DoD awards $657M for MRAP vehicles to BAE Systems, raising questions on value and competition
Contract Overview
Contract Amount: $657,131,949 ($657.1M)
Contractor: BAE Systems Tactical Vehicle Systems LP
Awarding Agency: Department of Defense
Start Date: 2007-07-13
End Date: 2010-02-28
Contract Duration: 961 days
Daily Burn Rate: $683.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DELIVERY ORDER CAT I AND CAT II MRAP VEHICLES
Place of Performance
Location: SEALY, COLORADO County, TEXAS, 77474
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $657.1 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP for work described as: DELIVERY ORDER CAT I AND CAT II MRAP VEHICLES Key points: 1. Significant contract value of $657M for specialized military vehicles. 2. BAE Systems is a major defense contractor, indicating potential market concentration. 3. Risk of cost overruns and performance issues in complex vehicle manufacturing. 4. Spending falls within the Defense sector, specifically armored vehicle manufacturing.
Value Assessment
Rating: fair
The contract value of $657M for MRAP vehicles appears substantial. Benchmarking against similar contracts for armored vehicles is difficult without more specific cost data, but the scale suggests a need for careful cost oversight.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific details of the bidding process and the number of bidders are not provided, making it hard to fully assess the competitive pressure.
Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently, but the final cost-effectiveness depends on the negotiated price and actual performance.
Public Impact
Direct impact on military readiness and troop safety through provision of MRAP vehicles. Potential economic impact on the region where BAE Systems operates. Highlights the significant investment in military vehicle modernization by the DoD.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed cost breakdown for unit pricing.
- Limited information on the competitive landscape beyond 'full and open'.
- Potential for scope creep in a multi-year delivery order.
Positive Signals
- Awarded under full and open competition.
- Contract is for critical military equipment (MRAP vehicles).
- Firm Fixed Price contract type can limit cost risk for the government.
Sector Analysis
This spending is within the Defense sector, specifically the manufacturing of military armored vehicles. Benchmarks for such specialized equipment are highly variable, but $657M represents a significant investment in this niche.
Small Business Impact
The data indicates the prime contractor is BAE Systems Tactical Vehicle Systems LP, a large entity. There is no explicit information on small business participation in this specific contract, which is a common concern in large defense procurements.
Oversight & Accountability
The contract falls under the purview of the Defense Contract Management Agency (DCMA), suggesting oversight is in place. However, the effectiveness of this oversight in managing costs and ensuring performance for a $657M contract requires further investigation.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns despite Firm Fixed Price.
- Limited transparency on competitive bidding details.
- Lack of specific performance metrics in provided data.
- No explicit mention of small business subcontracting.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, tx, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $657.1 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP. DELIVERY ORDER CAT I AND CAT II MRAP VEHICLES
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $657.1 million.
What is the period of performance?
Start: 2007-07-13. End: 2010-02-28.
What was the total number of bids received during the full and open competition, and how did the winning bid compare to others?
The provided data states 'full and open competition' but does not specify the number of bids received. Understanding the competitive intensity is crucial for assessing if the government secured the best possible price. A low number of bids, even in an open competition, could indicate limited market options or other factors influencing pricing.
Are there any performance metrics or key milestones associated with this delivery order, and how are they being tracked?
The data indicates a delivery order with a duration of 961 days. While the contract type is Firm Fixed Price, effective oversight requires clear performance metrics and milestones to ensure timely delivery and quality. Without this information, assessing the risk of delays or subpar quality is challenging.
How does the per-unit cost of these MRAP vehicles compare to industry benchmarks or previous acquisitions of similar vehicles?
The total contract value is $657M over 961 days, with 10 delivery orders. However, the specific per-unit cost is not provided, making direct comparison difficult. Benchmarking is essential to determine if the government is receiving good value for money, especially given the specialized nature of MRAP vehicles.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SEALED BID
Offers Received: 10
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 5000 INTERSTATE HWY 10 W, SEALY, TX, 77474
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $657,131,949
Exercised Options: $657,131,949
Current Obligation: $657,131,949
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: M6785407D5030
IDV Type: IDC
Timeline
Start Date: 2007-07-13
Current End Date: 2010-02-28
Potential End Date: 2010-02-28 00:00:00
Last Modified: 2018-10-17
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