DoD awards BAE Systems $129.5M for long lead time material, facing full and open competition challenges
Contract Overview
Contract Amount: $129,488,550 ($129.5M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2009-09-01
End Date: 2017-12-22
Contract Duration: 3,034 days
Daily Burn Rate: $42.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LONG LEAD TIME MATERIAL (SCN FUNDS)
Place of Performance
Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421
Plain-Language Summary
Department of Defense obligated $129.5 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: LONG LEAD TIME MATERIAL (SCN FUNDS) Key points: 1. Significant award value of $129.5M for critical shipbuilding components. 2. Competition was full and open after exclusion of sources, suggesting a complex procurement process. 3. Risk associated with long lead time materials and potential supply chain disruptions. 4. Sector focus on Defense shipbuilding and repair, a high-cost, high-stakes industry.
Value Assessment
Rating: fair
The contract value of $129.5M for long lead time material appears substantial. Benchmarking against similar contracts for specialized shipbuilding components is difficult without more granular data on the specific materials and their complexity. The firm fixed price nature suggests an attempt to control costs, but the long duration and specialized nature may limit true price discovery.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The procurement utilized 'full and open competition after exclusion of sources,' indicating a competitive process but with specific pre-qualification or source restrictions. This method can sometimes limit the breadth of competition and potentially impact price competitiveness compared to unrestricted full and open competition.
Taxpayer Impact: The firm fixed price contract aims to control costs, but the long lead times and specialized nature of the materials could lead to price escalations if not managed effectively, impacting taxpayer investment.
Public Impact
Ensures availability of critical components for national defense shipbuilding programs. Supports jobs in the defense manufacturing sector, particularly in Minnesota. Potential for cost overruns due to long lead times and specialized material requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long lead time material risk
- Potential for supply chain disruptions
- Complexity of 'full and open after exclusion' competition
Positive Signals
- Firm fixed price contract
- Supports critical defense infrastructure
Sector Analysis
This contract falls within the Defense sector, specifically shipbuilding and repair. Spending in this area is characterized by high complexity, long program durations, and significant investment in specialized materials and manufacturing capabilities. Benchmarks are often project-specific due to unique requirements.
Small Business Impact
The contract was awarded to BAE Systems Land & Armaments L.P., a large prime contractor. There is no indication of specific small business subcontracting goals or participation in this data, suggesting a limited direct impact on small businesses for this prime award.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency (DCMA), indicating established oversight mechanisms. However, the long duration and complexity of long lead time material procurement warrant continuous monitoring for cost and schedule adherence.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Long lead time material dependency
- Potential for supply chain disruptions
- Limited competition pool due to exclusion of sources
- Complexity of shipbuilding procurement
Tags
ship-building-and-repairing, department-of-defense, mn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $129.5 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. LONG LEAD TIME MATERIAL (SCN FUNDS)
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 $129.5 million.
What is the period of performance?
Start: 2009-09-01. End: 2017-12-22.
What specific long lead time materials are included in this award, and how do their costs compare to industry benchmarks?
The provided data does not specify the exact long lead time materials. Understanding these specifics is crucial for a precise value assessment. Without this detail, it's challenging to benchmark costs against industry standards for similar components, making it difficult to definitively assess if the $129.5M represents fair value or if potential cost efficiencies were missed.
What are the primary risks associated with the 'full and open competition after exclusion of sources' method for this contract?
This competition method, while intended to be open, restricts the pool of eligible bidders. The primary risk is that by excluding certain sources, the DoD may not have accessed the most competitive pricing or the most innovative solutions available in the broader market. This could lead to higher costs or suboptimal technical outcomes compared to a truly unrestricted competition.
How effectively does the firm fixed price contract mitigate cost risks given the long lead time material requirement?
A firm fixed price contract is generally effective in transferring cost risk to the contractor. However, for long lead time materials, unforeseen price increases in raw materials or manufacturing challenges can still strain the contractor, potentially leading to claims or reduced quality if not managed proactively. The effectiveness hinges on the contractor's ability to forecast and absorb these risks over the extended period.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002408R4126
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC
Address: 4800 E RIVER RD, MINNEAPOLIS, MN, 55421
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $129,495,023
Exercised Options: $129,488,550
Current Obligation: $129,488,550
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-09-01
Current End Date: 2017-12-22
Potential End Date: 2017-12-22 00:00:00
Last Modified: 2023-01-27
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