Air Force awards $19.5M contract for electronic systems integration to BAE Systems, highlighting a sole-source procurement

Contract Overview

Contract Amount: $14,045,661 ($14.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2006-04-13

End Date: 2007-08-31

Contract Duration: 505 days

Daily Burn Rate: $27.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200607!000315!5700!FA8620!ASC/RAK !FA862005C4307 !A!N! !N! ! !20060413!20070831!194956751!876861790!217304393!N!BAE SYSTEMS INFORMATION & ELEC!164 TOTOWA RD !WAYNE !NJ!07470!77870!031!34!WAYNE !PASSAIC !NEW JERSEY!+000009121538!N!N!000009121538!AD91!RDTE/OTHER DEFENSE-BASIC RESEARCH !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !334419!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!N!J!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y! ! !0001! !

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: 200607!000315!5700!FA8620!ASC/RAK !FA862005C4307 !A!N! !N! ! !20060413!20070831!194956751!876861790!217304393!N!BAE SYSTEMS INFORMATION & ELEC!164 TOTOWA RD !WAYNE !NJ!07470!77870!031!34!WAYNE !PASS… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market exploration. 2. The contract's duration of 505 days suggests a focused, short-term need for specific electronic systems. 3. BAE Systems, a major defense contractor, likely possesses unique capabilities for this specialized integration work. 4. The award falls under 'Other Electronic Component Manufacturing,' indicating a niche but critical defense supply chain segment. 5. Lack of competition limits opportunities for taxpayer savings through competitive bidding.

Value Assessment

Rating: fair

The contract value of $19.5 million for a 505-day period appears reasonable for specialized electronic systems integration, especially given the sole-source nature. However, without competitive bids, it's difficult to benchmark against market rates or determine if it represents the best possible value. The fixed-price structure offers some cost certainty, but the absence of competition means the government cannot be assured of the most economical price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, BAE Systems, was solicited. This typically occurs when a specific capability is required that only one contractor can provide, or in cases of urgent need. The lack of competition means there were no other proposals to compare against, potentially leading to a higher price than if multiple companies had bid.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding processes, potentially resulting in higher overall government spending.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which receives critical electronic systems integration services. The services delivered are essential for maintaining and potentially upgrading the operational capabilities of Air Force platforms. The geographic impact is primarily within the United States, supporting defense industrial base activities. This contract supports specialized technical roles within BAE Systems, contributing to the defense technology workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to single-bidder solicitation.
Potential for cost overruns if not closely managed, despite fixed-price structure.

Positive Signals

BAE Systems is a reputable defense contractor with established expertise in electronic systems.
Fixed-price contract type provides some cost predictability.
The contract addresses a specific, likely critical, defense requirement.

Sector Analysis

This contract falls within the 'Other Electronic Component Manufacturing' sector, a specialized area of the broader defense industrial base. This sector is crucial for providing advanced technological components and integration services for military platforms. The market is often characterized by high barriers to entry due to specialized knowledge and security requirements, leading to a concentration of large, established players like BAE Systems. Comparable spending benchmarks are difficult to establish precisely due to the niche nature, but significant government investment is typical for such critical defense capabilities.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded to a large prime contractor, BAE Systems. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The focus on a large, established entity suggests that opportunities for small businesses may be limited unless they are lower-tier suppliers to BAE Systems.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods or services for a set price. Transparency is limited due to the sole-source nature of the award, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight if issues arise.

Related Government Programs

Air Force Research Laboratory Contracts
Defense Advanced Research Projects Agency (DARPA) Projects
Electronic Warfare Systems Procurement
Aerospace Component Manufacturing
Military Communications Systems

Risk Flags

Sole-source award
Limited competition
Potential for price inefficiency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. 200607!000315!5700!FA8620!ASC/RAK !FA862005C4307 !A!N! !N! ! !20060413!20070831!194956751!876861790!217304393!N!BAE SYSTEMS INFORMATION & ELEC!164 TOTOWA RD !WAYNE !NJ!07470!77870!031!34!WAYNE !PASSAIC !NEW JERSEY!+000009121538!N!N!000009121538!AD91!RDTE/OTHER DEFENSE-BASIC RESEARCH !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !334419!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 $14.0 million.

What is the period of performance?

Start: 2006-04-13. End: 2007-08-31.

What specific electronic systems integration services were provided under this contract?

The provided data indicates the contract NAICS code is 334419, 'Other Electronic Component Manufacturing,' and the PSC code is AD91, 'RDTE/OTHER DEFENSE-BASIC RESEARCH.' This suggests the contract likely involved research, development, testing, and evaluation (RDTE) related to the integration of electronic components and systems for defense applications. Specific services could include the design, assembly, testing, and integration of complex electronic subsystems into larger military platforms, such as aircraft, vehicles, or command and control systems. The 'basic research' designation implies foundational work rather than the development of a specific, fielded product.

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's requirements. For BAE Systems, this could be due to proprietary technology, unique expertise in a highly specialized area of electronic systems integration, or a critical and urgent need where soliciting competition would cause unacceptable delays. The specific justification for this particular award is not detailed in the provided data but would have been documented by the Air Force at the time of procurement, likely citing factors like unique technical capabilities or the need to leverage existing, specialized knowledge critical to national security.

What is BAE Systems' track record with similar Air Force contracts?

BAE Systems is a major defense contractor with a long history of performing complex electronic systems integration for the U.S. Air Force and other military branches. While this specific contract was for $19.5 million and lasted approximately 1.6 years, BAE Systems has been involved in numerous larger and longer-duration contracts encompassing areas like avionics, electronic warfare, communications systems, and command and control integration. Their track record generally includes successful delivery on high-value, technologically advanced programs, though like any large contractor, they have also faced scrutiny on specific contracts regarding cost, schedule, and performance. A deeper dive into their contract history would reveal specific performance metrics and areas of expertise.

How does the $19.5 million value compare to other electronic systems integration contracts?

The $19.5 million value for this 505-day contract is moderate within the context of large defense procurements. While significant for a single award, it is considerably smaller than major platform integration programs or long-term sustainment contracts, which can run into hundreds of millions or billions of dollars. For specialized R&D or component integration, this value is not unusual. However, without knowing the precise scope and complexity of the 'other electronic component manufacturing' and 'basic research' involved, a direct comparison is challenging. It suggests a focused effort rather than a broad system overhaul.

What are the potential risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the lack of competitive pressure, which can lead to suboptimal pricing for the government. Without competing bids, there's a reduced incentive for the contractor to offer the lowest possible price. Additionally, sole-source awards can sometimes indicate a lack of available alternatives or a reliance on a single supplier, potentially creating supply chain vulnerabilities. There's also a risk that the government may not be aware of more innovative or cost-effective solutions that could have been proposed by other bidders. Effective oversight and robust negotiation are crucial to mitigate these risks.

What is the historical spending pattern for 'Other Electronic Component Manufacturing' by the Air Force?

Historical spending by the Air Force on 'Other Electronic Component Manufacturing' (NAICS 334419) is substantial, reflecting the critical role of advanced electronics in modern air and space capabilities. While specific figures fluctuate annually based on modernization programs and research initiatives, this sector consistently represents a significant portion of the Air Force's procurement budget. Spending often targets areas like advanced sensors, communication modules, specialized processors, and integrated circuit fabrication for defense applications. The Air Force relies heavily on contractors like BAE Systems to maintain technological superiority, driving consistent investment in this manufacturing sub-sector over many years.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

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: 164 TOTOWA RD, WAYNE, NJ, 11

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline