DoD awards $65.7M for M1114 MCTAGS Kits to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $65,740,179 ($65.7M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2009-07-27

End Date: 2010-05-03

Contract Duration: 280 days

Daily Burn Rate: $234.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MTVR, LVSR, HMMWV FUNDING - M1114 MCTAGS KITS

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $65.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: MTVR, LVSR, HMMWV FUNDING - M1114 MCTAGS KITS Key points: 1. Contract awarded for specialized vehicle kits, indicating a need for enhanced protection. 2. Sole-source award suggests limited market availability or specific technical requirements. 3. Fixed-price contract type shifts risk to the contractor, potentially stabilizing costs. 4. Short contract duration of 280 days implies a focused, immediate need. 5. Awarded by the Department of the Navy, likely for fleet modernization or upgrades. 6. Contractor BAE Systems is a major defense manufacturer with extensive experience.

Value Assessment

Rating: fair

The contract value of $65.7 million for M1114 MCTAGS Kits appears substantial. Without specific details on the number of kits or their capabilities, a direct value-for-money assessment is challenging. However, given the sole-source nature and the specialized equipment, pricing may reflect unique manufacturing processes or limited competition. Benchmarking against similar vehicle upgrade contracts would be necessary for a more precise evaluation of cost-effectiveness.

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 approach is typically used when only one vendor possesses the necessary technical expertise, proprietary technology, or when urgent needs preclude a competitive process. The lack of competition limits price discovery and may result in higher costs compared to a fully competed contract.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as the government did not leverage market forces to secure the best possible price.

Public Impact

Personnel operating M1114 vehicles will benefit from enhanced survivability and protection. The kits are intended to upgrade existing military vehicles, extending their service life. Geographic impact is likely concentrated within military operational theaters where these vehicles are deployed. The contract supports jobs within BAE Systems and its supply chain, primarily in manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the procurement process due to non-competitive award.
Potential for cost overruns if pricing was not adequately scrutinized in a sole-source environment.

Positive Signals

Contract addresses a specific, likely critical, need for vehicle survivability.
Fixed-price contract type provides cost certainty for the government.
Award to an experienced defense contractor like BAE Systems suggests a focus on reliability and performance.

Sector Analysis

The defense manufacturing sector is characterized by high technological barriers to entry and significant government investment. Contracts for armored vehicle components and upgrades are a crucial part of this sector, ensuring the operational readiness of military forces. BAE Systems is a major player in this market, competing with other large defense contractors. Spending in this area is often driven by evolving threats and the need for advanced protection systems.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large prime contractor like BAE Systems suggests that the primary focus is on large-scale manufacturing capabilities. Opportunities for small businesses would likely be through subcontracts awarded by BAE Systems, the extent of which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny might focus on the justification for non-competition and the reasonableness of the price. Inspector General investigations could be initiated if any irregularities or fraud were suspected. Transparency is limited due to the non-competitive nature, but contract performance and payment data are usually tracked.

Related Government Programs

Military Vehicle Modernization Programs
Armored Vehicle Component Manufacturing
Tactical Vehicle Upgrades
Department of Defense Procurement

Risk Flags

Sole-source award may indicate limited competition, potentially leading to higher costs.
Lack of detailed performance metrics in the provided data makes outcome assessment difficult.
Contract duration is relatively short, suggesting a specific, possibly urgent, need.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. MTVR, LVSR, HMMWV FUNDING - M1114 MCTAGS KITS

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 Navy).

What is the total obligated amount?

The obligated amount is $65.7 million.

What is the period of performance?

Start: 2009-07-27. End: 2010-05-03.

What specific capabilities do the M1114 MCTAGS Kits provide, and how do they enhance vehicle survivability?

The M1114 MCTAGS (Mine-Cat Anti-Ambush Protection System) Kits are designed to significantly improve the survivability of the M1114 Up-Armored HMMWV (High Mobility Multipurpose Wheeled Vehicle) against threats such as improvised explosive devices (IEDs) and mine blasts. These kits typically include enhanced armor plating, specialized seating designed to absorb blast energy, underbody protection, and potentially improved mine-resistant features. By mitigating the effects of explosions and shrapnel, the kits aim to reduce casualties and increase the likelihood of vehicle and crew survival in high-threat environments. The specific components and level of protection can vary based on the exact kit configuration and upgrade package.

Why was this contract awarded on a sole-source basis, and what are the implications for cost?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's requirements. For specialized military equipment like the MCTAGS Kits for the M1114, this could be due to proprietary technology held by BAE Systems, unique manufacturing capabilities, or a requirement for seamless integration with existing platforms where only BAE Systems has the necessary expertise. The implication for cost is generally an increase compared to a competitive procurement. Without competition, the government loses the benefit of price negotiation driven by multiple bidders, potentially leading to a higher final price. However, the government may still negotiate pricing and conduct cost analyses to ensure reasonableness.

What is the typical track record of BAE Systems Land & Armaments L.P. in supplying similar military vehicle components?

BAE Systems Land & Armaments L.P. is a major global defense contractor with a long and extensive track record in designing, manufacturing, and supporting a wide range of military vehicles, armored systems, and related components. They are known for producing platforms such as the Bradley Fighting Vehicle, M109 Paladin, and various armored personnel carriers. Their experience includes integrating advanced protection systems, survivability enhancements, and weapon systems onto military platforms. Given their significant presence in the armored vehicle market, supplying kits like MCTAGS for HMMWVs aligns with their core competencies and historical contract awards.

How does the $65.7 million contract value compare to historical spending on similar vehicle upgrade programs?

Comparing the $65.7 million contract value requires context on the number of kits procured and the specific upgrades included. Historical spending on vehicle upgrade programs can vary widely. For instance, full vehicle modernization programs can run into hundreds of millions or even billions of dollars. However, for specific upgrade kits designed to enhance survivability on a particular vehicle platform like the M1114, $65.7 million could represent a significant investment for a specific fleet or set of operational needs. Without knowing the quantity of kits or the specific technological advancements they represent, direct comparison to other programs is difficult, but it indicates a substantial procurement for enhanced protection.

What are the potential risks associated with a sole-source contract for military hardware?

The primary risks associated with a sole-source contract for military hardware include higher costs due to lack of competition, potential for complacency from the contractor regarding innovation or efficiency, and reduced transparency in the procurement process. There's also a risk that the government might not be getting the absolute best value available in the market. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain if that contractor faces production issues or financial instability. Effective contract management, rigorous price negotiation, and thorough technical oversight are crucial to mitigate these risks.

What is the significance of the 'firm fixed price' contract type in this context?

A Firm Fixed Price (FFP) contract type means that the contractor, BAE Systems, is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This shifts the cost risk from the government to the contractor. For the Department of Defense, this provides budget certainty and predictability, as the final cost is known upfront. It incentivizes the contractor to manage its costs efficiently to maximize profit. However, FFP contracts can sometimes lead to higher initial prices to account for the contractor's risk, and they may not be suitable for contracts with high uncertainty or evolving requirements where cost-plus contracts might be more appropriate.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785408R6022

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 2890 DE LA CRUZ BLVD, SANTA CLARA, CA, 17

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership

Financial Breakdown

Contract Ceiling: $65,740,179

Exercised Options: $65,740,179

Current Obligation: $65,740,179

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: M6785409D5026

IDV Type: IDC

Timeline