DoD Awards BAE Systems $399M for Radford AAP Facility Design and Construction

Contract Overview

Contract Amount: $399,397,580 ($399.4M)

Contractor: BAE Systems Ordnance Systems Inc

Awarding Agency: Department of Defense

Start Date: 2012-01-23

End Date: 2025-09-30

Contract Duration: 4,999 days

Daily Burn Rate: $79.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCT NC FACILITY AT RADFORD AAP

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24141

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $399.4 million to BAE SYSTEMS ORDNANCE SYSTEMS INC for work described as: DESIGN AND CONSTRUCT NC FACILITY AT RADFORD AAP Key points: 1. Significant investment in defense infrastructure. 2. BAE Systems is a major defense contractor. 3. Long-term contract duration raises questions about flexibility. 4. Facilities Support Services sector sees substantial spending.

Value Assessment

Rating: fair

The contract value of $399M for facility design and construction is substantial. Benchmarking against similar large-scale defense infrastructure projects is difficult without more granular cost data, but the price appears within a broad range for such complex undertakings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific award mechanism (Delivery Order) and the long duration may have limited the scope for ongoing price discovery and optimization.

Taxpayer Impact: Taxpayer funds are being utilized for a critical defense facility upgrade. The competitive award aims to ensure value, but the long-term nature warrants monitoring for cost efficiency.

Public Impact

Enhances critical defense manufacturing capabilities. Supports regional economic activity through construction and operations. Long-term commitment to a specific facility may impact future modernization adaptability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (through 2025) may not reflect evolving needs.
Lack of small business participation noted.
Firm Fixed Price contract can shift risk to contractor but may inflate initial bids.

Positive Signals

Awarded under full and open competition.
Addresses critical defense infrastructure needs.
Significant investment in national security.

Sector Analysis

This contract falls within the Facilities Support Services sector, specifically related to defense infrastructure. Spending in this area is often driven by modernization needs and national security priorities, with large contracts being common for major construction projects.

Small Business Impact

The data indicates no small business participation in this contract. Large-scale infrastructure projects often involve prime contractors who may subcontract, but direct small business involvement appears absent here, potentially missing opportunities for economic inclusion.

Oversight & Accountability

The Department of the Army, under the Department of Defense, is overseeing this contract. The long duration and significant value necessitate robust oversight to ensure adherence to scope, budget, and performance standards throughout the project lifecycle.

Related Government Programs

Facilities Support Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Long contract duration may lead to obsolescence or changing requirements.
Lack of small business participation.
Potential for cost inefficiencies in long-term fixed-price contracts.
Dependency on a single large contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $399.4 million to BAE SYSTEMS ORDNANCE SYSTEMS INC. DESIGN AND CONSTRUCT NC FACILITY AT RADFORD AAP

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 $399.4 million.

What is the period of performance?

Start: 2012-01-23. End: 2025-09-30.

What is the breakdown of costs between design and construction phases, and how does this compare to industry benchmarks for similar projects?

The provided data does not specify the cost breakdown between design and construction. A detailed analysis would require access to the contract's financial structure. Comparing this to industry benchmarks would necessitate data on the specific type of facility, its complexity, and the prevailing market rates for labor and materials during the contract's execution period.

Given the firm-fixed-price structure and long duration, what mechanisms are in place to manage potential cost overruns or scope creep if unforeseen issues arise during construction?

Firm-fixed-price contracts generally place the risk of cost overruns on the contractor. However, mechanisms like change order processes, contingency allowances, and strict scope management protocols are crucial. The contract's specific clauses regarding unforeseen issues and the government's oversight procedures would determine the effectiveness of managing these risks.

How will the effectiveness of this facility be measured post-construction, and what key performance indicators (KPIs) are being tracked during the design and build phases?

Effectiveness measurement typically involves post-occupancy evaluations and performance metrics related to the facility's intended function (e.g., production capacity, operational efficiency, safety standards). KPIs during design and build would likely focus on schedule adherence, quality control, safety compliance, and meeting technical specifications outlined in the contract.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: STATE RT 114, RADFORD, VA, 24141

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: $399,397,580

Exercised Options: $399,397,580

Current Obligation: $399,397,580

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: W52P1J11G0002

IDV Type: BOA

Timeline