DoD Awards $90.4M for 1,743 lbs of C-4 Explosives to BAE Systems

Contract Overview

Contract Amount: $90,362,758 ($90.4M)

Contractor: BAE Systems Ordnance Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2009-02-13

End Date: 2014-03-31

Contract Duration: 1,872 days

Daily Burn Rate: $48.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PRODUCTION AND SUPPLY OF 1,743 POUNDS OF COMP C-4, CLASS 3 (TAGGED) IAW THE REQUIREMENTS OF MIL-C-45010.

Place of Performance

Location: KINGSPORT, SULLIVAN County, TENNESSEE, 37660

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $90.4 million to BAE SYSTEMS ORDNANCE SYSTEMS INC. for work described as: PRODUCTION AND SUPPLY OF 1,743 POUNDS OF COMP C-4, CLASS 3 (TAGGED) IAW THE REQUIREMENTS OF MIL-C-45010. Key points: 1. Significant contract for essential military explosives. 2. Sole-source award to BAE Systems Ordnance Systems Inc. 3. Potential for higher costs due to lack of competition. 4. Manufacturing sector: Explosives Manufacturing.

Value Assessment

Rating: fair

The contract value of $90.4M for 1,743 lbs of C-4 is difficult to benchmark without specific per-unit cost data. The firm fixed-price contract type suggests price certainty, but the lack of competition raises concerns about optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This limits price discovery and may result in higher costs for taxpayers compared to a competitive procurement.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not have received the best possible price for these explosives.

Public Impact

Ensures supply of critical explosives for military operations. Supports a specialized manufacturing capability within the defense industrial base. Lack of competition raises questions about long-term cost-effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Long contract duration (2009-2014) may not reflect current market prices.
No small business participation indicated.

Positive Signals

Ensures critical supply of a specialized defense material.
Firm fixed-price contract provides cost certainty.

Sector Analysis

The Explosives Manufacturing sector is highly specialized and often dominated by a few key players due to stringent safety and regulatory requirements. Spending in this area is directly tied to defense needs and national security priorities.

Small Business Impact

There is no indication of small business participation in this contract. The nature of explosives manufacturing often requires specialized facilities and certifications that may limit small business involvement.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the price paid was fair and reasonable. Further review of the justification for sole-source procurement would be beneficial.

Related Government Programs

Explosives Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
No small business participation
Potential for overpayment
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $90.4 million to BAE SYSTEMS ORDNANCE SYSTEMS INC.. PRODUCTION AND SUPPLY OF 1,743 POUNDS OF COMP C-4, CLASS 3 (TAGGED) IAW THE REQUIREMENTS OF MIL-C-45010.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS ORDNANCE SYSTEMS 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 $90.4 million.

What is the period of performance?

Start: 2009-02-13. End: 2014-03-31.

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

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of adequate competition. Without specific documentation, it's difficult to ascertain the precise reasons, but it implies that only BAE Systems Ordnance Systems Inc. was deemed capable of meeting the requirement at the time of procurement.

How does the unit cost compare to similar historical or market-based contracts for C-4?

Benchmarking the unit cost is challenging without access to detailed pricing data or comparable contracts. However, sole-source awards generally carry a higher risk of inflated prices compared to competitively bid contracts. A thorough cost analysis would be needed to determine if the price was indeed fair and reasonable.

What is the long-term strategic impact of relying on a sole-source provider for critical explosives?

Long-term reliance on a sole-source provider can create vulnerabilities in the supply chain and reduce negotiating leverage. It may also stifle innovation and competition within the sector. Diversifying the supplier base or fostering new entrants could mitigate these risks and potentially lower costs over time.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

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

Address: 4509 W STONE DR, KINGSPORT, TN, 37660

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $90,362,758

Exercised Options: $90,362,758

Current Obligation: $90,362,758

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J09D0003

IDV Type: IDC

Timeline