DoD awards $21.5M for Signal Data Converters to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $21,526,150 ($21.5M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2010-03-24

End Date: 2012-02-28

Contract Duration: 706 days

Daily Burn Rate: $30.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CV-3338B/ASN-128D SIGNAL DATA CONVERTER

Place of Performance

Location: WAYNE, PASSAIC County, NEW JERSEY, 07470

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $21.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: CV-3338B/ASN-128D SIGNAL DATA CONVERTER Key points: 1. Contract awarded for specialized electronic components, indicating a need for specific technological capabilities. 2. Sole-source award suggests limited market availability or a unique capability held by the contractor. 3. The contract duration of 706 days points to a moderately complex or lengthy integration process. 4. Fixed-price contract type aims to control costs, but sole-source nature may limit price negotiation. 5. Awarded by the Department of the Army, aligning with broader defense modernization efforts. 6. The North American Industry Classification System (NAICS) code 334511 points to a manufacturing focus for navigation and guidance systems.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized equipment involved. Without competitive bids, it's difficult to ascertain if the $21.5 million represents a fair market price. The fixed-price contract type offers some cost control, but the lack of competition inherently limits the government's ability to secure the best possible value. Further analysis would require understanding the specific technical requirements and comparing them to similar, if available, sole-source procurements for comparable systems.

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. This typically occurs when only one responsible source is available or when a compelling justification for other than full and open competition exists. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competition. Without bids from multiple vendors, the government could not leverage market forces to drive down the price of these critical signal data converters.

Public Impact

The primary beneficiary is the Department of the Army, which receives essential components for its operational systems. The contract delivers specialized signal data converters, crucial for navigation, guidance, and detection systems. The geographic impact is primarily within New Jersey, where BAE Systems' relevant facility is located. Workforce implications include the employment of skilled manufacturing and engineering personnel at BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Dependence on a single contractor for critical components can pose supply chain risks.

Positive Signals

Award to an established defense contractor with presumed expertise in the field.
Fixed-price contract type provides some cost certainty once awarded.
Contract supports the operational needs of the Department of the Army.

Sector Analysis

The contract falls within the defense electronics manufacturing sector, specifically focusing on navigation and guidance systems. This sector is characterized by high technological barriers to entry, stringent quality requirements, and significant government procurement. The market size for such specialized components is often niche, driven by specific defense program needs. Comparable spending benchmarks are difficult to establish due to the proprietary nature of many defense technologies and the prevalence of sole-source or limited competition awards in this area.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the awardee is BAE Systems, a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The impact on the small business ecosystem is likely minimal for this particular contract, as it was not designed to promote small business participation through set-asides.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract type, which obligates the contractor to deliver specified goods. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Army Aviation Systems
Navigation and Guidance Systems Manufacturing
Electronic Component Procurement
Defense Industrial Base

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. CV-3338B/ASN-128D SIGNAL DATA CONVERTER

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION 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 $21.5 million.

What is the period of performance?

Start: 2010-03-24. End: 2012-02-28.

What is the specific technical function of the CV-3338B/ASN-128D SIGNAL DATA CONVERTER?

The CV-3338B/ASN-128D SIGNAL DATA CONVERTER is a critical component within military aircraft and systems, responsible for processing and converting raw signal data into a usable format for navigation, detection, and guidance systems. Its primary function is to interface with various sensors and data sources, ensuring that the information is accurately interpreted and transmitted to the aircraft's central computer or display units. This allows pilots and automated systems to maintain situational awareness, navigate effectively, and execute missions with precision. The 'ASN-128D' designation likely refers to a specific variant or upgrade of the converter, indicating its role in advanced avionics.

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is capable of providing the required goods or services. For specialized defense components like the CV-3338B/ASN-128D SIGNAL DATA CONVERTER, this could be due to proprietary technology, unique manufacturing capabilities, or extensive integration with existing platforms that only a specific contractor possesses. The Department of the Army would have had to provide a justification for other than full and open competition, likely citing reasons such as the unavailability of alternatives or the need to maintain compatibility with existing systems. This justification is a standard part of the Federal Acquisition Regulation (FAR) process for sole-source procurements.

What are the risks associated with a sole-source contract for critical defense components?

Sole-source contracts carry several inherent risks for the government. Firstly, the lack of competition can lead to higher prices than might be achieved in a competitive bidding environment, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, it can create a dependency on a single supplier, making the government vulnerable to supply chain disruptions, price increases, or the contractor's business decisions. Thirdly, without competitive benchmarking, it can be more challenging to assess whether the awarded price represents fair market value. Finally, sole-source awards can sometimes stifle innovation by limiting opportunities for other companies to enter the market or develop alternative solutions.

How does the fixed-price contract type mitigate risk in this sole-source award?

The Firm Fixed Price (FFP) contract type aims to mitigate cost uncertainty for the government. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This means BAE Systems assumes the risk of cost overruns. While this protects the government from unexpected increases in manufacturing costs, it does not address the potential for an inflated initial price due to the absence of competition. Therefore, while the FFP structure provides cost certainty, the overall value proposition is still influenced by the sole-source nature of the procurement.

What is the historical spending pattern for similar signal data converters by the Department of the Army?

Analyzing historical spending patterns for highly specialized components like the CV-3338B/ASN-128D SIGNAL DATA CONVERTER is complex, especially when awards are sole-source. Publicly available data often aggregates spending by broader categories (e.g., 'Navigation, Guidance, and Control Systems') rather than specific part numbers. However, the Department of the Army frequently procures such systems to maintain and upgrade its fleet of aircraft and ground vehicles. Past sole-source awards for similar proprietary or highly integrated electronic systems suggest a pattern of reliance on incumbent contractors due to technical requirements and long-standing relationships. Without access to detailed procurement histories for this specific part or its predecessors, it's difficult to establish a precise spending trend, but the $21.5 million award is consistent with the high cost of specialized defense electronics.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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 (UEI: 217304393)

Address: 164 TOTOWA RD, WAYNE, NJ, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $21,526,150

Exercised Options: $21,526,150

Current Obligation: $21,526,150

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T05DA003

IDV Type: IDC

Timeline