DoD awards $19.5M contract for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $19,478,569 ($19.5M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2019-02-12

End Date: 2021-05-31

Contract Duration: 839 days

Daily Burn Rate: $23.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: BIG SAFARI

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $19.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: BIG SAFARI Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Significant contract value for aircraft parts manufacturing. 3. Performance period spans over two years. 4. Contractor is a major defense industry player. 5. Geographic location of performance is New Hampshire. 6. No small business set-aside was utilized.

Value Assessment

Rating: questionable

The contract value of $19.5 million for aircraft parts is substantial. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The 'COST NO FEE' contract type suggests that costs are reimbursed, but the fee structure is not detailed, making a comprehensive value assessment challenging. Further analysis of the cost components would be needed to determine if this represents good value for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed openly. This approach limits the number of potential bidders and can reduce the pressure on pricing. While sole-source awards can be justified in specific circumstances, they often result in higher costs for the government compared to fully competed contracts. The lack of competition here means taxpayers may not have received the most cost-effective solution.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the competitive pricing that typically drives down costs. This can lead to higher overall government expenditure for the same goods or services.

Public Impact

The Department of the Air Force benefits from the acquisition of necessary aircraft parts. The contract supports the maintenance and operational readiness of Air Force aircraft. The primary geographic impact is in New Hampshire, where the contractor is located. The contract likely supports jobs within BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-reimbursable contract type requires careful monitoring of expenses.
Absence of small business participation limits broader economic impact.

Positive Signals

Contract awarded to a known entity with experience in defense electronics.
Contract duration provides stability for supply chain and operations.
Focus on essential aircraft parts supports military readiness.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, complex supply chains, and significant government procurement. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sub-sector. Spending in this area is critical for maintaining military aviation capabilities. Comparable spending benchmarks are difficult to establish without knowing the specific parts and quantities, but the overall defense procurement budget runs into hundreds of billions annually.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for them. This means that opportunities for small businesses to participate in this significant defense expenditure are limited. The absence of a small business focus in this sole-source award could reduce the flow of federal dollars into the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The 'COST NO FEE' structure necessitates rigorous auditing of incurred costs to ensure reasonableness and allowability. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight if issues arise.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Support
BAE Systems Contracts
Air Force Sustainment Programs

Risk Flags

Sole-source award lacks competitive pricing.
Cost-reimbursable contract type requires diligent oversight.
Limited transparency due to non-competitive nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. BIG SAFARI

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 $19.5 million.

What is the period of performance?

Start: 2019-02-12. End: 2021-05-31.

What is the track record of BAE Systems Information and Electronic Systems Integration Inc. with the Department of Defense?

BAE Systems Information and Electronic Systems Integration Inc. is a major defense contractor with a long history of working with the Department of Defense across various branches and agencies. They are known for providing a wide range of products and services, including electronic systems, intelligence, surveillance, and reconnaissance (ISR) solutions, and aerospace components. Their extensive portfolio includes numerous contracts, many of which are substantial in value. While specific performance metrics for individual contracts are often not publicly detailed, their continued success in securing large government contracts suggests a generally satisfactory performance history from the DoD's perspective. However, like any large contractor, they may have faced scrutiny or performance issues on specific projects, which would typically be managed through contract administration and oversight mechanisms.

How does the $19.5 million contract value compare to similar aircraft parts procurements by the DoD?

Directly comparing the $19.5 million contract value for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' is challenging without knowing the specific nature of the parts, quantities, and technical specifications. The Department of Defense procures a vast array of aircraft parts, ranging from simple fasteners to complex avionics and engine components. Some individual part procurements can be in the millions, while larger sustainment or upgrade programs can run into hundreds of millions or billions. Given that this is a single delivery order under a larger contract (implied by 'no: 1'), its value is moderate within the broader context of DoD aviation spending. However, the lack of competition makes it difficult to ascertain if this specific value represents a competitive market price.

What are the primary risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude is the potential for inflated costs due to the absence of competitive pressure. Without competing bids, the contractor may have less incentive to offer the most cost-effective solution. Another risk is reduced innovation, as there is no external stimulus from competitors to develop more efficient or advanced alternatives. Furthermore, a sole-source award can create a dependency on a single supplier, which can be problematic if that supplier faces production issues, financial instability, or decides to exit the market. Ensuring robust oversight and detailed cost analysis becomes critical to mitigate these risks.

How effective is the 'COST NO FEE' contract type in ensuring value for money in defense procurements?

The 'COST NO FEE' (CNF) contract type is generally used when the contractor's fee is considered insignificant or is incorporated into the cost reimbursement itself, often for non-profit organizations or specific government-owned, contractor-operated facilities. In standard defense procurements, it's less common for major supply contracts. While it aims to simplify the pricing structure, it can reduce the contractor's incentive to control costs, as their primary motivation is recovering allowable costs. Value for money is heavily dependent on stringent government oversight, auditing of costs, and clear definitions of allowable expenses. Without adequate oversight, CNF contracts can be susceptible to cost overruns and may not yield the best value compared to fixed-price contracts where the contractor bears more risk.

What are the historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Air Force?

Historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Air Force are substantial, reflecting the vast size and operational needs of the Air Force's aircraft fleet. The Air Force consistently procures a wide range of parts for maintenance, repair, and overhaul (MRO) activities across its diverse inventory of aircraft, from fighters and bombers to transport and training planes. Annual spending in this category can fluctuate based on fleet readiness requirements, modernization programs, and the lifecycle of different aircraft platforms. While specific figures for this sub-category are not readily available without detailed database queries, it represents a significant portion of the Air Force's overall sustainment budget, often running into billions of dollars annually across all types of aircraft parts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: Ball Corporation

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

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

Financial Breakdown

Contract Ceiling: $19,736,569

Exercised Options: $19,736,569

Current Obligation: $19,478,569

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $4,019,535

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3028

IDV Type: BOA

Timeline