DoD awards BAE Systems $51M for sub-caliber technology, focusing on R&D in physical and engineering sciences

Contract Overview

Contract Amount: $51,097,742 ($51.1M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2023-05-02

End Date: 2026-04-30

Contract Duration: 1,094 days

Daily Burn Rate: $46.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: XM1155 SUB-CALIBER TECHNOLOGY DEMONSTRATOR

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $51.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: XM1155 SUB-CALIBER TECHNOLOGY DEMONSTRATOR Key points: 1. Contract focuses on research and development, indicating investment in future capabilities. 2. BAE Systems Land & Armaments L.P. is the sole awardee, suggesting specialized expertise. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. Performance period spans nearly three years, allowing for substantial development. 5. The award is a definitive contract, implying a clear scope of work. 6. The North American Industry Classification System (NAICS) code 541715 points to advanced scientific research.

Value Assessment

Rating: fair

Benchmarking the value of this specific 'Technology Demonstrator' contract is challenging without detailed technical specifications and comparable R&D projects. The Cost Plus Fixed Fee (CPFF) structure means the government pays BAE's costs plus a fixed fee, which can be less predictable than fixed-price contracts. However, for complex R&D where scope is uncertain, CPFF can be appropriate. The base award amount of $46.7M (excluding potential options) for a 3-year R&D effort appears within a reasonable range for specialized defense technology development, but a deeper dive into the fixed fee percentage and projected total cost would be needed for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit proposals. While the data does not specify the number of bids received, this competitive approach is generally favorable for price discovery and ensuring the government receives the best value. The fact that BAE Systems was selected suggests they offered the most advantageous proposal based on the evaluation criteria set forth in the solicitation.

Taxpayer Impact: A full and open competition process helps ensure taxpayer dollars are used efficiently by fostering a competitive environment that can drive down costs and improve the quality of the research and development.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Army, which will receive advanced sub-caliber technology. This contract supports the development of new military capabilities, potentially enhancing future combat effectiveness. The research and development activities will likely occur within BAE Systems' facilities, potentially impacting their workforce in Minnesota. The project aims to advance the state-of-the-art in physical and engineering sciences relevant to defense applications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risk of cost growth if not meticulously monitored.
The specialized nature of R&D can make it difficult to precisely define deliverables upfront, potentially leading to scope creep.
Reliance on a single contractor for a specific technology demonstrator may limit future competitive options if alternatives are not explored concurrently.

Positive Signals

Awarding under full and open competition suggests a robust selection process and potential for strong technical solutions.
The multi-year performance period allows for thorough development and testing of the technology.
Focus on R&D signals a commitment to innovation and modernization within the Army's capabilities.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research and Development (R&D) for advanced weaponry and systems. The R&D market within the defense industry is substantial, driven by the need for technological superiority. Companies like BAE Systems are key players, competing for contracts that advance capabilities in areas such as ballistics, materials science, and system integration. Spending benchmarks for similar R&D efforts can vary widely based on complexity, but multi-million dollar awards for technology demonstrators are common.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contractor, BAE Systems may have subcontracting opportunities for small businesses, but this is not explicitly detailed in the award information. The focus on specialized R&D might limit the scope for broad small business participation unless specific components or services are outsourced.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and technical officers. The Cost Plus Fixed Fee structure necessitates close monitoring of costs and progress to ensure the fixed fee remains appropriate and that the project stays within projected expenditures. Transparency is generally maintained through contract reporting requirements, and the Inspector General's office would have jurisdiction in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Weapons Systems Development
Military Technology Research
Department of the Army R&D Programs
BAE Systems Defense Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Research and Development projects inherently carry uncertainty regarding technical outcomes and timelines.
Specialized nature of the technology may limit the pool of potential future competitors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. XM1155 SUB-CALIBER TECHNOLOGY DEMONSTRATOR

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 Army).

What is the total obligated amount?

The obligated amount is $51.1 million.

What is the period of performance?

Start: 2023-05-02. End: 2026-04-30.

What is the specific technological advancement sought by the 'SUB-CALIBER TECHNOLOGY DEMONSTRATOR' and how does it align with current Army modernization priorities?

The specific technological advancement sought by the 'SUB-CALIBER TECHNOLOGY DEMONSTRATOR' contract (XM1155) is not publicly detailed due to its sensitive nature within defense research and development. However, sub-caliber technology typically refers to systems that allow a larger weapon platform to fire smaller projectiles, often for training, extended range, or specialized applications. This aligns with Army modernization priorities by potentially offering more versatile and cost-effective firing solutions, reducing logistical burdens associated with larger ammunition, or enabling new tactical approaches. Such advancements are crucial for maintaining a technological edge and adapting to evolving battlefield requirements. The focus on 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541715) suggests a foundational, science-driven approach to developing this capability, rather than a direct procurement of an existing system.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for R&D projects of this nature in terms of risk and cost control?

The Cost Plus Fixed Fee (CPFF) contract type is commonly used for research and development (R&D) projects where the scope of work is not fully defined at the outset, making fixed-price contracts impractical. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts significant cost risk to the government, as the final cost can exceed initial estimates if costs escalate. However, it allows for flexibility in exploring innovative solutions without the contractor being penalized for unforeseen technical challenges. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty but greater adaptability for R&D. Cost-Plus-Incentive-Fee (CPIF) contracts offer a middle ground by adjusting the fee based on performance against cost targets, potentially providing better cost control than CPFF while retaining flexibility. For highly uncertain R&D, CPFF can be appropriate, but it demands rigorous government oversight to manage costs effectively.

What is BAE Systems Land & Armaments L.P.'s track record with similar Department of Defense R&D contracts, particularly those involving advanced ordnance or weapon systems?

BAE Systems Land & Armaments L.P. has a substantial and well-established track record with the Department of Defense (DoD) for research and development (R&D) contracts, particularly in areas related to advanced ordnance and weapon systems. As a major defense contractor, they are frequently involved in developing and producing complex military hardware. Their portfolio includes work on artillery systems, armored vehicles, munitions, and related technologies. While specific details of past R&D projects are often proprietary, BAE Systems' consistent engagement in large-scale defense contracts indicates a proven capability in managing complex technical challenges, meeting stringent performance requirements, and delivering advanced technological solutions. Their experience likely encompasses various contract types, including R&D efforts similar in scope and complexity to the XM1155 demonstrator, suggesting a high likelihood of successful execution based on past performance.

Given the 'full and open competition' award, how many bids were likely received, and what does this imply about the competitive landscape for sub-caliber technology development?

While the provided data specifies 'full and open competition' (ct: FULL AND OPEN COMPETITION), it does not state the number of bids received for the XM1155 contract. However, the designation implies that the solicitation was broadly advertised, allowing any qualified company to submit a proposal. For advanced R&D in specialized defense technology, the number of competitive bids can vary significantly. It might range from a few highly qualified bidders to a larger pool, depending on the maturity of the technology and the number of companies possessing the requisite expertise and facilities. A competitive process, regardless of the exact number of bids, is intended to ensure the government receives the best value. If only a few bids were received, it could suggest a niche market with limited players, potentially impacting long-term competition. Conversely, multiple bids would indicate a healthier competitive environment.

What are the potential risks associated with the 3-year duration and the 'Cost Plus Fixed Fee' structure for this specific R&D project?

The combination of a 3-year duration and a Cost Plus Fixed Fee (CPFF) structure for the XM1155 contract presents several potential risks. Firstly, the extended timeline increases the possibility of cost escalation due to inflation, changes in material costs, or unforeseen technical hurdles that require additional resources. Secondly, the CPFF structure inherently places cost risk on the government. If BAE Systems' actual costs exceed initial projections, the government will bear these expenses, plus the fixed fee. This necessitates robust government oversight to scrutinize incurred costs and ensure efficiency. Scope creep is another risk; R&D projects can evolve, and without careful management, the scope might expand beyond the original intent, driving up costs without a corresponding increase in the fixed fee or contract value. Finally, the fixed fee, while agreed upon, might not accurately reflect the final effort if the project's complexity significantly deviates from initial assessments, potentially leading to contractor dissatisfaction or, conversely, excessive profit if costs are managed exceptionally well without commensurate value increase.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: W15QKN21R0ER7

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, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $87,291,538

Exercised Options: $87,291,538

Current Obligation: $51,097,742

Actual Outlays: $5,062,530

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $8,331,230

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline