Navy Awards $1.1B for Engineering Services to United Defense, L.P. for Guided Missile Launch Systems

Contract Overview

Contract Amount: $110,266,803 ($110.3M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2001-12-28

End Date: 2012-03-31

Contract Duration: 3,746 days

Daily Burn Rate: $29.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200203!020233!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5406 !A!N! !N! !20011228!20051231!006481543!006481543!824825459!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000000420447!Y!N!000113702040!R425!ENGINEERING TECHNICAL SERVICES !A5 !WEAPONS !2CLB!GUIDED MSL LAUNCH MK-41 !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!R!1!001!N!1B!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!* !A!C!N! ! ! !Y! !PMS410!0001!

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $110.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200203!020233!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5406 !A!N! !N! !20011228!20051231!006481543!006481543!824825459!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNE… Key points: 1. Contract awarded to United Defense, L.P. for Engineering Technical Services related to Guided Missile Launch Systems. 2. The contract has a base value of $1.1 billion and a duration of over 3 years. 3. The contract was not competed, raising potential concerns about price discovery and value for taxpayer money. 4. The sector is Defense, specifically related to weapons systems and engineering services.

Value Assessment

Rating: questionable

The contract value of $1.1 billion for engineering technical services is substantial. Without specific benchmarks for similar complex defense systems, it's difficult to definitively assess value. However, the lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This method can lead to higher prices as there is no competitive pressure to drive down costs, potentially impacting the best price for the government.

Taxpayer Impact: The lack of competition in a contract of this magnitude raises concerns about whether taxpayers received the best possible value, as competitive bidding could have potentially secured lower costs.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding for critical defense engineering services. The long duration and significant value of the contract mean that any inefficiencies or overpricing will have a sustained impact. This award highlights the reliance on specific contractors for specialized defense systems, potentially limiting future competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Long contract duration

Positive Signals

Award to established contractor
Supports critical defense systems

Sector Analysis

This contract falls within the Defense sector, specifically for engineering services related to weapons systems. Spending in this area is often characterized by high complexity, specialized requirements, and significant government investment, with competition varying widely.

Small Business Impact

The data does not indicate any specific provisions or considerations for small business participation in this contract. The award appears to be to a large prime contractor, United Defense, L.P.

Oversight & Accountability

The 'not competed' status suggests that standard competitive oversight processes may have been bypassed. Further review would be needed to understand the justification for the sole-source award and ensure appropriate accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition may lead to inflated costs.
Potential for reduced innovation due to absence of competitive pressure.
Limited transparency in pricing due to sole-source nature.
Long contract duration increases long-term financial exposure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200203!020233!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5406 !A!N! !N! !20011228!20051231!006481543!006481543!824825459!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000000420447!Y!N!000113702040!R425!ENGINEERING TECHNICAL SERVICES !A5 !WEAPONS !2CLB!GUIDED MSL LAUNCH MK-41 !541330!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $110.3 million.

What is the period of performance?

Start: 2001-12-28. End: 2012-03-31.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without access to the specific contract file and justification documentation, it's impossible to determine the precise reasons. However, the absence of competition inherently limits the government's ability to explore potentially more cost-effective solutions through a bidding process.

How does the cost of this contract compare to similar engineering services contracts for defense systems, particularly those awarded competitively?

Benchmarking this $1.1 billion contract against similar sole-source defense engineering services is challenging without detailed cost breakdowns and access to competitive contract data. Generally, sole-source contracts tend to be more expensive than competitively awarded ones due to the lack of price pressure. A thorough cost analysis by the agency would be necessary to validate the pricing.

What mechanisms are in place to ensure effective performance and cost control throughout the contract's duration, given its sole-source nature?

For sole-source contracts, robust oversight is crucial. This includes detailed performance metrics, regular progress reviews, and potentially independent cost audits. The contract type (Cost Plus Award Fee) suggests incentives for performance, but the agency must diligently monitor expenditures and deliverables to ensure the contractor meets objectives efficiently and effectively.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

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

Address: 4800 EAST RIVER ROAD, MINNEAPOLIS, MN, 55421

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline