DoD's $28.9M BAE Systems Contract for AN/APX-113 Depot Activation Lacks Competition

Contract Overview

Contract Amount: $28,908,720 ($28.9M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2010-12-20

End Date: 2016-01-18

Contract Duration: 1,855 days

Daily Burn Rate: $15.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: DEPOT ACTIVATION FOR AN/APX-113

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740, UNITED STATES OF AMERICA

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: DEPOT ACTIVATION FOR AN/APX-113 Key points: 1. Significant spending on a critical defense system. 2. Sole-source award to BAE Systems raises competition concerns. 3. Long contract duration (1855 days) warrants close monitoring. 4. Engineering services sector is prone to cost overruns without competition.

Value Assessment

Rating: questionable

The contract type is 'COST NO FEE', which can lead to cost overruns as the contractor is reimbursed for costs incurred without a fixed profit margin. The total award amount is $28,908,720.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for these engineering services.

Public Impact

Impacts Air Force readiness and operational capabilities. Potential for increased costs due to lack of competitive bidding. Highlights reliance on a single contractor for critical defense technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-reimbursement contract type
Long contract duration
No small business participation indicated

Positive Signals

Award to established defense contractor
Supports critical Air Force technology

Sector Analysis

This contract falls under Engineering Services (NAICS 541330), a sector often characterized by specialized expertise. Benchmarks for similar depot activation contracts are difficult to ascertain without competitive data.

Small Business Impact

There is no indication of small business participation in this contract. The award went to a large prime contractor, BAE Systems, suggesting limited opportunities for small businesses in this specific procurement.

Oversight & Accountability

The 'COST NO FEE' contract type requires robust oversight to ensure costs are reasonable and allocable. The long duration necessitates continuous monitoring of performance and expenditures by the Department of the Air Force.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
Cost-reimbursement contract type
Long contract duration
Potential for cost overruns
Limited transparency on justification for sole-source award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. DEPOT ACTIVATION FOR AN/APX-113

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 $28.9 million.

What is the period of performance?

Start: 2010-12-20. End: 2016-01-18.

What is the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies typically require detailed documentation, such as a Justification and Approval (J&A), to support sole-source procurements. This document should outline the market research conducted and explain why only one source could meet the requirement. Without this, it's difficult to assess if taxpayers received fair value.

How were costs validated and controlled under the 'COST NO FEE' contract type over its 1855-day duration?

Cost-reimbursement contracts, especially 'COST NO FEE' types, demand stringent oversight to manage expenditures. The government must actively audit contractor costs, ensure they are reasonable and allocable to the contract, and monitor performance against milestones. The long duration amplifies the need for continuous vigilance to prevent cost creep and ensure the project remains within budgetary expectations.

What is the long-term strategic impact of relying on a single vendor for critical depot activation services?

Sole-source reliance on BAE Systems for AN/APX-113 depot activation could create long-term strategic risks. It may stifle innovation, reduce future competition, and make the Department of Defense vulnerable to price increases or supply chain disruptions. Diversifying the vendor base or developing organic government capabilities could mitigate these risks and ensure greater flexibility.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 450 PULASKI RD, GREENLAWN, NY, 11740

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,089,877

Exercised Options: $28,908,720

Current Obligation: $28,908,720

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $90,205

Contract Characteristics

Cost or Pricing Data: YES

Timeline