DoD awards $284M contract for aircraft manufacturing to BAE Systems, with no competition

Contract Overview

Contract Amount: $28,400,210 ($28.4M)

Contractor: BAE Systems Space & Mission Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2018-11-19

End Date: 2021-06-30

Contract Duration: 954 days

Daily Burn Rate: $29.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BIG SAFARI

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $28.4 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC. for work described as: BIG SAFARI Key points: 1. The contract value of $284 million represents a significant investment in aircraft manufacturing capabilities. 2. The absence of competition raises questions about potential price overruns and limited value for money. 3. The contract's duration of 954 days suggests a long-term commitment to the selected contractor. 4. The firm-fixed-price structure aims to transfer risk to the contractor, but oversight is crucial. 5. This award falls within the broader defense sector, specifically supporting aircraft manufacturing. 6. The lack of small business involvement noted in the data warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

Benchmarking the value of this $284 million contract is challenging without specific details on the aircraft manufactured and comparable market rates. However, the lack of competition inherently limits the ability to assess if the price reflects the best possible value. Firm-fixed-price contracts can be efficient, but without competitive pressure, there's a risk of inflated costs. Further analysis would require understanding the specific deliverables and comparing them to industry standards for similar aircraft manufacturing projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source, 'not competed' (CT: NOT COMPETED) strategy. This means that BAE Systems was the only bidder considered, and the Department of Defense did not solicit offers from other potential contractors. Such awards are typically justified by specific circumstances, such as the unique capabilities of a single provider or urgent national security needs. The lack of competition limits price discovery and may result in higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as there was no market pressure to drive down prices. This also means fewer opportunities for other businesses to secure government contracts.

Public Impact

The primary beneficiary is BAE Systems Space & Mission Systems Inc., receiving a substantial contract award. The contract supports the production or modification of aircraft, contributing to the Department of the Air Force's operational capabilities. The geographic impact is centered in Colorado (SN: COLORADO), where the contractor is located or where the work will be performed. This contract likely has implications for the aerospace manufacturing workforce, potentially creating or sustaining jobs within BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can stifle innovation by limiting market entry for other firms.
Transparency regarding the justification for a sole-source award is limited in the provided data.
The absence of small business set-aside flags raises concerns about opportunities for smaller enterprises.

Positive Signals

The firm-fixed-price contract structure shifts cost risk to the contractor.
The contract duration of over two years indicates a stable, long-term commitment.
BAE Systems is a known entity in the defense sector, suggesting established capabilities.

Sector Analysis

The aerospace and defense industry is a significant sector for federal spending, with aircraft manufacturing being a critical component. This contract with BAE Systems falls within this domain, contributing to the overall defense budget allocated to aviation assets. The market for specialized aircraft manufacturing is often characterized by high barriers to entry, advanced technology requirements, and a limited number of qualified contractors, which can sometimes lead to sole-source or limited competition awards. Comparable spending benchmarks would typically involve analyzing other large-scale aircraft production or modification contracts within the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SS: false, SB: false). This means that the full value of the contract was available to large businesses, and there is no explicit indication of subcontracting requirements for small businesses. While BAE Systems may engage in subcontracting, the lack of a specific set-aside or reporting on subcontracting goals means that opportunities for the small business ecosystem in this particular award are not guaranteed or transparently tracked through this contract vehicle.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance metrics and payment schedules tied to milestones. Transparency is limited by the sole-source nature of the award; however, contract award data is generally made public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Procurement, Air Force
Defense Production Act Investments
Aerospace Manufacturing Contracts
Department of Defense Major Weapon Systems

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency on specific aircraft and program details.
No explicit small business set-aside or subcontracting requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.4 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC.. BIG SAFARI

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS SPACE & MISSION SYSTEMS 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 $28.4 million.

What is the period of performance?

Start: 2018-11-19. End: 2021-06-30.

What specific type of aircraft is being manufactured or modified under this contract, and what are its intended uses?

The provided data does not specify the exact type of aircraft being manufactured or modified under contract number 336411. The North American Industry Classification System (NAICS) code 336411 pertains to 'Aircraft Manufacturing,' which is a broad category. Without further details, it's impossible to determine if this contract relates to fighter jets, transport planes, drones, or other aerial vehicles. The intended uses would depend on the aircraft type, but generally, such contracts support military readiness, strategic deployment, or specialized operational requirements for the Department of the Air Force.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data indicates the contract was 'NOT COMPETED' (CT: NOT COMPETED), signifying a sole-source award. Typical justifications for sole-source contracts include situations where only one responsible source can provide the required supplies or services, such as when a specific technology is proprietary, a unique capability is required, or there's an urgent need that cannot be met through competitive procedures. For this contract, the specific justification from the Department of Defense is not provided in the data. However, such awards are subject to specific federal acquisition regulations that require detailed documentation and justification to ensure they are used appropriately and not simply to avoid competition.

How does the firm-fixed-price (FFP) contract type align with the risks associated with aircraft manufacturing, and what are the potential implications for cost control?

A Firm-Fixed-Price (FFP) contract type, as indicated (PT: FIRM FIXED PRICE), is generally preferred by the government as it places the majority of the cost risk on the contractor. This means the contractor agrees to a fixed price for the work, and any cost overruns are their responsibility, not the government's. In aircraft manufacturing, which can involve complex processes and unforeseen technical challenges, an FFP contract incentivizes the contractor to manage costs efficiently and adhere to the agreed-upon budget. However, if the initial price was not adequately negotiated or if unforeseen issues arise that significantly impact the contractor's costs, the contractor might seek contract modifications or face financial strain, potentially impacting delivery schedules or quality if not managed carefully.

What is the track record of BAE Systems Space & Mission Systems Inc. in delivering similar aircraft manufacturing contracts for the Department of Defense?

BAE Systems Space & Mission Systems Inc. is a major defense contractor with a significant history of involvement in various aerospace and defense programs. While the provided data does not detail their specific track record for this particular contract (336411), the company is known for its extensive experience in designing, manufacturing, and integrating complex systems for military applications, including aircraft components and platforms. Their past performance on similar large-scale defense contracts would typically be assessed by the Department of Defense during the procurement process, even in sole-source situations, to ensure capability and reliability. A comprehensive review would involve examining past performance evaluations and contract completion history.

How does the $284 million contract value compare to historical spending on aircraft manufacturing by the Department of the Air Force?

The $284 million contract value represents a substantial investment in aircraft manufacturing. To contextualize this, one would need to compare it against the Department of the Air Force's historical spending trends in the aircraft manufacturing sector. This would involve analyzing annual budgets allocated to aircraft procurement, modification, and sustainment over several fiscal years. For instance, if the Air Force typically spends billions annually on aircraft, $284 million might represent a specific program or a significant component of a larger initiative. Conversely, if it's an outlier, it might indicate a new or particularly large-scale project. Without access to historical spending data for this specific category, it's difficult to definitively benchmark this award's size.

Industry Classification

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

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: Ball Corp

Address: 1600 COMMERCE ST, BOULDER, CO, 80301

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: $28,400,210

Exercised Options: $28,400,210

Current Obligation: $28,400,210

Actual Outlays: $6,096,697

Subaward Activity

Number of Subawards: 33

Total Subaward Amount: $11,538,756

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline