Department of Defense awards $608M for Combat Assault & Tactical Vehicles, with BAE Systems as prime contractor

Contract Overview

Contract Amount: $608,091,469 ($608.1M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2000-12-28

End Date: 2008-12-31

Contract Duration: 2,925 days

Daily Burn Rate: $207.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200103!000744!2100!AE07 !TACOM - WARREN !DAAE0701CM011 !A!N!*!N! !20001228!20011130!085302958!824825459!175406842!N!UNITED DEFENSE, L P !2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95052!69084!085!06!SANTA CLARA !SANTA CLARA !CALIFORNIA!+000017524074!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !332912!*!*!3! ! ! !*!*!*!B!*!*!A! !D !N!U!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95119

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $608.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200103!000744!2100!AE07 !TACOM - WARREN !DAAE0701CM011 !A!N!*!N! !20001228!20011130!085302958!824825459!175406842!N!UNITED DEFENSE, L P !2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95052!69084!085!06!SANTA CLARA !SANTA CLARA !CALIFORNIA!+000017524074!N!N!000000000000!2350!COMBAT ASSAUL… Key points: 1. Contract awarded for Combat Assault & Tactical Vehicles, indicating a significant investment in military ground vehicle capabilities. 2. The contract's duration of over 8 years suggests a long-term need for these specialized vehicles and associated support. 3. The prime contractor, BAE Systems, is a major defense manufacturer, implying established relationships and capabilities within the sector. 4. The 'NOT COMPETED' status raises questions about potential cost efficiencies and the exploration of alternative solutions. 5. The specific product code '332912' points to a niche but critical component within the defense supply chain. 6. The contract's value suggests a substantial impact on the defense industrial base and related supply chains.

Value Assessment

Rating: fair

The total award amount of $608,091,468.98 for Combat Assault & Tactical Vehicles is substantial. Without specific details on the units or services procured, a direct value-for-money assessment is challenging. However, the 'NOT COMPETED' nature of the award warrants scrutiny regarding whether the government secured the best possible pricing. Benchmarking against similar sole-source or limited-competition contracts for specialized military vehicles would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source is available or when urgent and compelling circumstances prevent competition. The lack of competition limits the government's ability to leverage market forces to drive down prices and explore a wider range of innovative solutions from various vendors.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government may not benefit from competitive bidding. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiaries are the U.S. Army, receiving critical Combat Assault & Tactical Vehicles. Services delivered include the provision of tracked combat assault and tactical vehicles, likely encompassing manufacturing, assembly, and potentially initial support. The geographic impact is primarily within the United States, with BAE Systems' operations in Santa Clara, California, and potentially other manufacturing facilities. Workforce implications include employment opportunities at BAE Systems and its subcontractors within the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for taxpayers.
Sole-source awards can limit innovation by excluding potential new entrants or alternative technologies.
Dependence on a single contractor for critical defense assets poses a potential supply chain risk.

Positive Signals

Award to a known, established defense contractor like BAE Systems suggests a high likelihood of meeting technical specifications and delivery timelines.
The significant contract value indicates a substantial commitment to modernizing or expanding the Army's tactical vehicle fleet.
Long contract duration implies a stable, long-term relationship that can foster specialized expertise and efficiency.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on armored vehicle manufacturing. The market for such specialized equipment is typically dominated by a few large, established defense contractors due to high barriers to entry, including significant R&D costs, specialized manufacturing capabilities, and stringent security requirements. Comparable spending benchmarks would involve looking at other major vehicle procurement programs within the Department of Defense.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large sole-source award to BAE Systems, there is a potential for subcontracting opportunities for small businesses within BAE's supply chain. However, the lack of a specific small business set-aside means direct opportunities for small businesses to compete for the prime contract are non-existent.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense's contracting and auditing agencies. Accountability measures would include contract performance reviews, milestone tracking, and financial audits. Transparency is limited due to the sole-source nature of the award, but contract modifications and performance reports are typically available through federal procurement databases. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Combat Vehicles
Tactical Wheeled Vehicles
Armored Personnel Carriers
Military Ground Support Equipment
Defense Procurement

Risk Flags

Sole-source award lacks competitive pricing pressure.
Long contract duration may not reflect evolving technological needs.
Potential for cost overruns in Cost Plus Fixed Fee contracts if not closely monitored.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $608.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200103!000744!2100!AE07 !TACOM - WARREN !DAAE0701CM011 !A!N!*!N! !20001228!20011130!085302958!824825459!175406842!N!UNITED DEFENSE, L P !2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95052!69084!085!06!SANTA CLARA !SANTA CLARA !CALIFORNIA!+000017524074!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !332912!*!*!3! ! ! !*!*!*!B!*!*!A! !D !N!U!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! ! ! !0001!

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 $608.1 million.

What is the period of performance?

Start: 2000-12-28. End: 2008-12-31.

What is the specific type of Combat Assault & Tactical Vehicle being procured under this contract, and what are its key capabilities?

The contract data specifies the Product Service Code (PSC) as '332912', which corresponds to 'Fluid Power Valve and Hose Fitting Manufacturing'. However, the description also mentions 'COMBAT ASSAULT & TACTICAL VEH, TRACKED' and 'AIRFRAMES AND SPARES' with a specific mention of 'BLACKHAWK (UH-60) UTTAS'. This suggests the contract may encompass a range of components or systems related to tracked combat vehicles, potentially including specialized hydraulic systems (valves and fittings) and possibly airframe components or spares for helicopters like the UH-60 Black Hawk, although the primary description leans towards tracked vehicles. Further clarification from the contracting agency would be needed to pinpoint the exact nature and capabilities of the vehicles or systems procured.

Why was this contract awarded on a sole-source basis, and what alternatives were considered?

The provided data explicitly states the contract type as 'NOT COMPETED', indicating a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data snippet. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source, urgent and compelling needs, or when the contract is a follow-on to a previously competed contract where only the original contractor can provide the necessary services or supplies. Without further documentation from the Department of Defense, the precise reasons and any alternatives considered remain unknown.

How does the total contract value of approximately $608 million compare to historical spending on similar combat vehicle procurements?

A total contract value of approximately $608 million for combat assault and tactical vehicles is a significant sum, reflecting a substantial investment. To benchmark this against historical spending, one would need to analyze past procurements of similar tracked combat vehicles by the Department of the Army or other branches. Factors such as the number of units, technological sophistication, and contract duration heavily influence total value. For instance, major platform procurements like Abrams tanks or Bradley Fighting Vehicles involve multi-billion dollar programs over many years. This $608 million award, spanning nearly 9 years, suggests a steady, long-term acquisition or sustainment effort for a specific type of tracked vehicle or its components, rather than a large-scale, rapid fielding initiative.

What is BAE Systems' track record with the Department of Defense, particularly in producing combat assault and tactical vehicles?

BAE Systems is a major global defense contractor with a long and extensive track record of supplying a wide array of military equipment to the Department of Defense, including numerous types of combat vehicles. They are known for producing platforms such as the M109 Paladin self-propelled howitzer, the Bradley Fighting Vehicle, and the Amphibious Combat Vehicle (ACV). Their involvement in tracked vehicle programs is substantial. Given their established presence and portfolio in this specific defense sub-sector, awarding them a contract for combat assault and tactical vehicles aligns with their core competencies and historical performance within the DoD.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

Sole-source contracts of this magnitude ($608 million) and duration (nearly 9 years) carry several inherent risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, potentially resulting in less value for taxpayer money. Secondly, it can stifle innovation, as the government is reliant on a single contractor's capabilities and may not be exposed to new technologies or more efficient solutions from other potential suppliers. Thirdly, there's an increased risk of contractor lock-in, making it difficult and costly to switch providers if performance issues arise or if market conditions change. Finally, a sole-source award can reduce transparency in the procurement process, making it harder for external observers to assess the fairness and efficiency of the award.

Are there any specific performance metrics or oversight mechanisms mentioned for this contract to ensure successful delivery?

The provided data snippet does not include specific details regarding performance metrics or detailed oversight mechanisms for this contract. However, standard federal contracting practices dictate that contracts, especially those of this size and duration, are subject to oversight. This typically involves contract administration by the procuring agency (Department of the Army in this case), performance reviews, milestone tracking, and financial audits. The contract type, 'COST PLUS FIXED FEE' (pt: 'COST PLUS FIXED FEE'), suggests that the contractor is reimbursed for allowable costs plus a negotiated fixed fee representing profit. This structure requires robust cost monitoring and auditing by the government to ensure costs are reasonable and allowable.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Fluid Power Valve and Hose Fitting Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: BAE Systems PLC

Address: 2830 DE LA CRUZ BLVD, SANTA CLARA, CA, 95052

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline