DoD's $28.4M AN/ALR 56M System Ship Set contract awarded to BAE Systems, lacking competition

Contract Overview

Contract Amount: $28,433,171 ($28.4M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2007-11-08

End Date: 2014-08-31

Contract Duration: 2,488 days

Daily Burn Rate: $11.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/ALR 56M SYSTEM SHIP SET

Place of Performance

Location: TOTOWA, PASSAIC County, NEW JERSEY, 07512

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $28.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: AN/ALR 56M SYSTEM SHIP SET Key points: 1. The contract's value of $28.4 million over its period of performance suggests a significant investment in specialized defense systems. 2. Awarded on a sole-source basis, the lack of competition raises questions about potential price inflation and limited market exploration. 3. The firm-fixed-price contract type shifts risk to the contractor, which can be beneficial for the government if managed effectively. 4. The contract's duration of approximately 2488 days (over 6 years) indicates a long-term need for these systems. 5. The absence of small business set-asides suggests this contract was not specifically targeted to support small business participation. 6. The primary sector for this contract is Defense, specifically focusing on electronic warfare and radar warning systems.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable sole-source awards for the AN/ALR 56M system. However, the total value of $28.4 million spread over more than six years suggests a moderate annual expenditure. The firm-fixed-price nature of the contract is generally favorable for cost control, but the lack of competition prevents a direct assessment of whether the pricing is competitive against market alternatives. Further analysis would require access to the contractor's cost data or historical pricing for similar 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 among multiple vendors. This typically occurs when a specific product or service is only available from a single source, or when there are compelling reasons to bypass competition, such as urgent needs or unique capabilities. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing the award, the Department of Defense could not be assured of obtaining the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel who will operate and maintain the AN/ALR 56M systems. The contract delivers critical electronic warfare capabilities, specifically radar warning receivers, essential for aircraft survivability. The geographic impact is likely concentrated within Air Force bases and operational theaters where these aircraft are deployed. The contract supports specialized technical roles within BAE Systems, contributing to the defense industrial workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce transparency and accountability in pricing.
Dependence on a single contractor for critical systems poses a long-term risk.
Limited visibility into the contractor's cost structure due to sole-source nature.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
BAE Systems is a major defense contractor with established expertise in electronic warfare systems.
The AN/ALR 56M is a proven system, indicating a degree of reliability and performance.

Sector Analysis

The AN/ALR 56M system falls within the broader defense electronics sector, specifically focusing on radar warning receivers and electronic countermeasures. This market is characterized by high barriers to entry due to specialized technology, stringent security requirements, and long development cycles. Major defense contractors like BAE Systems dominate this space. Spending in this sub-sector is driven by the need for advanced situational awareness and protection for military platforms, with significant government investment allocated annually.

Small Business Impact

This contract does not appear to have been set aside for small businesses, nor is there information indicating significant subcontracting opportunities for small businesses. The award to a large prime contractor like BAE Systems suggests that the focus was on acquiring specialized capabilities rather than promoting small business participation through this specific procurement vehicle.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which incentivizes the contractor to meet specifications within budget. Transparency is limited due to the sole-source nature of the award. Inspector General investigations could be initiated if any fraud, waste, or abuse were suspected.

Related Government Programs

AN/ALR 56M Radar Warning Receiver
Electronic Warfare Systems
Defense Aircraft Survivability Equipment
BAE Systems Defense Contracts
Air Force Avionics Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure
Contractor dependency risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. AN/ALR 56M SYSTEM SHIP SET

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 Air Force).

What is the total obligated amount?

The obligated amount is $28.4 million.

What is the period of performance?

Start: 2007-11-08. End: 2014-08-31.

What is the specific capability and operational role of the AN/ALR 56M System Ship Set?

The AN/ALR 56M is a component of the AN/ALR-56 advanced radar warning receiver (RWR) system, designed to detect and identify radar signals from threats such as surface-to-air missiles (SAMs) and enemy aircraft. The 'System Ship Set' designation implies a configuration tailored for installation on naval vessels or potentially as a comprehensive package for a specific aircraft platform. Its primary role is to provide aircrews or ship crews with critical early warning of radar-guided threats, enabling evasive maneuvers or countermeasures to enhance survivability in hostile environments. This system is a key element of electronic warfare suites, contributing to battlespace awareness and force protection.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For the AN/ALR 56M System Ship Set, this could be due to several factors. BAE Systems may hold the intellectual property rights or unique manufacturing capabilities for this specific system, making it the only viable provider. Alternatively, there might have been urgent requirements or a need for commonality with existing systems already in operation, where switching contractors would be prohibitively expensive or technically complex. Without specific documentation from the awarding agency (Department of the Air Force), the precise justification remains speculative but likely centers on proprietary technology or essential system integration.

How does the firm-fixed-price contract type impact cost control and risk for this award?

A firm-fixed-price (FFP) contract is generally considered advantageous for the government when the scope of work is well-defined and risks can be reasonably assessed. Under an FFP agreement, the contractor (BAE Systems) is obligated to complete the work for a predetermined price, regardless of their actual costs. This shifts the financial risk of cost overruns to the contractor, incentivizing them to manage their resources efficiently. For the government, it provides cost certainty, making budgeting more predictable. However, if the contractor underestimated costs or encountered unforeseen issues, they bear the loss. Conversely, if costs are lower than anticipated, the contractor benefits from higher profit margins. The effectiveness of FFP in controlling costs is maximized when competition is present to establish a competitive baseline price.

What is the historical spending trend for the AN/ALR 56M system or similar radar warning receivers within the Department of Defense?

Historical spending data for the AN/ALR 56M system specifically, especially for 'System Ship Sets,' is not readily available in public databases without deeper analysis of contract line item numbers and specific award details. However, the AN/ALR-56 family of systems has been a staple in the U.S. Air Force's electronic warfare capabilities for decades, undergoing various upgrades. Spending on radar warning receivers and broader electronic warfare systems within the DoD is substantial and cyclical, often tied to modernization programs, platform upgrades, and evolving threat landscapes. Annual expenditures can range from tens of millions to hundreds of millions of dollars across different programs and contractors, reflecting the critical nature of these systems for air and missile defense.

What are the potential risks associated with a sole-source award for critical defense systems like the AN/ALR 56M?

Sole-source awards for critical defense systems present several risks. Firstly, the lack of competition can lead to inflated prices, as the government cannot leverage market forces to secure the best value. Secondly, it can foster complacency in the contractor, potentially reducing incentives for innovation or efficiency improvements over time. Thirdly, it creates a dependency on a single supplier, which can be problematic if the contractor faces financial difficulties, production issues, or decides to exit the market. This dependency also limits the government's flexibility in adopting newer technologies or alternative solutions. Finally, sole-source procurements can sometimes face greater scrutiny regarding fairness and justification, potentially leading to protests or investigations if not properly documented.

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: 65 SPIT BROOK RD, NASHUA, NH, 03060

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $28,433,171

Exercised Options: $28,433,171

Current Obligation: $28,433,171

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F0960303D0001

IDV Type: IDC

Timeline