DoD's $134M contract for navigation systems awarded to BAE Systems, spanning over a decade

Contract Overview

Contract Amount: $134,395,944 ($134.4M)

Contractor: BAE Systems Technical Services

Awarding Agency: Department of Defense

Start Date: 2001-12-06

End Date: 2013-09-30

Contract Duration: 4,316 days

Daily Burn Rate: $31.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Defense

Place of Performance

Location: FORT WALTON BEACH, OKALOOSA County, FLORIDA, 32548

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $134.4 million to BAE SYSTEMS TECHNICAL SERVICES for work described as: Key points: 1. The contract's long duration and significant value suggest a critical, ongoing need for these specialized systems. 2. BAE Systems' established presence in defense contracting indicates a potentially stable but less competitive market. 3. The award was made under full and open competition, implying a broad search for qualified vendors. 4. Performance context is crucial given the system's role in navigation, detection, and guidance. 5. This spending falls within the broader category of aerospace and defense manufacturing. 6. The contract's value, while substantial, needs to be benchmarked against similar system procurements for true value assessment.

Value Assessment

Rating: fair

Benchmarking the value of this $134 million contract is challenging without specific details on the systems procured and their complexity. However, given its duration of over 12 years (from award to completion), the average annual spending was approximately $11 million. This figure needs comparison against similar navigation and guidance system contracts awarded by the Department of Defense or other agencies to determine if it represents a competitive price point. The lack of detailed performance metrics or unit costs makes a definitive value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that multiple vendors had the opportunity to bid. The number of bidders is not specified, but this approach generally fosters price discovery and encourages competitive pricing. The fact that it was competed broadly is a positive sign for achieving a fair market price, though the specific outcome in terms of bid numbers and price spread is unknown.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for essential defense systems. Full and open competition increases the likelihood that the government is not overpaying due to a lack of market alternatives.

Public Impact

The primary beneficiaries are the Department of Defense and its air and naval operations, which rely on accurate navigation and guidance systems. The services delivered include the manufacturing and potentially maintenance of critical navigation, detection, and guidance systems for aircraft and potentially other platforms. The geographic impact is likely national, supporting military readiness across various operational theaters. Workforce implications include employment at BAE Systems and its subcontractors, particularly in specialized engineering, manufacturing, and technical support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential cost overruns if not managed tightly.
Lack of specific performance metrics makes it hard to assess if the systems met all operational requirements effectively.
Reliance on a single contractor for an extended period might limit future innovation or flexibility.

Positive Signals

Awarded through full and open competition, indicating a robust initial selection process.
BAE Systems is a major defense contractor with a track record, suggesting technical capability.
The contract addresses a fundamental need for navigation and guidance systems, crucial for military operations.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on electronic and navigational instruments. The industry is characterized by high R&D investment, stringent quality requirements, and significant government procurement. Comparable spending benchmarks would involve analyzing other contracts for similar avionics, guidance, and control systems, which can range from tens to hundreds of millions of dollars depending on scale and technological sophistication.

Small Business Impact

The data indicates that small business participation (sb) was false, and there was no specific small business set-aside (ss). This suggests that the primary award was not targeted towards small businesses. Subcontracting opportunities for small businesses may exist within BAE Systems' supply chain, but this is not explicitly detailed in the provided data. The overall impact on the small business ecosystem for this specific contract appears minimal based on the available information.

Oversight & Accountability

Oversight for this Department of Defense contract would typically involve program management offices within the Air Force, contract administration offices, and potentially the Defense Contract Management Agency (DCMA). Accountability measures would be tied to contract terms, delivery schedules, and performance specifications. Transparency is generally facilitated through contract databases like FPDS, though detailed operational performance data may be classified or proprietary. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Defense Advanced GPS Receivers
Avionics Systems Procurement
Military Navigation Technology
Aerospace Electronic Systems Manufacturing
DoD Command and Control Systems

Risk Flags

Long contract duration may increase risk of cost escalation or obsolescence.
Lack of detailed performance metrics hinders assessment of effectiveness.
Limited information on competition specifics beyond 'full and open'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $134.4 million to BAE SYSTEMS TECHNICAL SERVICES. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNICAL SERVICES.

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 $134.4 million.

What is the period of performance?

Start: 2001-12-06. End: 2013-09-30.

What is the specific type of navigation system procured under this contract, and what are its key functionalities?

The contract data indicates the North American Industry Classification System (NAICS) code 334511, which pertains to 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' This suggests the contract covers the production or supply of sophisticated electronic systems used for determining position, course, or distance traveled, particularly for aircraft and potentially naval vessels. Key functionalities would likely include GPS integration, inertial navigation, radar-based positioning, and flight control system interfaces. Without more specific contract line item details, the exact nature of the systems (e.g., specific aircraft models, upgrade packages, or new development) remains unspecified, but their role is critical for mission success and safety.

How does the $134 million total award compare to other similar navigation system contracts awarded by the DoD in the same period?

Comparing this $134 million contract, awarded over approximately 12 years (Dec 2001 - Sep 2013), requires looking at similar procurements within the aerospace and defense navigation sector. Contracts for advanced avionics and navigation systems can vary widely in cost based on technological complexity, quantity, and platform integration. For instance, major upgrades to existing aircraft navigation suites or the development of new systems for next-generation platforms could easily reach or exceed this figure. However, smaller component procurements or less complex systems might cost significantly less. A precise comparison would necessitate identifying contracts with identical or highly similar NAICS codes and service scopes awarded within a comparable timeframe to establish a robust benchmark for value.

What were the primary risks associated with this contract, and how were they managed?

Key risks for a contract of this nature and duration include technological obsolescence, performance shortfalls, cost overruns, and schedule delays. Given the critical role of navigation systems, failure to meet stringent performance requirements could have severe operational consequences. Technological risks are inherent in defense systems, where advancements can outpace deployed technology. Cost overruns are a common concern in long-term manufacturing contracts, especially if material costs fluctuate or unforeseen technical challenges arise. Risk management would typically involve detailed technical specifications, phased delivery schedules with performance checkpoints, robust quality assurance processes, and potentially contract clauses for cost control and schedule adherence. The specific risk mitigation strategies employed by the DoD and BAE Systems are not detailed in the provided summary data.

What is BAE Systems' track record with similar DoD contracts, particularly in navigation and guidance systems?

BAE Systems is a major global defense contractor with extensive experience in developing and supplying a wide array of defense systems, including avionics, electronic warfare, and command and control systems. Their track record with the Department of Defense is substantial, encompassing numerous large-scale contracts across various military branches. For navigation and guidance systems specifically, BAE Systems has a history of providing components and integrated solutions for aircraft, naval vessels, and ground vehicles. While this specific $134 million contract represents a significant award, it aligns with the company's core competencies and established market position within the defense sector. Assessing their overall performance would require reviewing past contract performance ratings and delivery histories for similar programs.

How has spending on navigation, detection, guidance, and nautical systems evolved within the DoD over the past two decades?

Spending on navigation, detection, guidance, and nautical systems within the DoD has likely seen a significant evolution over the past two decades, driven by technological advancements and changing operational requirements. Early in this period (around 2001-2013), spending would have focused on integrating GPS, inertial navigation systems (INS), and improving sensor fusion for enhanced accuracy and reliability. As technology progressed, there would have been a shift towards more resilient systems capable of operating in GPS-denied environments, incorporating multi-sensor fusion, and leveraging artificial intelligence for improved situational awareness. More recent spending trends likely emphasize networked capabilities, cybersecurity for navigation systems, and potentially directed energy or advanced sensor technologies. Overall, while specific dollar figures fluctuate based on program cycles and budget priorities, the trend has been towards more sophisticated, integrated, and secure navigation solutions.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COMBINATION (TWO OR MORE) (2)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 557 MARY ESTHER CUT-OFF, FORT WALTON BE, FL

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

Financial Breakdown

Contract Ceiling: $166,471,334

Exercised Options: $159,037,942

Current Obligation: $134,395,944

Contract Characteristics

Cost or Pricing Data: NO

Timeline