BAE Systems awarded $762M for CAIMAN MTV chassis, with a significant portion for military vehicle manufacturing

Contract Overview

Contract Amount: $762,165,355 ($762.2M)

Contractor: BAE Systems Tactical Vehicle Systems LP

Awarding Agency: Department of Defense

Start Date: 2010-09-02

End Date: 2013-03-31

Contract Duration: 941 days

Daily Burn Rate: $810.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CAIMAN MTV (CMTV) CHASSIS

Place of Performance

Location: SEALY, COLORADO County, TEXAS, 77474

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $762.2 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP for work described as: CAIMAN MTV (CMTV) CHASSIS Key points: 1. Contract value represents substantial investment in armored vehicle production. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type aims to control costs for the government. 4. Delivery order structure indicates phased procurement over time. 5. Contract duration of over two years suggests a sustained need for these chassis. 6. The award is concentrated in Texas, highlighting regional industrial capacity.

Value Assessment

Rating: good

The total contract value of $762 million for CAIMAN MTV chassis is significant, reflecting the scale of military vehicle production. While specific per-unit cost benchmarks are not provided, the firm fixed-price nature of the contract suggests an effort to establish predictable costs. Comparing this to similar large-scale armored vehicle chassis procurements would offer further insight into its value proposition. The contract's duration and the number of delivery orders indicate a sustained and substantial commitment by the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 10 delivery orders suggests a structured approach to fulfilling the requirement over time. The level of competition, while not explicitly detailed by the number of bidders, is generally expected to drive more competitive pricing and potentially better terms for the government when conducted openly.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of suppliers to bid, potentially leading to lower prices and greater innovation. This process helps ensure that the government is obtaining the best value for its investment in critical defense equipment.

Public Impact

The primary beneficiaries are the Department of Defense, which receives essential armored vehicle chassis for its military operations. The contract supports the production of CAIMAN MTV (CMTV) chassis, crucial components for modern military vehicles. The geographic impact is concentrated in Texas, where BAE Systems Tactical Vehicle Systems LP is located, potentially boosting the regional economy and defense industrial base. Workforce implications include employment opportunities at BAE Systems and its subcontractors involved in the manufacturing and supply chain for these chassis.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial pricing does not accurately reflect long-term production complexities.
Dependence on a single contractor (BAE Systems) for a critical component could pose supply chain risks.
The long duration of the contract may lead to technological obsolescence if not managed proactively.

Positive Signals

Firm fixed-price contract structure provides cost certainty for the government.
Full and open competition suggests a robust market engagement and potential for competitive pricing.
The award to an established defense contractor like BAE Systems indicates a reliance on proven manufacturing capabilities.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on armored vehicle components. The market for military vehicles and their components is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Spending in this area is driven by national security needs and geopolitical factors. Comparable spending benchmarks would involve analyzing other large-scale chassis or vehicle procurements by the DoD or allied nations.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there is no explicit mention of small business set-asides for this contract. This suggests that the primary award was made to a large business, and subcontracting opportunities for small businesses would depend on BAE Systems' internal policies and the specific requirements of the contract. Further analysis would be needed to determine the extent of small business involvement through subcontracting.

Oversight & Accountability

Oversight for this contract would likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to meet cost targets. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Armored Vehicle Manufacturing
Tactical Vehicle Production
Defense Contract Management
Heavy Equipment Manufacturing
Department of Defense Procurement

Risk Flags

Long contract duration may increase risk of technological obsolescence.
High contract value necessitates rigorous oversight to ensure value for money.
Dependence on a single contractor for critical components can pose supply chain risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $762.2 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP. CAIMAN MTV (CMTV) CHASSIS

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 $762.2 million.

What is the period of performance?

Start: 2010-09-02. End: 2013-03-31.

What is the historical spending pattern for CAIMAN MTV chassis procurements by the Department of Defense?

Analyzing historical spending for CAIMAN MTV chassis requires accessing detailed procurement data over multiple fiscal years. This specific contract, awarded in 2010 with an end date in 2013, represents a significant investment during that period. To understand the broader pattern, one would need to examine prior awards for the CAIMAN program and potentially its predecessors, as well as subsequent procurements of similar armored vehicle chassis. Factors such as program evolution, technological upgrades, and changes in military requirements would influence spending trends. Without access to a comprehensive historical database covering the entire lifecycle of the CAIMAN program and related platforms, a precise historical spending pattern cannot be fully delineated from this single data point.

How does the per-unit cost of the CAIMAN MTV chassis compare to similar armored vehicle platforms?

Determining the exact per-unit cost of the CAIMAN MTV chassis from the provided data is not possible, as the total contract value is for a quantity of chassis and associated services, not a simple per-unit price. To benchmark this against similar platforms, one would need to identify comparable armored vehicle chassis procurements (e.g., for Stryker, JLTV, or other MRAPs) from the same or similar timeframes. Then, the total contract values and quantities awarded for those platforms would be divided to derive per-unit costs. These figures would then be adjusted for inflation and technological differences. The $762 million contract for an unspecified number of CMTV chassis suggests a substantial investment per unit, typical for advanced armored military vehicles, but a direct comparison requires more granular data on competing platforms.

What are the key performance indicators (KPIs) used to evaluate BAE Systems' performance on this contract?

The provided contract data does not explicitly list the Key Performance Indicators (KPIs) used to evaluate BAE Systems' performance. However, for a contract of this nature (firm fixed-price, delivery orders), typical KPIs would likely include on-time delivery of chassis, adherence to quality specifications (e.g., defect rates, material compliance), production schedule adherence, and potentially cost control within the fixed-price framework. The Department of Defense and the Defense Contract Management Agency (DCMA) would establish these metrics, often detailed in the contract's statement of work or performance clauses. Failure to meet these KPIs could result in contractual remedies, including penalties or termination.

What is the track record of BAE Systems Tactical Vehicle Systems LP in delivering large-scale military vehicle components?

BAE Systems Tactical Vehicle Systems LP has a significant track record in delivering large-scale military vehicle components and platforms. As a major defense contractor, the company has been involved in the production of numerous armored vehicles, including various Mine-Resistant Ambush Protected (MRAP) variants, the Bradley Fighting Vehicle, and other tactical wheeled vehicles. Their experience encompasses complex manufacturing processes, supply chain management for specialized materials, and integration of advanced technologies. Awards like the CAIMAN MTV chassis contract are indicative of their established capabilities and the trust placed in them by the Department of Defense for critical defense systems. Their history suggests a capacity to handle substantial production volumes and meet stringent military requirements.

What are the potential risks associated with the long duration and substantial value of this contract?

The substantial value ($762 million) and duration (941 days) of this contract present several potential risks. Firstly, there's the risk of cost escalation if the firm fixed-price model doesn't adequately account for unforeseen increases in material, labor, or manufacturing complexities over the contract period. Secondly, the long timeline increases the possibility of technological obsolescence; military vehicle technology evolves, and chassis produced early in the contract might be less advanced than those needed later. Thirdly, a prolonged, high-value contract can create dependency, making the government vulnerable if the contractor faces financial instability or production disruptions. Finally, ensuring consistent quality and performance over an extended period requires robust oversight and contractor commitment.

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

Solicitation ID: M6785407R5000

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 5000 INTERSTATE HWY 10 W, SEALY, TX, 77474

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $762,165,355

Exercised Options: $762,165,355

Current Obligation: $762,165,355

Subaward Activity

Number of Subawards: 124

Total Subaward Amount: $99,470,051

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5030

IDV Type: IDC

Timeline