DoD's $38.4M contract for operational training devices awarded to BAE Systems Land & Armaments L.P

Contract Overview

Contract Amount: $38,436,597 ($38.4M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2005-06-15

End Date: 2012-07-31

Contract Duration: 2,603 days

Daily Burn Rate: $14.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200509!279346!1700!N61339!NAVAL AIR WARFARE CENTER !N6133901D0729 !A!N! !N!0002 ! !20050615!20060428!085302958!824825459!217304393!N!BAE SYSTEMS LAND & ARMAMENTS L!1205 COLEMAN AVENUE !SANTA CLARA !CA!95050!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000010441598!N!N!000000000000!6930!OPERATIONAL TRAINING DEVICES !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !336999!A!A!5!B!M! !A! !20200930!B! ! !A! !D!U!Y!1!001!N!1A!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! !1719!N61339!0001! !

Place of Performance

Location: SANTA CLARA, SANTA CLARA County, CALIFORNIA, 95050

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $38.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200509!279346!1700!N61339!NAVAL AIR WARFARE CENTER !N6133901D0729 !A!N! !N!0002 ! !20050615!20060428!085302958!824825459!217304393!N!BAE SYSTEMS LAND & ARMAMENTS L!1205 COLEMAN AVENUE !SANTA CLARA !CA!95050!53000!095!12!ORLANDO !ORAN… Key points: 1. Contract awarded for operational training devices, indicating a need for advanced simulation and training capabilities. 2. The contract's duration of over 7 years suggests a long-term requirement for these training solutions. 3. Awarded as a sole-source contract, raising questions about potential cost efficiencies and market competition. 4. The significant value of the contract highlights the substantial investment in military training technology. 5. The contractor, BAE Systems, is a major defense manufacturer with extensive experience in complex systems. 6. The contract falls under the 'All Other Transportation Equipment Manufacturing' NAICS code, suggesting specialized equipment.

Value Assessment

Rating: fair

The contract value of $38.4 million for operational training devices over a period of approximately 7 years appears substantial. Without specific benchmarks for comparable training devices or detailed cost breakdowns, it is difficult to definitively assess value for money. However, given the specialized nature of military training equipment and the sole-source award, the pricing may reflect unique capabilities and development costs. Further analysis would require comparison with similar systems procured through competitive means or detailed cost-plus data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or when there are urgent needs that preclude a full and open competition. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price. The government relies on negotiation and oversight to ensure fair pricing, but the absence of competitive pressure can limit cost savings.

Public Impact

The primary beneficiaries are likely military personnel who will utilize the operational training devices to enhance their skills and readiness. The services delivered include the provision of advanced training systems, crucial for modern military operations. The geographic impact is primarily within the Department of the Army, supporting their training infrastructure. Workforce implications may include specialized technical support and maintenance roles related to the training devices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Long contract duration (over 7 years) may not fully account for technological advancements or market shifts.
Lack of detailed public information on performance metrics makes it difficult to assess effectiveness.
The 'All Other Transportation Equipment Manufacturing' classification is broad and may obscure the specific nature of the training devices.

Positive Signals

Award to a major defense contractor (BAE Systems) suggests a high likelihood of technical capability and experience.
The contract addresses a critical need for operational training, essential for military readiness.
The substantial investment indicates a commitment to equipping the military with advanced training tools.

Sector Analysis

This contract falls within the defense sector, specifically related to military training and simulation equipment. The market for such specialized systems is often dominated by a few large defense contractors due to high research and development costs and stringent performance requirements. Comparable spending benchmarks are difficult to establish without knowing the exact specifications of the training devices, but significant investments in simulation technology are common across all branches of the U.S. military.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. As a sole-source award to a large prime contractor, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued through a competitive set-aside process. The primary focus would be on the prime contractor's ability to deliver the specialized training devices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Accountability measures would be tied to the contract's performance clauses, delivery schedules, and technical specifications. Transparency is limited due to the sole-source nature and the proprietary aspects of defense technology. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Training Simulators
Defense Logistics Agency Contracts
Naval Air Warfare Center Contracts
Operational Readiness Programs
Defense Procurement

Risk Flags

Sole-source award
Long contract duration
Potential for cost overruns
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200509!279346!1700!N61339!NAVAL AIR WARFARE CENTER !N6133901D0729 !A!N! !N!0002 ! !20050615!20060428!085302958!824825459!217304393!N!BAE SYSTEMS LAND & ARMAMENTS L!1205 COLEMAN AVENUE !SANTA CLARA !CA!95050!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000010441598!N!N!000000000000!6930!OPERATIONAL TRAINING DEVICES !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !336999!A!A!5!B!M! !A! !202

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 $38.4 million.

What is the period of performance?

Start: 2005-06-15. End: 2012-07-31.

What specific types of operational training devices were procured under this contract, and what are their key functionalities?

The data indicates the contract was for 'OPERATIONAL TRAINING DEVICES' under NAICS code 336999 ('All Other Transportation Equipment Manufacturing'). While the specific functionalities are not detailed, operational training devices in a military context typically encompass a wide range of simulators and virtual reality systems designed to replicate real-world scenarios for pilot training, vehicle operation, combat simulations, or tactical decision-making. These can range from flight simulators for aircraft to complex virtual environments for ground troop training. The 'Transportation Equipment' classification might suggest devices related to the operation or maintenance of military vehicles, aircraft, or naval vessels.

How does the $38.4 million contract value compare to other similar procurements for operational training devices within the Department of Defense?

Direct comparison of the $38.4 million contract value is challenging without knowing the precise specifications and capabilities of the training devices procured. However, major defense procurements for advanced simulation and training systems can range from tens of millions to billions of dollars, depending on complexity, scale, and technological sophistication. Given that this was a sole-source award over approximately seven years, the value appears consistent with specialized, long-term defense investments. To provide a more accurate benchmark, one would need to identify contracts for similar types of simulators (e.g., flight simulators, vehicle simulators) awarded competitively or through other sole-source actions, and analyze their total contract values and durations.

What are the primary risks associated with a sole-source award for such a significant defense contract?

The primary risk associated with a sole-source award is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Other risks include vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility or innovation. There's also a risk that the sole-source justification might not be as robust as it could be, potentially masking inefficiencies or a lack of market research. Ensuring fair and reasonable pricing relies heavily on strong negotiation and oversight from the contracting agency.

What is BAE Systems Land & Armaments L.P.'s track record with the Department of Defense, particularly in delivering training systems?

BAE Systems Land & Armaments L.P. is a major defense contractor with a substantial history of providing a wide array of products and services to the Department of Defense. Their portfolio includes armored vehicles, naval systems, munitions, and electronic warfare systems. While this specific data point focuses on training devices, BAE Systems has been involved in developing and supplying various simulation and training solutions, often integrated with their primary platforms. Their extensive experience suggests a strong capability to deliver complex defense systems, though performance on individual contracts can vary and is subject to oversight.

What does the contract's duration of over 7 years imply about the expected lifecycle and obsolescence of these training devices?

A contract duration of over 7 years (from June 15, 2005, to July 31, 2012, based on the start and end dates) for operational training devices suggests that these systems are expected to have a significant operational lifespan and are likely designed for long-term use. This duration implies a substantial investment in technology that is not expected to become rapidly obsolete. However, it also presents a risk: military technology evolves quickly, and a 7-year lifecycle might mean the devices are nearing obsolescence by the end of their service life, or that upgrades and sustainment costs will be significant. The government would need robust sustainment and upgrade plans to maximize the utility of these devices.

How does the 'All Other Transportation Equipment Manufacturing' (NAICS 336999) classification align with 'Operational Training Devices'?

The classification of 'Operational Training Devices' under NAICS 336999 ('All Other Transportation Equipment Manufacturing') is somewhat unusual but can be rationalized. This NAICS code covers establishments primarily engaged in manufacturing transportation equipment not elsewhere classified. If the training devices are highly specialized simulators for operating or maintaining specific types of military transportation assets (like aircraft, vehicles, or naval vessels), their manufacturing could fall under this category, especially if they incorporate complex mechanical or electro-mechanical components akin to those found in transportation equipment. It suggests the devices are likely tied to the physical operation or simulation of such equipment.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › All Other Transportation Equipment Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1205 COLEMAN AVENUE, SANTA CLARA, CA, 95050

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,436,597

Exercised Options: $38,436,597

Current Obligation: $38,436,597

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: N6133901D0729

IDV Type: IDC

Timeline