DoD awards $62.7M contract for armored vehicle kits, raising questions about competition and value

Contract Overview

Contract Amount: $62,676,911 ($62.7M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2009-04-21

End Date: 2012-07-31

Contract Duration: 1,197 days

Daily Burn Rate: $52.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UCA FOR BAR ARMOR KITS TO BE USED ON RG-31 AND COUGAR CAT I MRAP VEHICLES.

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78725

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $62.7 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: UCA FOR BAR ARMOR KITS TO BE USED ON RG-31 AND COUGAR CAT I MRAP VEHICLES. Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Significant investment in vehicle protection systems highlights ongoing needs for troop safety in theater. 3. The contract's duration and value suggest a substantial, long-term commitment to specific vehicle platforms. 4. Lack of competition may indicate limited market availability or specialized nature of the required armor. 5. Performance context is tied to the operational deployment of RG-31 and Cougar MRAP vehicles. 6. Sector positioning within military vehicle manufacturing underscores the demand for survivability enhancements.

Value Assessment

Rating: questionable

The total award of $62.7 million for UCA kits for RG-31 and Cougar MRAP vehicles lacks direct comparable contract data within the provided snippet. However, the absence of competition is a significant red flag for value for money. Without bids from multiple vendors, it's difficult to ascertain if the price paid reflects a competitive market rate or if there was an opportunity for cost savings through a more open bidding process. The firm-fixed-price structure aims to transfer risk to the contractor, but the overall value proposition is weakened by the sole-source nature of the award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating a sole-source procurement. This means that the Department of the Army did not solicit bids from multiple potential suppliers. Such awards are typically justified when only one source is capable of meeting the requirement, or in urgent situations. The lack of competition means there were no other bidders to compare against, and price discovery was limited to negotiations with the single awarded contractor, BAE Systems.

Taxpayer Impact: For taxpayers, a sole-source award means there's a higher risk of paying a premium compared to a competitively bid contract. Without competing offers, the government has less leverage to negotiate the lowest possible price.

Public Impact

Troops operating RG-31 and Cougar MRAP vehicles will benefit from enhanced protection against threats. The contract delivers crucial survivability upgrades for armored personnel carriers. The primary geographic impact is on operational theaters where these vehicles are deployed. Workforce implications may include specialized manufacturing and integration roles within BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits transparency and potential cost savings.
Lack of market competition raises concerns about pricing and efficiency.
Contract duration (over 3 years) locks in spending without re-evaluation of alternatives.

Positive Signals

Addresses critical need for troop protection in armored vehicles.
Firm-fixed-price contract shifts cost overrun risk to the contractor.
Award to established defense contractor BAE Systems suggests potential for reliable delivery.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on armored vehicle components. The market for military vehicle survivability systems is driven by evolving threat landscapes and the need to protect personnel. Spending in this area is substantial, with numerous contracts awarded annually for vehicle upgrades, armor, and related technologies. This specific award for UCA kits fits within the broader trend of enhancing the protection of existing vehicle fleets rather than procuring entirely new platforms.

Small Business Impact

The contract was not competed and there is no indication of small business set-asides or subcontracting plans within the provided data. As a sole-source award to a large prime contractor (BAE Systems), it is unlikely to directly benefit small businesses through set-aside provisions. However, BAE Systems may engage small businesses as subcontractors, but this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and potentially the Department of Defense's Inspector General. The firm-fixed-price nature of the contract provides some level of financial oversight by capping the government's liability. Transparency is limited due to the non-competitive award, making detailed public scrutiny of the pricing and justification more challenging.

Related Government Programs

MRAP Vehicle Program
Mine-Resistant Ambush Protected Vehicles
BAE Systems Armored Vehicles
RG-31 Armored Vehicle
Cougar Armored Vehicle

Risk Flags

Non-competitive award
Lack of price competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.7 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC.. UCA FOR BAR ARMOR KITS TO BE USED ON RG-31 AND COUGAR CAT I MRAP VEHICLES.

Who is the contractor on this award?

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

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $62.7 million.

What is the period of performance?

Start: 2009-04-21. End: 2012-07-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED'. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations (FAR). These can include situations where only one responsible source is available, or when there is an urgent and compelling need that cannot be met through competitive means. Without further documentation from the Department of the Army, the precise justification remains unknown. However, common reasons for sole-sourcing defense equipment include unique technological requirements, proprietary systems, or critical interoperability needs with existing platforms like the RG-31 and Cougar MRAPs.

How does the $62.7 million cost compare to similar armor kit procurements?

Directly comparing the $62.7 million total award for UCA kits to similar procurements is challenging without more specific data on the number of kits, their specifications, and the contract type for comparable awards. The provided data does not include a per-unit cost or details on the scope of work beyond 'UCA FOR BAR ARMOR KITS'. However, the fact that this was a sole-source award suggests that a competitive benchmark for pricing was not established. In a competitive environment, multiple bids would provide a clearer picture of market rates for such systems. The absence of this competitive data makes a robust value-for-money assessment difficult.

What are the primary risks associated with this non-competitively awarded contract?

The primary risk associated with this non-competitively awarded contract is the potential for inflated pricing due to the lack of market competition. Without competing bids, the government may not have secured the best possible price. Another risk is reduced innovation, as there was no incentive for alternative solutions or cost-saving approaches from other potential vendors. Furthermore, the justification for the sole-source award itself could be scrutinized for adequacy, potentially indicating a failure to explore all viable competitive options. Finally, there's a risk of vendor lock-in if the specialized nature of the armor kits makes switching suppliers difficult or costly in the future.

What is the track record of BAE Systems in delivering similar armored vehicle components?

BAE Systems is a major global defense contractor with a significant track record in designing, manufacturing, and integrating armored vehicles and their components. They are known for producing a wide range of military platforms, including MRAPs, combat vehicles, and armored personnel carriers. Their experience encompasses various survivability systems and upgrades. While this specific contract is for UCA kits for RG-31 and Cougar vehicles, BAE Systems has extensive experience with these platforms and similar armored vehicle programs. Their established presence in the defense industry suggests a capacity to deliver complex systems, though the success of any specific contract depends on detailed execution and program management.

How does this spending align with historical trends in military vehicle upgrades?

This contract aligns with historical trends in military vehicle upgrades, particularly those focused on enhancing troop survivability in asymmetric warfare environments. The significant investment in Mine-Resistant Ambush Protected (MRAP) vehicles, including the RG-31 and Cougar platforms, surged in the mid-to-late 2000s in response to threats faced in Iraq and Afghanistan. Contracts for armor kits, survivability enhancements, and upgrades to these vehicles have been a consistent part of the defense budget. The $62.7 million award represents a continuation of this trend, focusing on maintaining and improving the protection of existing, deployed vehicle fleets rather than procuring entirely new generations of vehicles.

What is the expected impact on the operational readiness of the RG-31 and Cougar MRAP fleets?

The award of UCA (Underbody Collective Armor) kits is expected to have a positive impact on the operational readiness of the RG-31 and Cougar MRAP fleets by enhancing their protection against underbody threats, such as improvised explosive devices (IEDs) and mines. Improved survivability directly contributes to troop safety, reducing casualties and increasing the confidence of vehicle crews. This, in turn, supports sustained operational tempo and mission effectiveness. By upgrading existing vehicles, the Department of the Army can maintain a capable fleet without the immediate need for costly replacements, thus preserving readiness and extending the service life of these critical assets.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 6500 TRACOR LANE, AUSTIN, TX, 90

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: $62,676,911

Exercised Options: $62,676,911

Current Obligation: $62,676,911

Contract Characteristics

Cost or Pricing Data: NO

Timeline