DoD awards $50.8M for MQ-9 Reaper sensor integration, with BAE Systems as sole provider

Contract Overview

Contract Amount: $50,831,390 ($50.8M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2019-05-29

End Date: 2026-01-31

Contract Duration: 2,439 days

Daily Burn Rate: $20.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MQ-9 REAPER PROGRAM FRANCE AIR FORCE FMS SENSOR EFFORT

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $50.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: MQ-9 REAPER PROGRAM FRANCE AIR FORCE FMS SENSOR EFFORT Key points: 1. Contract awarded to a single, established provider suggests limited market exploration. 2. Fixed-price contract type aims to control costs, but requires careful scope management. 3. Long performance period (2019-2026) indicates a significant, ongoing program requirement. 4. Focus on sensor integration highlights critical technological advancements for the MQ-9 platform. 5. Foreign Military Sales (FMS) context implies international cooperation and shared defense capabilities.

Value Assessment

Rating: fair

The contract value of $50.8 million for sensor integration on the MQ-9 Reaper program appears reasonable given the specialized nature of defense technology and the specific platform. However, without direct comparable contracts for similar sensor integration efforts on the MQ-9 or equivalent platforms, a precise value-for-money assessment is challenging. The firm fixed-price structure suggests an attempt to cap costs, but the long performance period could lead to cost growth if not meticulously managed. Benchmarking against industry standards for aerospace sensor integration would provide further clarity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, BAE Systems Information and Electronic Systems Integration Inc., was deemed capable of fulfilling the requirement. This approach is often used for highly specialized or proprietary technologies where competition is not feasible or would be prohibitively expensive to establish. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. The government relies on negotiation and oversight to ensure a fair price in sole-source situations.

Public Impact

The French Air Force is the primary beneficiary, receiving enhanced MQ-9 Reaper capabilities. Services delivered include the integration of advanced sensor systems onto the MQ-9 platform. Geographic impact is global, supporting international defense partnerships and operations. Workforce implications include specialized engineering and technical roles within BAE Systems and potentially the Air Force for sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration increases risk of cost overruns if not managed effectively.
Reliance on a single contractor for critical sensor integration could create vendor lock-in.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
BAE Systems is a known entity with established expertise in defense electronics.
Foreign Military Sales program fosters international alliances and interoperability.

Sector Analysis

The MQ-9 Reaper is a significant platform in the Unmanned Aerial Vehicle (UAV) market, a sector experiencing rapid growth driven by defense modernization and technological advancements. This contract for sensor integration fits within the broader aerospace and defense manufacturing industry, specifically focusing on advanced electronics and avionics for military applications. The market for such specialized integration services is often concentrated among a few key players due to high barriers to entry, including intellectual property, security clearances, and specialized engineering talent.

Small Business Impact

This contract does not appear to involve small business set-asides, as the prime contractor is BAE Systems, a large defense corporation. There is no explicit information regarding subcontracting plans for small businesses within this award notice. The focus on specialized sensor integration by a major prime contractor may limit direct opportunities for small businesses unless they are part of BAE Systems' established supply chain.

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. As a Foreign Military Sales case, additional oversight may be provided by the Defense Security Cooperation Agency (DSCA). Transparency is facilitated through contract award databases, but detailed performance metrics and financial oversight are typically internal to the agencies involved. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

MQ-9 Reaper Program
Unmanned Aerial Vehicle (UAV) Systems
Foreign Military Sales (FMS)
Defense Electronics Manufacturing
Aerospace Sensor Technology

Risk Flags

Sole-source award
Long contract duration
Potential for cost growth
Limited transparency on specific sensor technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. MQ-9 REAPER PROGRAM FRANCE AIR FORCE FMS SENSOR EFFORT

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 $50.8 million.

What is the period of performance?

Start: 2019-05-29. End: 2026-01-31.

What is BAE Systems' track record with MQ-9 Reaper program modifications or similar sensor integration contracts?

BAE Systems has a long history of providing electronic systems and components for various military platforms, including unmanned aerial systems. While specific details on their involvement with the MQ-9 Reaper program prior to this award are not detailed in the provided data, their extensive experience in defense electronics suggests a strong capability. The company is known for its work on radar, electronic warfare systems, and communication equipment, all of which are critical components of advanced sensor packages for platforms like the MQ-9. Their track record in delivering complex integration solutions for other major defense programs would be a key indicator of their ability to successfully execute this contract.

How does the $50.8 million contract value compare to other sensor integration efforts for UAVs?

Benchmarking the $50.8 million value for MQ-9 Reaper sensor integration against other UAV sensor efforts is challenging without specific comparable data. However, the MQ-9 is a sophisticated medium-altitude, long-endurance (MALE) UAV, and its sensor suites are critical for its intelligence, surveillance, and reconnaissance (ISR) missions. Costs for integrating advanced ISR payloads, which can include electro-optical/infrared (EO/IR) cameras, synthetic aperture radar (SAR), and signals intelligence (SIGINT) systems, can range significantly. Factors influencing cost include the complexity of the sensors, the required processing power, data links, and the extent of airframe modifications. Given the platform's capabilities and the likely advanced nature of the sensors, $50.8 million for integration over several years appears within a plausible range for high-end military UAV systems, though a precise comparison would require access to similar FMS or direct purchase contracts.

What are the primary risks associated with a sole-source award for this sensor integration effort?

The primary risk associated with a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government cannot be assured it is receiving the best possible price. Another significant risk is vendor lock-in, where the reliance on a single supplier for critical technology can make future procurements or upgrades more difficult and expensive. Furthermore, sole-source contracts can sometimes lead to complacency from the contractor regarding performance or innovation, as there is no immediate threat from competitors. Effective negotiation and robust contract oversight are crucial to mitigate these risks.

How effective is the firm fixed-price contract type in managing costs for this long-duration program?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and unlikely to change significantly. For this sensor integration effort, the FFP structure provides the government with cost certainty, as the contractor assumes the risk of cost overruns. However, the long performance period (2019-2026) introduces a risk. If unforeseen technical challenges arise or the scope implicitly expands due to evolving requirements, the contractor might seek change orders, potentially increasing the overall cost. The government's ability to clearly define the integration requirements upfront and manage scope creep will be critical to realizing the cost-control benefits of the FFP structure over the contract's duration.

What are the implications of this contract being part of a Foreign Military Sales (FMS) program?

This contract being part of a Foreign Military Sales (FMS) program means that the United States is providing defense articles and services to France. The FMS process involves the U.S. government acting as an intermediary, procuring the goods or services from U.S. defense contractors and then transferring them to the foreign partner. This ensures that the U.S. maintains control over the end-use of the equipment and promotes interoperability between U.S. and allied forces. For taxpayers, it means that U.S. defense budgets are supporting both domestic defense industrial capacity and the security cooperation efforts with allies. The pricing and terms are negotiated under U.S. government oversight, aiming to provide a fair price to the foreign purchaser while covering U.S. administrative and program costs.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: Ball Corporation

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

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: $50,831,390

Exercised Options: $50,831,390

Current Obligation: $50,831,390

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $912,069

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline