DoD Awards $13.2M for Digital EW Systems to BAE Systems, Raising Competition Concerns

Contract Overview

Contract Amount: $13,193,410 ($13.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-08-19

End Date: 2027-01-30

Contract Duration: 894 days

Daily Burn Rate: $14.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DIGITAL ELECTRONICS WARFARE SYSTEM

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $13.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: DIGITAL ELECTRONICS WARFARE SYSTEM Key points: 1. Significant contract value for specialized electronic warfare systems. 2. Sole-source award to BAE Systems limits competitive pricing. 3. Potential for higher costs due to lack of competition. 4. Focus on advanced electronic warfare capabilities within the Air Force.

Value Assessment

Rating: questionable

The contract value of $13.2 million for a Digital Electronics Warfare System is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar systems or potential alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition. This approach can be justified for unique capabilities but often leads to less aggressive pricing and reduced price discovery.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these digital electronics warfare systems, as there was no market pressure to drive down costs.

Public Impact

Enhances critical electronic warfare capabilities for the U.S. Air Force. Supports national defense by providing advanced EW systems. Potential for long-term reliance on a single vendor for this technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competitive pricing
Potential for cost overruns

Positive Signals

Addresses critical defense need
Utilizes advanced technology

Sector Analysis

This contract falls within the defense sector, specifically focusing on electronic warfare systems, which are crucial for modern military operations. Spending in this niche area is often characterized by high R&D costs and specialized manufacturing.

Small Business Impact

The data indicates no specific set-aside for small businesses, and the prime contractor is BAE Systems, a large defense corporation. This suggests limited direct opportunities for small businesses on this particular contract.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the pricing remains fair and reasonable throughout the contract duration. Accountability for performance and cost control is essential.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing.
Lack of transparency in price discovery.
Risk of vendor lock-in.
Limited small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. DIGITAL ELECTRONICS WARFARE SYSTEM

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 $13.2 million.

What is the period of performance?

Start: 2024-08-19. End: 2027-01-30.

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

The justification for a sole-source award typically centers on unique technical capabilities, proprietary technology, or urgent needs where only one vendor can meet the requirements. Agencies must document thorough market research to confirm no other sources exist or can be developed in a timely manner. Without this documentation, it raises questions about whether competitive alternatives were adequately explored, potentially impacting value for money.

How will the government ensure cost-effectiveness and prevent potential overpricing given the lack of competition?

To mitigate the risks of cost overruns in a sole-source contract, the government often employs robust cost analysis, detailed negotiation strategies, and stringent performance monitoring. This includes reviewing the contractor's cost proposals, benchmarking against similar historical contracts, and potentially incorporating incentive clauses tied to cost savings or performance metrics. Regular audits and reviews are also critical to ensure fair pricing.

What is the long-term strategic implication of awarding this critical EW system solely to BAE Systems?

Sole-source awards for critical systems can lead to vendor lock-in, potentially limiting future innovation and competition. While ensuring immediate capability, it may reduce the government's leverage in future procurements and could stifle the growth of competing technologies. A long-term strategy might involve fostering competition through technology insertion or developing alternative sources over time.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA852317R0009

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 65 SPIT BROOK RD, NASHUA, NH, 02

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: $13,193,410

Exercised Options: $13,193,410

Current Obligation: $13,193,410

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852319D0001

IDV Type: IDC

Timeline