DoD Awards BAE Systems $102M for P-8 ASP Systems, Raising Competition Concerns

Contract Overview

Contract Amount: $102,190,648 ($102.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-29

End Date: 2027-12-30

Contract Duration: 1,371 days

Daily Burn Rate: $74.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: P-8 ASP

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03061

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $102.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: P-8 ASP Key points: 1. Significant contract value of over $102 million awarded. 2. Sole-source award raises questions about competitive pricing. 3. Focus on critical navigation and guidance systems for naval aviation. 4. Potential for cost overruns due to Cost Plus Fixed Fee structure.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, makes a direct pricing assessment difficult without competitive benchmarks. The awarded amount of $102,190,648 for 1371 days suggests a high per-diem cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This limits the government's ability to leverage market forces to achieve the best possible price and value.

Taxpayer Impact: The absence of competition may lead to taxpayers paying a premium for these critical systems, as there was no opportunity for multiple vendors to bid and drive down costs.

Public Impact

Impacts naval aviation readiness and technological superiority. Ensures continued operation and modernization of P-8 aircraft. Potential for increased costs for taxpayers due to sole-source award. Highlights reliance on specific contractors for specialized defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Lack of small business participation noted.

Positive Signals

Supports critical defense capabilities.
Long-term contract ensures system sustainment.
Awarded to a known defense contractor.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the manufacturing of advanced navigation and guidance systems for naval aircraft. Spending in this sub-sector is often characterized by high R&D costs and specialized production, with limited vendor pools.

Small Business Impact

The data indicates that small business participation is not a factor in this contract, as the awardee is a large corporation and the 'sb' field is false. This suggests a missed opportunity to engage smaller, innovative firms in the defense supply chain.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure fair pricing and prevent potential cost creep. The Department of the Navy should document the justification for the sole-source award thoroughly.

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
Cost Plus Fixed Fee contract type
Lack of small business participation
Potential for cost overruns
Limited price discovery due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $102.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. P-8 ASP

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 $102.2 million.

What is the period of performance?

Start: 2024-03-29. End: 2027-12-30.

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

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one vendor can meet the requirements. To ensure fair and reasonable pricing, the agency should conduct a thorough price analysis based on historical data, cost breakdowns, and market research, even without direct competition. Independent cost estimates and negotiation strategies are crucial.

What are the potential risks associated with the Cost Plus Fixed Fee contract type in this sole-source scenario?

The primary risk of a CPFF contract, especially when sole-sourced, is the potential for cost overruns. The contractor is incentivized to incur costs to achieve the fixed fee, and without competitive pressure, there's less motivation to control expenses. This can lead to the government paying more than necessary if robust oversight and cost controls are not rigorously applied.

How does this sole-source award impact the long-term competitive landscape for similar defense systems?

Sole-source awards can stifle competition in the long run by reinforcing the incumbent's market position and potentially discouraging new entrants from developing competing technologies or capabilities. This can lead to a reduced vendor base, higher prices, and slower innovation for future procurements of similar systems.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $136,702,555

Exercised Options: $136,702,555

Current Obligation: $102,190,648

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $4,057,477

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922G0009

IDV Type: BOA

Timeline