DoD Awards $66M for SHIPSETS to BAE Systems, Lacking Competition

Contract Overview

Contract Amount: $66,062,822 ($66.1M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2018-02-12

End Date: 2022-07-31

Contract Duration: 1,630 days

Daily Burn Rate: $40.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SHIPSETS

Place of Performance

Location: TOTOWA, PASSAIC County, NEW JERSEY, 07512

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $66.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: SHIPSETS Key points: 1. Significant contract value of $66M awarded to a single vendor. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. The contract spans over four years, indicating a long-term reliance on this vendor. 4. The sector is 'Other Electronic Component Manufacturing,' which can be critical for defense systems.

Value Assessment

Rating: questionable

The contract value of $66M is substantial. Without competitive bidding, it's difficult to assess if the pricing is optimal. The benchmark of $4.05M per year suggests a need for closer scrutiny against market rates for similar electronic components.

Cost Per Unit: $4,052,900

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these SHIPSETS, as there was no opportunity for multiple vendors to bid and drive down costs.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Reliance on a single supplier could create supply chain vulnerabilities. Limited opportunities for other businesses, including small businesses, to participate. Potential for reduced innovation if the sole-source vendor faces no competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for overpricing
Long contract duration without re-evaluation

Positive Signals

Clear vendor identified
Defined contract period

Sector Analysis

The 'Other Electronic Component Manufacturing' sector is vital for defense systems. Spending benchmarks in this area can vary widely based on specialization. A $66M award over four years suggests a significant procurement, but without competition, it's hard to gauge if it aligns with industry norms.

Small Business Impact

The contract was awarded to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. and indicates that small businesses were not involved in this specific award. There is no indication of subcontracting opportunities for small businesses.

Oversight & Accountability

The sole-source nature of this award warrants careful oversight to ensure fair pricing and performance. The Department of Defense and the Defense Logistics Agency should have mechanisms in place to review such contracts periodically for potential renegotiation or future competition.

Related Government Programs

Other Electronic Component Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Risk of vendor lock-in
Limited transparency in pricing
No clear small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. SHIPSETS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $66.1 million.

What is the period of performance?

Start: 2018-02-12. End: 2022-07-31.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available alternatives. Without specific documentation, it's impossible to determine the exact reason. However, such justifications should be rigorously reviewed to ensure they are valid and not simply a means to avoid the competitive bidding process.

How does the per-unit cost of $4.05M compare to industry benchmarks for similar electronic components?

A direct comparison requires detailed specifications of the 'SHIPSETS' components. However, $4.05M per year is a substantial figure. If these are standard electronic components, this cost could be significantly higher than market rates. Benchmarking against similar, competitively procured contracts for comparable systems is crucial for assessing value.

What measures are in place to ensure the quality and effectiveness of the delivered SHIPSETS given the lack of competition?

Quality assurance and performance monitoring are critical for sole-source contracts. The contract likely includes specific performance standards, delivery schedules, and acceptance criteria. The Defense Logistics Agency should have robust inspection and testing protocols to ensure the delivered components meet all required specifications and function effectively.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 100 CAMPUS RD STE 1, TOTOWA, NJ, 07512

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,062,822

Exercised Options: $66,062,822

Current Obligation: $66,062,822

Actual Outlays: $2,024,914

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX15D9441

IDV Type: IDC

Timeline