DoD awards $48.6M for C-130J aircraft electronic systems, with limited competition

Contract Overview

Contract Amount: $48,576,000 ($48.6M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-04-30

End Date: 2027-03-30

Contract Duration: 1,064 days

Daily Burn Rate: $45.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALR-56M C-130J SHIPSET ORDER LOT 19

Place of Performance

Location: TOTOWA, PASSAIC County, NEW JERSEY, 07512

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $48.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: ALR-56M C-130J SHIPSET ORDER LOT 19 Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. The contract duration of nearly three years suggests a sustained need for these components. 3. Focus on electronic systems highlights the critical role of advanced technology in modern aircraft. 4. The specific NAICS code points to a specialized manufacturing sector. 5. Delivery order under an existing contract structure implies a pre-established relationship and framework.

Value Assessment

Rating: questionable

The contract value of $48.6 million for electronic systems is difficult to benchmark without more specific details on the components and services included. Given the sole-source nature of this award, there is a heightened risk that the pricing may not reflect the most competitive market rates. A comparison to similar orders for C-130J electronic components, if available, would be necessary to provide a more definitive value assessment. The fixed-price contract type offers some cost certainty, but the lack of competition limits the ability to verify value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in situations where only one responsible source exists. The lack of competition means that potential cost savings that could arise from a competitive bidding process are unlikely to be realized. It also limits the government's ability to explore alternative solutions or suppliers.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, it is harder to ensure that the price reflects the best value achievable in the market.

Public Impact

The U.S. Air Force, as the primary operator of C-130J aircraft, is the main beneficiary of these electronic systems. The contract ensures the continued operational readiness and technological relevance of the C-130J fleet. Services delivered include the manufacturing and supply of critical electronic components for the aircraft. The impact is primarily on the defense sector's operational capabilities, with no direct geographic or broad workforce implications beyond the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Lack of competition raises concerns about best value for taxpayer funds.
Specific component details are not publicly available, hindering detailed cost analysis.

Positive Signals

Contract ensures continued support for a critical military aircraft platform.
Fixed-price contract type provides some cost predictability.
Award is to an established entity with presumed expertise in defense electronics.

Sector Analysis

This contract falls within the Defense Electronics manufacturing sector, a specialized segment of the broader electronics industry. The market for military aircraft components is characterized by high technical requirements, stringent quality standards, and often, long product lifecycles. Spending in this area is driven by the need to maintain and upgrade aging fleets, as well as to incorporate new technologies for enhanced performance and survivability. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar aircraft systems or components.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature of the award and the specialized manufacturing required, it is unlikely that significant subcontracting opportunities for small businesses will be mandated or readily available, unless the prime contractor proactively seeks them out. The focus is on a large, established supplier rather than fostering small business participation.

Oversight & Accountability

The Department of Defense Contract Management Agency (DCMA) is responsible for oversight of this contract. As a delivery order under an existing contract, the initial award and justification for sole-sourcing would have undergone review. Transparency is limited by the sole-source nature and the proprietary information typically associated with defense electronics. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

C-130J Super Hercules Sustainment
Aircraft Electronic Systems Manufacturing
Defense Contract Management
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency on specific components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. ALR-56M C-130J SHIPSET ORDER LOT 19

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $48.6 million.

What is the period of performance?

Start: 2024-04-30. End: 2027-03-30.

What specific electronic components or systems are being procured under this contract?

The contract data identifies the procurement as 'ALR-56M C-130J SHIPSET ORDER LOT 19'. The ALR-56M is an advanced threat warning system, specifically an Airborne Warning Receiver, used on various military aircraft including the C-130J. This system is crucial for detecting and identifying radar threats, providing vital situational awareness to the aircrew. The 'shipset' implies a complete set of these systems required for one aircraft, and 'Lot 19' indicates a specific production lot within a larger program or contract vehicle. The exact sub-components and their specific functions are typically considered proprietary information by the manufacturer, BAE Systems.

What is the historical spending trend for ALR-56M systems on C-130J aircraft?

Analyzing historical spending for the ALR-56M on C-130J aircraft requires access to detailed contract databases and procurement histories. Typically, such systems are procured through multi-year contracts or a series of delivery orders as aircraft are built or upgraded. Without specific historical data for this particular 'Lot 19' or preceding lots, it's challenging to establish a precise trend. However, the recurring nature of these orders suggests a sustained requirement for the system's lifecycle support, upgrades, or integration into new aircraft. The total value of past orders, if available, would indicate whether this $48.6 million award represents an increase, decrease, or stable level of investment in this capability.

Why was this contract awarded on a sole-source basis?

The contract was awarded on a sole-source basis, as indicated by 'CT: NOT COMPETED'. This typically occurs when the government determines that only one responsible source can provide the required supplies or services. For specialized defense systems like the ALR-56M, this could be due to proprietary technology, unique manufacturing capabilities held by BAE Systems, or the need for seamless integration with existing C-130J systems where only the original equipment manufacturer can provide compatible parts. Justification documents for sole-source awards often cite factors such as urgency, lack of adequate competition, or the need to maintain standardization and interoperability.

What is the track record of BAE Systems in delivering electronic warfare systems for military aircraft?

BAE Systems is a major global defense contractor with a significant and long-standing track record in developing and producing electronic warfare (EW) systems for a wide range of military platforms, including aircraft. The ALR-56M itself is a testament to their capabilities in this area. The company has supplied EW systems to numerous air forces worldwide and has been involved in various upgrade programs for legacy aircraft as well as integration onto new platforms. Their experience spans decades, encompassing radar warning receivers, jammers, decoys, and other electronic support measures. While specific performance metrics for individual contracts are not always public, BAE Systems is generally considered a leading provider in the EW domain.

How does the $48.6 million value compare to typical investments in aircraft electronic systems?

The $48.6 million value for a 'shipset' of advanced threat warning systems (ALR-56M) for a fleet of C-130J aircraft is substantial but falls within the expected range for complex avionics and electronic warfare suites. Modern military aircraft often have integrated electronic systems costing tens of millions of dollars per aircraft, encompassing radar, electronic countermeasures, communication systems, and navigation equipment. For a specific component like a threat warning system, the cost per shipset can vary significantly based on the system's sophistication, the number of units procured, and the contract type. Given the sole-source nature, this figure represents the negotiated price rather than a market-tested one, making direct comparison difficult without further context on the specific lot and configuration.

What are the potential risks associated with procuring critical aircraft components via sole-source contracts?

Procuring critical aircraft components via sole-source contracts carries several inherent risks. The primary risk is the potential for inflated pricing, as the absence of competition removes the downward pressure that multiple bidders would typically exert. This can lead to reduced value for taxpayer money. Another risk is a lack of innovation; without competitive pressure, the sole provider may have less incentive to invest in improving the product or manufacturing processes. Furthermore, sole-source arrangements can create dependency on a single supplier, making the government vulnerable to supply chain disruptions, price hikes, or the supplier's business decisions (e.g., discontinuation of a product line). Finally, it limits the government's ability to explore alternative, potentially superior or more cost-effective, solutions.

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: Ball Corporation

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: $97,152,000

Exercised Options: $97,152,000

Current Obligation: $48,576,000

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