DoD Awards BAE Systems $176M for MK 41 VLS Engineering Services, Funded by FY13 RDT&E and FMS
Contract Overview
Contract Amount: $176,309,350 ($176.3M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2013-06-04
End Date: 2022-04-30
Contract Duration: 3,252 days
Daily Burn Rate: $54.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: BASIC CONTRACT AWARD FOR MK 41 VLS MECHANICAL DESIGN AGENT ENGINEERING AND TECHNICAL SERVICES. BASIC AWARD FUNDS FY 13 RDT&E AND FY 13 FMS SLINS.
Place of Performance
Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421
Plain-Language Summary
Department of Defense obligated $176.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: BASIC CONTRACT AWARD FOR MK 41 VLS MECHANICAL DESIGN AGENT ENGINEERING AND TECHNICAL SERVICES. BASIC AWARD FUNDS FY 13 RDT&E AND FY 13 FMS SLINS. Key points: 1. Significant award for critical naval defense systems (MK 41 VLS). 2. BAE Systems is a major defense contractor, indicating established capabilities. 3. Cost-plus fixed fee contract type carries inherent cost escalation risk. 4. Long performance period (2013-2022) suggests a complex, ongoing need.
Value Assessment
Rating: fair
The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to higher costs than fixed-price contracts if not managed carefully. Benchmarking CPFF contracts for similar engineering services is challenging due to varying scope and overhead.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, suggesting a sole-source award. Lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these essential engineering services.
Public Impact
Supports the U.S. Navy's critical Vertical Launch System (VLS) technology. Ensures continued development and technical support for a key defense asset. Funds research, development, testing, and evaluation (RDT&E) for defense modernization. Includes Foreign Military Sales (FMS) funding, supporting allied defense capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award lacks competitive pricing pressure.
- Cost-plus contract type can lead to cost overruns.
- Long contract duration increases risk of scope creep and inefficiency.
- Limited transparency on specific technical requirements and deliverables.
Positive Signals
- Addresses a critical defense system (MK 41 VLS).
- BAE Systems is a proven defense contractor.
- Funds essential RDT&E activities.
- Supports allied nations through FMS.
Sector Analysis
This award falls within the Engineering Services sector, specifically supporting defense systems. Benchmarks for large, sole-source engineering contracts in defense can vary widely based on system complexity and duration.
Small Business Impact
The awardee, BAE Systems Land & Armaments L.P., is a large business. There is no indication of small business participation in this specific award, which is common for large, sole-source defense contracts.
Oversight & Accountability
Oversight is likely managed by the Defense Contract Management Agency (DCMA). The CPFF structure necessitates robust oversight to control costs and ensure adherence to technical specifications.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Cost-plus contract type increases risk of cost overruns.
- Long performance period may lead to inefficiencies or obsolescence.
- Lack of specific technical details hinders full value assessment.
- Potential for contractor to maximize profit through cost escalation.
Tags
engineering-services, department-of-defense, mn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $176.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. BASIC CONTRACT AWARD FOR MK 41 VLS MECHANICAL DESIGN AGENT ENGINEERING AND TECHNICAL SERVICES. BASIC AWARD FUNDS FY 13 RDT&E AND FY 13 FMS SLINS.
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 $176.3 million.
What is the period of performance?
Start: 2013-06-04. End: 2022-04-30.
What specific technical advancements or engineering solutions are being procured with these funds, and how do they align with current naval modernization priorities?
The contract focuses on mechanical design, engineering, and technical services for the MK 41 Vertical Launch System (VLS). While the data doesn't detail specific advancements, VLS is a cornerstone of naval combat capability. Funds likely support ongoing upgrades, integration of new munitions, and maintenance of existing systems to ensure fleet readiness and adapt to evolving threats, aligning with broader naval modernization efforts.
Given the sole-source nature and CPFF structure, what mechanisms are in place to ensure cost control and prevent potential overruns beyond the initial award amount?
As a sole-source, CPFF contract, robust government oversight is critical. Mechanisms likely include detailed cost monitoring, regular audits of contractor expenditures, strict adherence to the fixed fee, and defined ceilings for allowable costs. The Defense Contract Management Agency (DCMA) would play a key role in scrutinizing invoices and ensuring the contractor operates efficiently within the contract's parameters to mitigate cost escalation.
How does the long performance period (2013-2022) impact the assessment of value for money and the potential for obsolescence of the engineering services provided?
The extended performance period suggests a long-term need for specialized engineering support for the MK 41 VLS. While it allows for continuity, it also increases the risk of cost growth and potential obsolescence if the services aren't continuously adapted to new technologies or requirements. Ensuring the contract includes provisions for scope adjustments and incorporates modern engineering practices is crucial for maintaining value over its duration.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002413R5325
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Ball Corporation
Address: 4800 E RIVER RD, MINNEAPOLIS, MN, 55421
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $183,672,564
Exercised Options: $176,637,213
Current Obligation: $176,309,350
Actual Outlays: $3,175,539
Subaward Activity
Number of Subawards: 308
Total Subaward Amount: $45,289,153
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-06-04
Current End Date: 2022-04-30
Potential End Date: 2022-04-30 00:00:00
Last Modified: 2025-08-28
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