DoD Awards BAE Systems $176M for ALE-70 Production, Extending to 2028

Contract Overview

Contract Amount: $175,784,686 ($175.8M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-08-30

End Date: 2028-02-29

Contract Duration: 1,278 days

Daily Burn Rate: $137.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALE-70 FRP 6-10 PRODUCTION

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $175.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: ALE-70 FRP 6-10 PRODUCTION Key points: 1. Significant contract value of $175.8M awarded to a single large business. 2. Sole-source award raises concerns about potential lack of competitive pricing. 3. Long contract duration (over 4 years) may limit future market competition. 4. Focus on specialized navigation and guidance systems indicates a niche sector.

Value Assessment

Rating: questionable

The contract's value of $175.8M for ALE-70 production is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits price discovery and competition, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the best possible price for these critical defense systems.

Public Impact

Essential for naval operations, the ALE-70 system plays a crucial role in search, detection, and navigation. The extended contract period ensures continued supply of this specialized equipment for the Navy. Awarding to a single, established contractor suggests a reliance on existing expertise and production capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Long-term contract may reduce future price negotiation leverage.
No small business participation indicated.

Positive Signals

Ensures continued production of critical defense equipment.
Leverages established contractor expertise.
Firm fixed price contract provides cost certainty.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this specialized area is often concentrated among a few key defense contractors due to high technical barriers to entry.

Small Business Impact

The contract data indicates no small business participation (ss: false, sb: false). This is common for large, specialized defense contracts where prime contractors often handle all aspects of production and integration.

Oversight & Accountability

The sole-source nature of this award warrants careful oversight to ensure the contractor is meeting performance requirements and that pricing remains justifiable throughout the contract's duration.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Lack of small business participation
Long contract duration
Potential for price creep without competition
Reliance on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $175.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. ALE-70 FRP 6-10 PRODUCTION

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $175.8 million.

What is the period of performance?

Start: 2024-08-30. End: 2028-02-29.

What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or proprietary technology. The Department of Defense should have documentation outlining this rationale. To ensure fair pricing, mechanisms like cost realism analyses or price certifications might be employed, though the absence of competition inherently limits downward price pressure.

What are the risks associated with relying on a single supplier for this critical defense system over a multi-year period?

The primary risks include supply chain disruptions if the sole supplier faces issues, potential price escalation over time due to lack of competition, and reduced innovation if alternative solutions are not explored. Dependence on one vendor can also create strategic vulnerabilities if that vendor's business circumstances change significantly.

How does the performance of this contract align with the Navy's operational needs and technological advancements?

Alignment depends on the ALE-70 system's continued effectiveness and adaptability. While the contract ensures supply, ongoing dialogue and potential contract modifications would be necessary to ensure the system keeps pace with evolving naval requirements and technological advancements in the competitive landscape.

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: N0001922R0103

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

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: $479,356,753

Exercised Options: $175,784,686

Current Obligation: $175,784,686

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline