Navy awards $133.9M contract for MK 41 VLS mechanical design, BAE Systems selected
Contract Overview
Contract Amount: $133,934,918 ($133.9M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2021-04-28
End Date: 2026-04-27
Contract Duration: 1,825 days
Daily Burn Rate: $73.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MK 41 VLS MECHANICAL DESIGN AGENT
Place of Performance
Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421
Plain-Language Summary
Department of Defense obligated $133.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: MK 41 VLS MECHANICAL DESIGN AGENT Key points: 1. Contract awarded to BAE Systems Land & Armaments L.P. for engineering services. 2. The contract has a duration of 1825 days, spanning five years. 3. This is a definitive contract type, indicating a firm commitment. 4. The contract was awarded under full and open competition. 5. The contract's cost-plus-fixed-fee structure incentivizes efficient performance. 6. The award value is approximately $133.9 million.
Value Assessment
Rating: good
The contract value of $133.9 million for five years of engineering services for the MK 41 Vertical Launching System (VLS) appears reasonable given the complexity and criticality of naval defense systems. Benchmarking against similar complex engineering support contracts for major defense platforms suggests this pricing is within expected ranges. The cost-plus-fixed-fee (CPFF) structure, while carrying some risk for the government, allows for flexibility in design evolution and incentivizes the contractor to manage costs effectively to achieve the fixed fee.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of two bidders suggests a competitive environment, which typically leads to better price discovery and value for the government. The specific number of bidders is not detailed, but the 'full and open' designation implies a robust competition.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives the best possible technical solutions at a competitive price.
Public Impact
The primary beneficiaries are the U.S. Navy and its fleet, ensuring the continued operational readiness and modernization of the MK 41 VLS. Services delivered include essential mechanical design, engineering, and technical support for a critical weapons system. The geographic impact is national, supporting naval operations across various theaters. Workforce implications include employment for skilled engineers and technical specialists within BAE Systems and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not closely monitored.
- Reliance on a single contractor for critical design services may pose long-term supply chain risks.
- The complexity of the MK 41 VLS requires continuous specialized expertise, making contractor performance crucial.
Positive Signals
- Awarded under full and open competition, suggesting competitive pricing and technical solutions.
- Long-term contract duration provides stability and continuity for essential engineering support.
- BAE Systems is a major defense contractor with a proven track record in complex systems integration.
Sector Analysis
This contract falls within the Defense sector, specifically supporting naval weapons systems. The MK 41 VLS is a cornerstone of modern naval surface combatants, enabling the launch of a wide array of missiles. The market for specialized defense engineering services is characterized by high barriers to entry due to technical expertise, security clearances, and established relationships. Spending in this niche is driven by defense budgets, geopolitical needs, and the lifecycle management of existing platforms.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While BAE Systems is a large prime contractor, there is potential for small businesses to participate as subcontractors, particularly those specializing in niche engineering or manufacturing capabilities related to the MK 41 VLS. The extent of small business subcontracting will depend on BAE Systems' procurement strategy and the availability of qualified small business suppliers.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the Cost Plus Fixed Fee (CPFF) structure, requiring detailed cost reporting and performance metrics. Transparency is facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Defense may conduct audits or investigations as deemed necessary.
Related Government Programs
- MK 41 Vertical Launching System (VLS)
- Naval Surface Warfare
- Defense Engineering Services
- Weapons System Support
- Department of the Navy Contracts
Risk Flags
- Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
- Long-term duration of the contract necessitates sustained performance monitoring.
- Reliance on a single prime contractor for critical design services.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, definitive-contract, full-and-open-competition, cost-plus-fixed-fee, mk-41-vls, weapons-systems, naval-operations, minnesota, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $133.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. MK 41 VLS MECHANICAL DESIGN AGENT
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $133.9 million.
What is the period of performance?
Start: 2021-04-28. End: 2026-04-27.
What is the historical spending trend for MK 41 VLS mechanical design and engineering services?
Analyzing historical spending on MK 41 VLS mechanical design and engineering requires accessing detailed contract databases over several years. Typically, such critical systems undergo continuous upgrades, sustainment, and modernization efforts, leading to recurring contract awards. Spending patterns would likely reflect the lifecycle of the VLS, with periods of higher investment during major upgrades or new platform integration, and steady-state funding for sustainment and incremental improvements. The current $133.9 million award over five years suggests a significant, ongoing investment in maintaining and evolving this vital naval capability. Without specific historical data, it's difficult to pinpoint exact trends, but consistent funding for such a core system is expected.
How does the awarded value compare to similar engineering support contracts for naval weapon systems?
The $133.9 million award for five years of mechanical design and engineering services for the MK 41 VLS is substantial, reflecting the system's complexity and strategic importance. Comparing it to similar contracts requires identifying procurements for engineering support of other major naval weapon systems, such as missile systems, fire control systems, or sonar systems, over comparable durations. Contracts for highly specialized, long-term engineering support for critical defense platforms often range in the tens to hundreds of millions of dollars. Given the MK 41 VLS's widespread deployment and its role as a foundational capability for the Navy's surface fleet, this award appears to be in line with market expectations for such essential, long-duration support.
What are the key performance indicators (KPIs) likely used to assess BAE Systems' performance under this contract?
Key Performance Indicators (KPIs) for this contract would likely focus on technical performance, schedule adherence, and cost control. Technical KPIs could include the accuracy and completeness of design documentation, successful resolution of engineering challenges, and the effectiveness of proposed design modifications. Schedule KPIs would involve meeting key milestones for design reviews, prototype development, and integration support. Cost control KPIs would be crucial given the Cost Plus Fixed Fee structure, focusing on managing direct and indirect costs within projected budgets and achieving the fixed fee targets without exceeding overall contract value. Compliance with quality standards and timely delivery of technical data packages would also be critical.
What is the potential impact of this contract on the future development or upgrades of the MK 41 VLS?
This contract is crucial for the future development and upgrades of the MK 41 VLS. By securing long-term mechanical design and engineering support from BAE Systems, the Navy ensures continuity in maintaining and evolving this critical weapons system. This support will likely facilitate the integration of new missile types, enhancements to system reliability and safety, and potentially upgrades to software and control systems. The contract enables the Navy to adapt the VLS to meet emerging threats and operational requirements, ensuring its relevance and effectiveness throughout its service life. It provides the engineering foundation for future modernization efforts.
Are there any specific risks associated with BAE Systems' track record in delivering similar complex engineering services?
BAE Systems is a large, established defense contractor with extensive experience in complex systems engineering and integration across various military platforms. While specific performance details for every contract are not publicly available, the company generally has a strong track record. Potential risks, common to large defense contracts, could include schedule delays due to unforeseen technical challenges or scope creep, and cost management issues inherent in Cost Plus Fixed Fee arrangements if not rigorously overseen. However, the Navy's robust contract management processes and BAE's experience typically mitigate these risks. The 'full and open competition' award suggests that BAE's proposal met or exceeded the Navy's requirements and risk assessments.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002419R5393
Offers Received: 2
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, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations
Financial Breakdown
Contract Ceiling: $164,527,911
Exercised Options: $148,571,383
Current Obligation: $133,934,918
Actual Outlays: $12,259,446
Subaward Activity
Number of Subawards: 68
Total Subaward Amount: $11,702,637
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-04-28
Current End Date: 2026-04-27
Potential End Date: 2026-04-27 00:00:00
Last Modified: 2026-01-06
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