DoD awards $37.8M for armored vehicle kits, with BAE Systems securing the contract

Contract Overview

Contract Amount: $37,856,337 ($37.9M)

Contractor: BAE Systems Tactical Vehicle Systems LP

Awarding Agency: Department of Defense

Start Date: 2011-04-27

End Date: 2013-04-30

Contract Duration: 734 days

Daily Burn Rate: $51.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ECP - OGPK SPOTLIGHT KITS

Place of Performance

Location: SEALY, COLORADO County, TEXAS, 77474

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $37.9 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP for work described as: ECP - OGPK SPOTLIGHT KITS Key points: 1. Contract value represents a significant investment in tactical vehicle sustainment. 2. BAE Systems, a major defense contractor, likely leveraged existing production capabilities. 3. The contract duration suggests a need for ongoing support and parts. 4. Fixed-price contract type aims to control costs for the government. 5. The award falls within the broader defense manufacturing sector, characterized by high entry barriers. 6. Competition dynamics for such specialized equipment can be limited due to technical requirements.

Value Assessment

Rating: fair

The contract value of $37.8 million for armored vehicle kits appears reasonable given the specialized nature of military hardware. Benchmarking against similar contracts for vehicle components or upgrades would provide a clearer picture of value for money. The firm fixed-price structure suggests an attempt to cap costs, but without detailed cost breakdowns, a precise value assessment is challenging. The award amount is substantial, indicating a significant procurement for 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 multiple bidders were likely considered. The presence of 10 bidders suggests a reasonably competitive environment for this specific requirement. However, the specialized nature of military armored vehicle components may limit the pool of truly capable and competitive firms, even within a full and open process. The level of competition is a positive sign for price discovery.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among defense contractors.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize the armored vehicle kits, enhancing their protection and operational capabilities. The contract delivers essential components for maintaining and upgrading military armored vehicles, ensuring readiness. The geographic impact is primarily centered around BAE Systems' facilities in Texas, contributing to local employment and economic activity. Workforce implications include skilled manufacturing jobs in specialized areas of defense production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise during production.
Reliance on a single prime contractor for critical vehicle components could pose supply chain risks.
The long-term sustainment costs beyond the initial contract award are not detailed.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Award to a well-established defense contractor like BAE Systems indicates a degree of reliability and experience.

Sector Analysis

The defense manufacturing sector is characterized by high capital investment, stringent regulatory requirements, and long product development cycles. Contracts for armored vehicles and their components are a significant segment within this sector. Spending benchmarks for similar vehicle upgrades or new platform procurements can vary widely based on technological sophistication and quantity. This contract fits within the broader strategy of modernizing military equipment.

Small Business Impact

The contract details do not indicate any specific small business set-asides. While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors, particularly in supplying specialized parts or services. The extent of small business subcontracting would depend on BAE Systems' internal policies and the specific requirements of the kits.

Oversight & Accountability

The Department of Defense employs various oversight mechanisms, including contract administration by the Defense Contract Management Agency (DCMA), to monitor performance and ensure compliance. The firm fixed-price nature of the contract provides a degree of accountability for the contractor to deliver within the agreed budget. Transparency is generally maintained through contract award databases, though detailed cost breakdowns are often proprietary.

Related Government Programs

Armored Vehicle Production
Military Vehicle Components
Tactical Vehicle Sustainment
Defense Manufacturing Contracts

Risk Flags

Potential for supply chain disruptions
Technical integration challenges
Quality control adherence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.9 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP. ECP - OGPK SPOTLIGHT KITS

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 $37.9 million.

What is the period of performance?

Start: 2011-04-27. End: 2013-04-30.

What is the historical spending pattern for armored vehicle kits by the Department of Defense over the last five years?

Historical spending on armored vehicle kits by the Department of Defense can fluctuate significantly based on modernization priorities, operational tempo, and geopolitical events. While specific data for 'armored vehicle kits' as a distinct category might be aggregated within broader vehicle procurement or sustainment budgets, trends indicate consistent investment in maintaining and upgrading armored fleets. For instance, periods of heightened conflict or strategic shifts towards near-peer competition often see increased spending on advanced protection systems and vehicle upgrades. Analyzing broader categories like 'wheeled combat vehicles' or 'armored personnel carriers' procurement and sustainment over the past five years would reveal overall investment levels. Without access to granular historical data specifically for 'kits,' it's challenging to provide precise figures, but the general trend points towards sustained, albeit variable, investment driven by defense readiness requirements.

How does the unit cost of these ECP - OGPK SPOTLIGHT KITS compare to similar kits procured by other military branches or allied nations?

Comparing the unit cost of these ECP - OGPK SPOTLIGHT KITS requires access to detailed cost breakdowns and comparable procurement data, which is often not publicly available. The contract value of $37.8 million awarded to BAE Systems for an unspecified number of kits makes calculating a precise unit cost difficult. However, the nature of armored vehicle kits suggests they are specialized, high-value components. If we assume a hypothetical number of kits, the unit cost would likely be in the tens or hundreds of thousands of dollars, depending on the complexity and technology involved. Benchmarking against similar upgrades for platforms like the Stryker or Abrams tanks, or against procurements by allied nations for comparable protection systems, would be necessary. Factors such as the level of ballistic protection, integration complexity, and the specific technologies employed (e.g., active protection systems) heavily influence unit costs. Without direct comparative data, a definitive assessment of value-for-money against peers is speculative.

What is BAE Systems' track record with Department of Defense contracts, particularly for armored vehicle components?

BAE Systems has a substantial and long-standing track record with the Department of Defense, encompassing a wide array of programs, including the design, production, and sustainment of armored vehicles and their components. They are a major prime contractor for numerous platforms, such as the Bradley Fighting Vehicle, M109 Paladin, and the Armored Multi-Purpose Vehicle (AMPV). Their experience extends to integrating advanced technologies, including survivability enhancements and weapon systems. The company has consistently secured large-value contracts for vehicle production, upgrades, and spare parts. While specific performance metrics for every contract are not always public, BAE Systems' continued success in winning competitive bids and receiving follow-on awards suggests a generally positive performance history and a strong capability in meeting DoD requirements for armored vehicle systems and related components.

What are the primary risks associated with the production and delivery of these armored vehicle kits?

The primary risks associated with the production and delivery of armored vehicle kits include supply chain disruptions, potential for technical issues during integration, and adherence to strict quality control standards. Given the specialized nature of the components, reliance on a complex supply chain for raw materials and sub-components presents a risk of delays. Furthermore, integrating these kits onto existing vehicle platforms can uncover unforeseen technical challenges that may require design modifications or extended testing, potentially impacting schedules and costs. Ensuring consistent quality and performance across all delivered kits is paramount, as any deficiencies could compromise vehicle survivability and operational effectiveness. The firm fixed-price nature of the contract also places the financial risk of cost overruns primarily on the contractor, incentivizing them to manage these risks proactively.

How does the $37.8 million contract value fit into the overall DoD budget for ground vehicle modernization?

The $37.8 million contract value for ECP - OGPK SPOTLIGHT KITS represents a specific investment within the broader Department of Defense budget allocated for ground vehicle modernization. While substantial on its own, it is a component of a much larger overall spending picture. The DoD's annual budget for research, development, testing, evaluation, procurement, and sustainment of ground vehicles typically runs into the tens of billions of dollars. This contract likely addresses a particular need for enhancing the protection or capability of existing armored vehicles, contributing to the ongoing effort to maintain a technologically advanced and combat-ready ground force. Its significance within the overall modernization strategy depends on the criticality of the kits and the number of vehicles they are intended to equip. It signifies a focused effort on survivability upgrades for a specific vehicle type or fleet.

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 (UEI: 217304393)

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,856,337

Exercised Options: $37,856,337

Current Obligation: $37,856,337

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785407D5030

IDV Type: IDC

Timeline