DoD awards $31.5M F-16 support equipment contract to BAE Systems for Iraq, with no competition

Contract Overview

Contract Amount: $31,520,923 ($31.5M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2012-11-13

End Date: 2016-03-31

Contract Duration: 1,234 days

Daily Burn Rate: $25.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UNDEFINITIZED CONTRACTUAL ACTION FOR F-16 SUPPORT EQUIPMENT FOR IRAQ.

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $31.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: UNDEFINITIZED CONTRACTUAL ACTION FOR F-16 SUPPORT EQUIPMENT FOR IRAQ. Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. The contract's duration of over three years suggests a significant need for ongoing support. 3. Lack of competition limits opportunities for other vendors and potentially higher quality or lower cost solutions. 4. The undefinitized contractual action (UCA) status at award indicates initial uncertainty regarding scope or cost. 5. Focus on support equipment for F-16s highlights critical sustainment needs for foreign military sales. 6. The contract value, while substantial, needs to be benchmarked against similar support equipment procurements.

Value Assessment

Rating: questionable

The contract was awarded as an undefinitized contractual action (UCA), which typically involves higher risk and potential for cost growth compared to fully defined contracts. Without details on the definitization process or comparison to similar support equipment contracts, it is difficult to definitively assess value for money. The sole-source nature also prevents benchmarking against competitive bids, suggesting potential for inflated pricing.

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 significantly limits the government's ability to leverage market forces to achieve the best possible price and terms. The justification for sole-source procurement is not provided, but it typically implies that only one responsible source could fulfill the requirement.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor faced no direct rivals for this specific award.

Public Impact

The primary beneficiaries are the Iraqi Air Force, which will receive essential support equipment for its F-16 fighter jets. This contract ensures the operational readiness and sustainment of F-16 aircraft operated by a key U.S. partner. The services delivered include the provision of support equipment, crucial for maintenance, repair, and deployment of the aircraft. The geographic impact is focused on Iraq, supporting U.S. foreign policy objectives and security cooperation in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value discovery.
Undefinitized contractual action (UCA) at award suggests initial scope or cost uncertainties.
Lack of transparency regarding the justification for sole-source procurement.
Potential for cost overruns due to lack of competition and UCA status.

Positive Signals

Addresses critical sustainment needs for F-16 aircraft, ensuring operational readiness.
Supports a key U.S. foreign military sales partner (Iraq).
Contract awarded to a known entity (BAE Systems) with experience in defense electronics.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing. The market for defense support equipment is often characterized by specialized needs and long-term sustainment requirements. Spending in this area is driven by military modernization programs, foreign military sales, and the ongoing need to maintain existing fleets of aircraft. Comparable spending benchmarks would involve analyzing other contracts for F-16 support equipment or similar sustainment services for other aircraft platforms.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the award was made to a large business (BAE Systems) on a sole-source basis. There is no indication of small business set-asides or subcontracting plans being a significant factor in this specific award. This procurement does not appear to directly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, which awarded the contract on behalf of the Department of Defense. As an undefinitized contractual action (UCA), there would be specific procedures for its definitization to ensure fair and reasonable pricing. Transparency regarding the sole-source justification and the definitization process would be key accountability measures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

F-16 Sustainment Programs
Foreign Military Sales (FMS) Equipment Procurement
Aerospace Support Services
Defense Logistics Agency (DLA) Contracts
Air Force Sustainment Center Contracts

Risk Flags

Sole-source award
Undefinitized Contractual Action (UCA)
Lack of Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. UNDEFINITIZED CONTRACTUAL ACTION FOR F-16 SUPPORT EQUIPMENT FOR IRAQ.

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 $31.5 million.

What is the period of performance?

Start: 2012-11-13. End: 2016-03-31.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified when only one responsible source is available or capable of meeting the requirement, or in cases of urgent need where competition is not feasible. For defense articles and services, justifications often relate to unique capabilities, proprietary technology, or specific interoperability requirements. Without the official justification document, it is impossible to determine the precise rationale behind awarding this contract to BAE Systems without competition.

How does the undefinitized contractual action (UCA) status at award impact the overall cost and risk?

An undefinitized contractual action (UCA) is a contract where the terms, conditions, and price are not fully negotiated and agreed upon at the time of award. This status inherently carries higher risk for the government, as the final price is not fixed. Contractors may include contingency pricing to cover uncertainties, potentially leading to higher initial costs. The government's objective is to definitize the UCA as quickly as possible, converting it into a definitive contract with a negotiated price. The duration of the UCA period and the final negotiated price are critical factors in assessing the true cost and risk associated with this type of award.

What is the typical cost range for F-16 support equipment, and how does this contract compare?

Benchmarking the cost of F-16 support equipment is challenging without specific details on the type of equipment procured under this $31.5 million contract. Support equipment can range from basic tools and diagnostic equipment to complex testing stations and specialized handling gear. The value of such contracts can vary significantly based on the specific items, quantities, and the level of technological sophistication. Generally, sustainment contracts for major weapon systems like the F-16 can run into tens or hundreds of millions of dollars over their lifecycle. A direct comparison would require identifying similar contracts for F-16 support equipment, noting the specific items, quantities, and the period of performance, which is not readily available from the provided data.

What is BAE Systems' track record with similar F-16 support equipment contracts?

BAE Systems is a major defense contractor with extensive experience in providing electronic systems, support, and sustainment for various military platforms, including the F-16. While specific details on their past performance solely on F-16 support equipment contracts are not provided here, the company has a broad portfolio in areas such as avionics, radar, and electronic warfare systems, which often integrate with or require specialized support equipment. Their history suggests a capability to deliver complex defense solutions. However, a thorough assessment would involve reviewing their past performance ratings, contract history, and any reported issues on similar procurements.

What are the potential long-term implications of this contract for the sustainment of Iraqi F-16s?

This contract is crucial for the long-term sustainment of the Iraqi Air Force's F-16 fleet. By providing essential support equipment, it directly contributes to the operational readiness and maintainability of these aircraft. This ensures that Iraq can effectively operate and maintain its F-16s, which is vital for its national security and regional stability. The availability of proper support equipment reduces downtime, facilitates efficient maintenance, and can extend the service life of the aircraft. This contract, therefore, plays a significant role in the ongoing U.S. commitment to supporting Iraq's defense capabilities through foreign military sales.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

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, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $49,252,717

Exercised Options: $49,252,717

Current Obligation: $31,520,923

Subaward Activity

Number of Subawards: 117

Total Subaward Amount: $17,864,295

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline