BAE Systems awarded $10.3M for EW Systems, highlighting potential value concerns in a sole-source acquisition

Contract Overview

Contract Amount: $10,306,229 ($10.3M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2006-02-24

End Date: 2008-12-31

Contract Duration: 1,041 days

Daily Burn Rate: $9.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200606!000158!5700!FA8523!WR-ALC-LSK EW SYSTEMS !FA852306C0007 !A!N! !N! ! !20060224!20080331!007186526!876861790!217304393!N!BAE SYSTEMS INFORMATION AND EL!RIDGE HILL !YONKERS !NY!10710!84000!119!36!YONKERS !WESTCHESTER !NEW YORK !+000009327487!Y!N!000000000000!5865!ELCT CNTRMSRS, CNTR-CNTR-MSRS & QCK RCTN CPBLTY EQ!A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !541330!E! !3! ! ! ! ! !99990909!B! ! !N!Z!B!N!J!2!001!N!4A!A!Y!Z! ! !N!C!N! ! ! !A!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: TOTOWA, PASSAIC County, NEW JERSEY, 07512

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $10.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: 200606!000158!5700!FA8523!WR-ALC-LSK EW SYSTEMS !FA852306C0007 !A!N! !N! ! !20060224!20080331!007186526!876861790!217304393!N!BAE SYSTEMS INFORMATION AND EL!RIDGE HILL !YONKERS !NY!10710!84000!119!36!YONKERS !WEST… Key points: 1. The contract was awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. The duration of the contract (over 2.5 years) suggests a need for ongoing support or development. 3. The specific nature of the 'EW SYSTEMS' points to a specialized, potentially high-cost area within defense electronics. 4. The lack of competition limits the ability to benchmark pricing against market alternatives. 5. The contractor, BAE Systems, is a major defense contractor, indicating a significant player in this sector. 6. The contract value, while substantial, needs to be assessed against the scope and criticality of the EW systems.

Value Assessment

Rating: questionable

The contract value of $10.3 million for Electronic Warfare (EW) systems requires careful scrutiny due to the sole-source nature of the award. Without competitive bidding, it is difficult to ascertain if this price represents fair market value. Benchmarking against similar sole-source EW system contracts, if available, would be crucial. However, the lack of publicly disclosed comparable data makes a definitive value-for-money assessment challenging. The fixed-price nature of the contract offers some cost control, but the initial price point remains a key area for further investigation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, BAE Systems Information and Electronic Systems Integration Inc., was solicited. The justification for this approach is not detailed in the provided data. Sole-source awards typically occur when a unique capability is required, or when only one vendor can meet the specific needs. This lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Taxpayers may have paid a premium for these EW systems due to the absence of competitive pressure. The government did not benefit from the price reductions and innovations that often arise from a competitive bidding process.

Public Impact

The primary beneficiaries are likely military personnel who will utilize the Electronic Warfare systems for operational advantage. The services delivered involve the provision and potentially maintenance or upgrade of critical EW equipment. The geographic impact is primarily within the Department of Defense's operational theaters, wherever these systems are deployed. Workforce implications include potential employment opportunities within BAE Systems and its subcontractors for specialized engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may lead to higher costs for taxpayers.
Lack of detailed performance metrics in the provided data makes it difficult to assess effectiveness.
The specific nature of EW systems suggests a high degree of technical complexity and potential for cost overruns if not managed tightly.
The contract duration could indicate potential for scope creep or unforeseen technical challenges.
Limited public information on the specific EW capabilities being procured hinders independent assessment.

Positive Signals

BAE Systems is a reputable and experienced defense contractor with a track record in complex systems.
The contract is firm fixed-price, which generally provides cost certainty for the government.
The award is for specialized Electronic Warfare systems, indicating a focus on critical national security capabilities.
The contract is managed by the Department of the Air Force, suggesting adherence to established procurement processes.

Sector Analysis

The defense electronics sector is characterized by high research and development costs, long product lifecycles, and significant government investment. Electronic Warfare (EW) systems, a subset of this sector, are crucial for modern military operations, encompassing capabilities like jamming, deception, and electronic intelligence. The market is dominated by a few large prime contractors, including BAE Systems. Spending in this area is driven by evolving threats and the need for technological superiority. Comparable spending benchmarks are difficult to establish without detailed specifications, but contracts for advanced EW suites can range from millions to billions of dollars.

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. As a sole-source award to a large prime contractor, the direct impact on small business set-asides is minimal. However, BAE Systems may engage small businesses as subcontractors for specific components or services, but this is not detailed in the available information. The overall ecosystem impact on small businesses is likely indirect, depending on BAE's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, specifically within the Department of the Air Force. Accountability measures would include contract performance reviews, milestone tracking, and financial audits. Transparency is limited due to the sole-source nature and the classified or sensitive aspects often associated with defense systems. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Advanced Electronic Warfare Systems
Defense Electronics Procurement
Air Force Weapon Systems
BAE Systems Defense Contracts
Sole-Source Defense Acquisitions

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. 200606!000158!5700!FA8523!WR-ALC-LSK EW SYSTEMS !FA852306C0007 !A!N! !N! ! !20060224!20080331!007186526!876861790!217304393!N!BAE SYSTEMS INFORMATION AND EL!RIDGE HILL !YONKERS !NY!10710!84000!119!36!YONKERS !WESTCHESTER !NEW YORK !+000009327487!Y!N!000000000000!5865!ELCT CNTRMSRS, CNTR-CNTR-MSRS & QCK RCTN CPBLTY EQ!A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !541330!E! !3! ! ! ! ! !999

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 $10.3 million.

What is the period of performance?

Start: 2006-02-24. End: 2008-12-31.

What is the specific nature of the 'WR-ALC-LSK EW SYSTEMS' being procured, and what are their intended operational capabilities?

The 'WR-ALC-LSK EW SYSTEMS' likely refers to systems managed by the Warner Robins Air Logistics Center (WR-ALC) related to Electronic Warfare (EW). EW encompasses a broad range of military activities involving the use of the electromagnetic spectrum to detect, deny, degrade, disrupt, or destroy adversary electronic systems, while protecting friendly forces from similar actions. This could include radar warning receivers, jammers, electronic countermeasures, or signals intelligence equipment. The specific capabilities are not detailed in the provided data, but they are critical for modern air combat operations, providing situational awareness, threat detection, and protection against enemy radar and missile systems. The 'LSK' designation might refer to a specific program or system variant.

How does the $10.3 million contract value compare to other BAE Systems contracts for similar EW systems?

Direct comparison of the $10.3 million contract value to other BAE Systems contracts for similar EW systems is challenging without access to a comprehensive database of defense contracts with detailed scope and performance metrics. However, BAE Systems is a major global defense contractor known for producing sophisticated EW suites. The value of such systems can vary significantly based on complexity, integration requirements, platform (e.g., aircraft, ship, ground vehicle), and technological advancement. A $10.3 million award could represent a mid-tier contract for a specific subsystem, upgrade, or a limited number of full systems. Without more granular data on the specific EW capabilities procured under this contract and comparable contracts, a precise benchmarking is difficult.

What are the primary risks associated with a sole-source acquisition for advanced defense systems like EW systems?

The primary risks associated with a sole-source acquisition for advanced defense systems like EW systems include: 1. **Higher Costs:** The absence of competition can lead to inflated prices as the contractor faces less pressure to offer the most cost-effective solution. 2. **Limited Innovation:** Without competitive pressure, the incentive for the sole-source provider to innovate or offer cutting-edge solutions may be reduced. 3. **Vendor Lock-in:** The government may become dependent on a single supplier, making future procurements or transitions difficult and potentially more expensive. 4. **Reduced Transparency:** Sole-source justifications can sometimes obscure the true necessity or cost-effectiveness of the procurement. 5. **Potential for Poor Performance:** While BAE Systems is a reputable contractor, any contract carries performance risks, which are harder to mitigate when there are no alternative providers readily available.

What is the historical spending pattern for Electronic Warfare systems within the Department of Defense, and how does this contract fit?

Historical spending on Electronic Warfare (EW) systems within the Department of Defense (DoD) has been substantial and consistently significant, reflecting the critical role EW plays in modern warfare. The DoD invests billions annually across various branches (Army, Navy, Air Force, Marines) to maintain and advance its EW capabilities, countering evolving threats and ensuring electromagnetic spectrum dominance. This $10.3 million contract, awarded to BAE Systems, represents a specific, relatively modest investment within the broader EW spending landscape. It likely contributes to a particular program or addresses a specific need for EW systems, possibly for aircraft or other platforms managed by the Air Force. While not a mega-contract, it fits within the ongoing, substantial budgetary allocation towards maintaining and enhancing US EW superiority.

What is the track record of BAE Systems Information and Electronic Systems Integration Inc. in delivering EW systems to the government?

BAE Systems Information and Electronic Systems Integration Inc. has a long and extensive track record of delivering a wide array of defense systems, including sophisticated Electronic Warfare (EW) capabilities, to the U.S. government and allied nations. They are a major player in the defense electronics market, known for developing and integrating complex systems for various platforms such as aircraft, ships, and ground vehicles. Their portfolio often includes radar warning receivers, electronic countermeasures, electronic support measures, and communications intelligence systems. While specific performance details for every contract are not publicly available, BAE Systems generally maintains a strong reputation for technical expertise and program execution in the defense sector. However, like any large contractor, they have also faced scrutiny and challenges on specific programs over the years, underscoring the importance of robust government oversight.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: RIDGE HILL, YONKERS, NY, 16

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline