Navy Awards $61M for Ship and Boat Propulsion Components to United Defense, L.P
Contract Overview
Contract Amount: $61,133,478 ($61.1M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2004-05-05
End Date: 2011-04-30
Contract Duration: 2,551 days
Daily Burn Rate: $24.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200412!043087!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002404C4156 !A!N! !N! ! !20040505!20101231!006481543!098060218!175406842!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000011730884!N!N!000096750008!2010!SHIP AND BOAT PROPULSION COMPONENTS !A3 !SHIPS !000 !* !331491!E! !3! ! ! ! ! !99990909!B! ! !B! !D!N!J!1!001!N!1G!Z!Y!C! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421
Plain-Language Summary
Department of Defense obligated $61.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200412!043087!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002404C4156 !A!N! !N! ! !20040505!20101231!006481543!098060218!175406842!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENN… Key points: 1. Contract awarded for critical ship and boat propulsion components. 2. Significant value of $61.1 million over a 7-year period. 3. Sole-source award raises questions about competition and price discovery. 4. Component manufacturing falls under the Defense sector, specifically shipbuilding.
Value Assessment
Rating: fair
The contract value of $61.1 million over approximately 7 years suggests a substantial investment. Without specific unit cost data or benchmarks for similar propulsion components, a precise value assessment is difficult. However, the duration and scope indicate a significant procurement.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating a lack of competition. This method may lead to higher prices as there was no competitive pressure to drive down costs. The government did not explore alternative sources.
Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium compared to a competitively bid contract, as the government did not leverage market competition to secure the best possible price.
Public Impact
Ensures continued operation and maintenance of naval vessels. Supports critical defense infrastructure and national security. Potential for job creation within the defense manufacturing sector. Impact on the supply chain for specialized marine components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Long contract duration (7 years) may not reflect current market prices.
- Lack of detailed cost breakdown makes value assessment challenging.
Positive Signals
- Addresses a critical need for naval propulsion components.
- Ensures supply chain continuity for essential defense systems.
- Potential for long-term relationship with a known supplier.
Sector Analysis
This contract falls within the Defense sector, specifically related to shipbuilding and maintenance. The spending benchmark for propulsion components can vary widely based on complexity and quantity, but $61 million over seven years for specialized parts suggests a significant, long-term requirement.
Small Business Impact
The data does not indicate any specific provisions or considerations for small businesses in this sole-source award. The prime contractor, United Defense, L.P., is a large entity, and there's no information on subcontracting opportunities for smaller firms.
Oversight & Accountability
The award was managed by the Naval Sea Systems Command, with oversight likely provided by the Defense Contract Management Agency. The sole-source nature warrants scrutiny to ensure the price paid was fair and reasonable, despite the absence of competition.
Related Government Programs
- Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Long contract duration may not reflect current market conditions.
- Lack of transparency in cost justification.
Tags
nonferrous-metal-except-copper-and-alumi, department-of-defense, mn, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200412!043087!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002404C4156 !A!N! !N! ! !20040505!20101231!006481543!098060218!175406842!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000011730884!N!N!000096750008!2010!SHIP AND BOAT PROPULSION COMPONENTS !A3 !SHIPS !000 !* !331491!E! !3! ! ! ! ! !999
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 $61.1 million.
What is the period of performance?
Start: 2004-05-05. End: 2011-04-30.
What was the justification for the sole-source award, and were alternative sources considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's unclear why United Defense, L.P. was the only option. A thorough review would examine if market research was conducted to identify potential competitors or if proprietary technology necessitated this approach.
How does the per-unit cost of these propulsion components compare to industry benchmarks or previous contracts?
Assessing the per-unit cost is challenging without specific unit data and detailed specifications. Given the sole-source nature and the contract's duration, it's crucial to benchmark against similar components procured competitively or through other means. Any significant deviation from established benchmarks would warrant further investigation into pricing reasonableness.
What is the long-term strategic value of this sole-source relationship for the Navy's propulsion systems?
The long-term value hinges on the reliability and performance of the components provided by United Defense, L.P. A sole-source award can ensure specialized knowledge and consistent quality if the contractor is the sole expert. However, it also carries the risk of vendor lock-in and potentially higher costs over time compared to fostering a competitive market.
Industry Classification
NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
Product/Service Code: SHIP AND MARINE EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 4800 EAST RIVER ROAD, MINNEAPOLIS, MN, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2004-05-05
Current End Date: 2011-04-30
Potential End Date: 2011-04-30 00:00:00
Last Modified: 2012-03-29
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