for the supplier

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized and critical area for national defense. Spending in this sector is often characterized by high R&D costs and long procurement cycles, but competition is typically sought to ensure value.

Small Business Impact

The contract was awarded to BAE Systems Information & Electronic Systems Integration Inc., a large defense contractor. There is no indication that small businesses were involved in this specific award, which is common for large, sole-source defense contracts.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight from the Department of Defense and the Defense Contract Management Agency to ensure the contractor is meeting all requirements and that costs are reasonable, despite the lack of competition.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award lacks competitive pricing
Potential for inflated costs over contract duration
Limited transparency in cost justification
Strategic risk due to single supplier dependency
No clear benefit for small businesses

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $162.0 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. FRP-12 WGU-59A/B GUIDANCE SECTIONS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION & 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 $162.0 million.

What is the period of performance?

Start: 2023-05-03. End: 2025-11-30.

What is the justification for awarding this significant contract on a sole-source basis, and what steps are being taken to ensure fair pricing?

The justification for sole-source procurement typically involves unique capabilities, urgent needs, or the unavailability of alternatives. Without competitive bidding, the Department of Defense must rely on rigorous cost analysis and negotiation to ensure fair pricing. This includes detailed audits of the contractor's cost proposals and benchmarking against historical data or similar systems, though transparency is often limited in such cases.

What are the potential risks associated with relying on a single supplier for guided missile systems, especially given the contract's duration?

Sole-source reliance creates significant risks, including supply chain vulnerabilities, potential for price gouging over time, and stifled innovation. If BAE Systems faces production issues or decides to increase prices significantly, the DoD has limited recourse. Furthermore, dependence on one supplier can hinder the adoption of newer, potentially more effective technologies developed by other firms.

How does this contract contribute to the overall effectiveness and readiness of the U.S. military's missile defense capabilities?

This contract directly supports the acquisition and sustainment of critical guided missile systems, essential for national security and military operations. Ensuring a steady supply of these advanced weapons is vital for maintaining strategic deterrence and responding to threats. However, the effectiveness is intrinsically linked to the quality and cost of the systems procured; a sole-source award raises questions about whether the most effective and cost-efficient solutions are being secured.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001918R0018

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 65 RIVER RD, HUDSON, NH, 03051

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: $161,993,839

Exercised Options: $161,993,839

Current Obligation: $161,993,839

Actual Outlays: $187,342

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $17,605,197

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001919D0026

IDV Type: IDC

Timeline