Department of Defense awards $21.2M contract for Black Hawk helicopter upgrades, with BAE Systems as prime contractor

Contract Overview

Contract Amount: $21,282,938 ($21.3M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2000-09-29

End Date: 2030-12-25

Contract Duration: 11,044 days

Daily Burn Rate: $1.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200012!2100!003205!AE07 !TACOM - WARREN !DAAE0700CL054 !A!*!* !20000929!20011231!085302958!824825459!175406842!N!80212!UNITED DEFENSE INDUSTRIES, INC!2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95050!69084!085!06!SANTA CLARA !SANTA CLARA !CALIFORNIA!0001!+000002668000!N!N!000000000000!AC43!RDTE/TANK - AUTOMOTIVE-ADV TECH DEV !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !3728!3!*!*!*!B!B!*!D !N!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $21.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200012!2100!003205!AE07 !TACOM - WARREN !DAAE0700CL054 !A!*!* !20000929!20011231!085302958!824825459!175406842!N!80212!UNITED DEFENSE INDUSTRIES, INC!2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95050!69084!085!06!SANTA CLARA !SAN… Key points: 1. Contract awarded to a single source, raising questions about competition and potential cost savings. 2. Significant portion of contract value allocated to research, development, testing, and evaluation (RDT&E). 3. Long contract duration of over 10 years suggests a sustained need for these helicopter upgrades. 4. Prime contractor has a substantial presence in the defense sector, indicating experience with similar projects. 5. Geographic location of the contractor in California may have implications for regional economic impact. 6. Contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not closely monitored.

Value Assessment

Rating: fair

The contract value of $21.2 million for Black Hawk helicopter upgrades appears moderate within the defense sector. However, without specific benchmarks for this particular type of upgrade or comparison to similar sole-source awards, a definitive value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation, necessitating robust oversight to ensure fair pricing and prevent contractor overspending. Further analysis of the contractor's historical performance on similar CPFF contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed contract. It is crucial to understand the justification for this sole-source award to ensure it was indeed necessary and that alternatives were not overlooked.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, the government has less leverage to negotiate the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Army, which operates the Black Hawk fleet, receiving enhanced helicopter capabilities. Services delivered include research, development, testing, and evaluation for advanced technologies related to the UH-60 Black Hawk helicopter. The geographic impact is primarily centered around the contractor's location in Santa Clara, California, potentially creating or sustaining local jobs. Workforce implications include specialized engineering and technical roles required for advanced aerospace development and modification.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not managed diligently.
Long contract duration requires sustained oversight to ensure continued value and performance.
Lack of detailed performance metrics in the provided data makes it difficult to assess effectiveness.
Specific nature of 'advanced technology development' is vague, requiring further clarification on deliverables.

Positive Signals

Contract awarded to a known entity (BAE Systems) with presumed experience in defense contracting.
Focus on RDT&E suggests investment in future capabilities for critical military assets.
Contract duration indicates a long-term commitment to maintaining and improving essential helicopter platforms.
The contract is for a specific, critical platform (Black Hawk UH-60), addressing a clear military need.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on aircraft modification and technology development. The market for military helicopter upgrades is specialized, often dominated by a few large prime contractors with established relationships and expertise. Spending in this area is driven by military modernization efforts and the need to maintain the effectiveness of aging fleets. Comparable spending benchmarks would typically involve other major aircraft upgrade programs, which can range from tens to hundreds of millions of dollars depending on the scope and complexity.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. The prime contractor, BAE Systems, is a large defense corporation. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contractors often engage small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense's contracting and program management offices. Given the RDT&E nature and CPFF structure, rigorous oversight of expenditures, progress reports, and adherence to technical specifications is crucial. Transparency may be limited due to the sole-source nature and the classified or sensitive aspects of defense technology development. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Black Hawk Helicopter Program
Army Aviation Modernization
Defense Research and Development Programs
Aerospace Technology Development Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration
Lack of detailed performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200012!2100!003205!AE07 !TACOM - WARREN !DAAE0700CL054 !A!*!* !20000929!20011231!085302958!824825459!175406842!N!80212!UNITED DEFENSE INDUSTRIES, INC!2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95050!69084!085!06!SANTA CLARA !SANTA CLARA !CALIFORNIA!0001!+000002668000!N!N!000000000000!AC43!RDTE/TANK - AUTOMOTIVE-ADV TECH DEV !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !3728!3!*!*!*!B!B!*!D !N!U!

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 Army).

What is the total obligated amount?

The obligated amount is $21.3 million.

What is the period of performance?

Start: 2000-09-29. End: 2030-12-25.

What is the specific justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically stems from a determination that only one responsible source is available or capable of meeting the agency's needs. For defense contracts, this can be due to unique technological capabilities, proprietary data, or the need for compatibility with existing systems where only one contractor can provide the necessary integration. Without the specific Justification for Other Than Full and Open Competition (JOFOC) document, it's impossible to know the precise reasons. However, common justifications include the urgency of the requirement, the existence of a critical technology only possessed by one firm, or the need for follow-on work where only the original contractor can provide the necessary expertise and parts. This lack of competition means the government must rely heavily on its negotiation and oversight capabilities to ensure fair pricing and value.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for RDT&E, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts are common for Research, Development, Test, and Evaluation (RDT&E) efforts where the scope of work is not fully defined at the outset, making it difficult to establish a firm fixed price. In a CPFF contract, the contractor is reimbursed for all allowable costs plus a fixed fee representing their profit. The primary risk for the government is cost overrun; since the contractor's profit is fixed, they have less incentive to control costs compared to fixed-price contracts. If costs increase, the contractor's profit margin (as a percentage of total cost) decreases, but their absolute profit remains the same. This can lead to contractors being less diligent in managing expenses. Conversely, the contractor has an incentive to complete the work efficiently to maximize their profit margin. Robust government oversight, detailed cost tracking, and clear performance metrics are essential to mitigate these risks.

What is the historical spending trend for Black Hawk helicopter upgrades or similar RDT&E contracts within the Department of the Army?

Historical spending on Black Hawk helicopter upgrades and related RDT&E within the Department of the Army has been substantial and ongoing, reflecting the platform's critical role and extended service life. While specific figures for 'upgrades' can vary widely based on the scope (e.g., avionics modernization, structural enhancements, new weapon systems integration), the Army consistently allocates significant funds to maintain and improve its aviation assets. RDT&E spending for major platforms like the Black Hawk often occurs in multi-year cycles, involving initial concept development, prototyping, testing, and eventual integration. Analyzing past budgets reveals consistent investment in aviation modernization, with specific upgrade programs sometimes reaching hundreds of millions or even billions of dollars over their lifecycle. This particular $21.2 million award represents a segment of that broader, continuous investment in the UH-60 fleet's technological advancement.

What are the potential performance implications of BAE Systems being the prime contractor for this specific upgrade?

BAE Systems is a major global defense contractor with extensive experience in aerospace, including the development and sustainment of military aircraft. For this specific contract, their role as prime contractor suggests they possess the necessary technical expertise, program management capabilities, and potentially proprietary knowledge related to the Black Hawk platform or its subsystems. Their track record on similar complex defense programs indicates a capacity to handle RDT&E efforts. However, the success of this particular upgrade will depend on their specific team's expertise in the required technologies, their ability to manage subcontractors effectively (if any), and their adherence to the contract's technical requirements and schedule. Given their size and scope, they likely have established processes for managing such contracts, but rigorous oversight remains essential.

How does the geographic location of the contractor (Santa Clara, CA) potentially influence the contract's execution or economic impact?

The contractor's location in Santa Clara, California, places it within a region known for its technological innovation and a skilled workforce, particularly in aerospace and advanced manufacturing. This could facilitate access to specialized talent and potentially foster collaboration with local technology firms or research institutions, which might be beneficial for the RDT&E aspects of the contract. Economically, the contract spending could stimulate the local economy through job creation, supplier contracts, and increased business activity in the Santa Clara area. However, California's higher cost of living and operating expenses might also contribute to the overall cost of the contract compared to contractors located in regions with lower overheads. Proximity to military bases or other relevant government facilities is not immediately apparent from the location alone.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 2830 DE LA CRUZ BLVD, SANTA CLARA, CA, 17

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline