DoD's $79.3M BAE Systems contract for aircraft parts awarded without competition

Contract Overview

Contract Amount: $79,341,595 ($79.3M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2022-01-01

End Date: 2022-12-31

Contract Duration: 364 days

Daily Burn Rate: $218.0K/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: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $79.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: BIG SAFARI Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Sole-source award raises questions about potential overpayment and lack of competitive pressure. 3. The contract duration of 364 days suggests a need for ongoing support for aircraft parts. 4. Awarded by the Department of the Air Force, indicating a focus on aviation readiness. 5. The North American Industry Classification System (NAICS) code 336413 points to specialized aircraft parts manufacturing. 6. The contract's value is substantial, warranting scrutiny of its necessity and pricing. 7. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

The contract's value of $79.3 million for aircraft parts, awarded sole-source, makes direct value-for-money assessment difficult without comparable sole-source awards. The firm-fixed-price structure provides some cost certainty, but the absence of competition prevents benchmarking against market rates or other potential suppliers. This lack of competition could lead to prices that are not as favorable as they might be in a more open bidding environment. Further analysis would require understanding the specific nature of the parts and the justification for the sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' (sole-source) justification. This means that only one source, BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC., was solicited or considered for this award. The lack of competition means that the government did not explore alternative suppliers or leverage a bidding process to drive down costs or ensure the best possible value. This approach is typically reserved for situations where only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no competitive pressure to incentivize lower bids. This can result in higher costs for essential defense procurements.

Public Impact

The Department of the Air Force benefits from the acquisition of critical aircraft parts, supporting its operational readiness. The contract ensures the continued availability of specialized aircraft components, vital for maintaining airworthiness. The primary beneficiary is BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC., through a significant sole-source award. The contract supports the defense industrial base, particularly in the manufacturing of aircraft parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition raises concerns about whether the government secured the most cost-effective solution.
The specific nature of the aircraft parts and the justification for sole-sourcing require further transparency.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established contractor like BAE Systems may indicate a reliance on proven capabilities.
The contract supports critical defense needs for the Air Force.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized defense components is often characterized by high barriers to entry, proprietary technologies, and long-standing relationships between government agencies and prime contractors. Spending in this area is driven by the need to maintain and modernize military aviation fleets. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar aircraft components or systems within the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that large businesses were eligible to bid, and in this case, a large business, BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC., was awarded the contract. There is no information provided on subcontracting plans for small businesses. The absence of a small business set-aside in a sole-source award means that opportunities for small businesses to participate in this specific procurement were likely limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms. As a sole-source award, the justification for not competing the contract would be subject to review. Transparency regarding the specific justification for the sole-source award and the pricing structure would be key to assessing accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
BAE Systems Defense Contracts
Air Force Aviation Support
Sole-Source Defense Procurements

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency on specific parts and justification.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $79.3 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 $79.3 million.

What is the period of performance?

Start: 2022-01-01. End: 2022-12-31.

What is the specific justification provided by the Department of the Air Force for awarding this contract to BAE Systems on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. However, the specific justification (e.g., unique capabilities, proprietary technology, urgent need, lack of other sources) is not detailed in the extract. Typically, such justifications must be formally documented and approved, often requiring a Justification and Approval (J&A) document. Without access to this J&A, it's impossible to fully assess the validity of the sole-source determination. The absence of competition means the government foregoes the potential benefits of a competitive bidding process, such as lower prices and wider innovation.

How does the awarded price of $79.3 million compare to market rates for similar aircraft parts, considering it was a sole-source award?

Directly comparing the price to market rates is challenging due to the sole-source nature of this award. Competitive awards allow for benchmarking against multiple bids and established market prices. For sole-source contracts, price reasonableness is often determined through cost analysis, comparison to previous similar contracts (if available), or by referencing independent government cost estimates. Without access to BAE Systems' cost breakdown or historical pricing data for these specific parts, it's difficult to definitively state if $79.3 million represents a fair market price. The lack of competition inherently reduces the pressure to offer the lowest possible price.

What are the potential risks associated with awarding a contract of this magnitude ($79.3M) without competition?

The primary risk of awarding a contract of this magnitude without competition is the potential for paying a higher price than would be achievable through a competitive process. This lack of price discovery can lead to inefficient use of taxpayer funds. Additionally, sole-source awards can stifle innovation by not encouraging new or existing competitors to develop alternative solutions or more cost-effective methods. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future flexibility and bargaining power. Ensuring robust oversight and justification for sole-source awards is critical to mitigating these risks.

What is BAE Systems' track record with the Department of Defense, particularly concerning aircraft parts and sole-source contracts?

BAE Systems is a major defense contractor with a significant history of providing goods and services to the Department of Defense, including various components and systems for aircraft. While this specific contract was sole-source, BAE Systems likely holds numerous other contracts, some competitive and some potentially sole-source, across different defense programs. Their extensive experience suggests a deep understanding of military requirements and established production capabilities. However, a comprehensive assessment of their track record would involve analyzing past performance reviews, on-time delivery rates, quality control metrics, and the frequency and justification of any sole-source awards across their portfolio.

How does this $79.3 million contract fit into the broader historical spending patterns for aircraft parts by the Department of the Air Force?

To understand how this $79.3 million contract fits into historical spending, one would need to analyze the Air Force's budget allocations and actual expenditures for aircraft parts over several fiscal years. This would involve looking at total spending on similar parts, the proportion allocated to sole-source versus competitive awards, and trends in pricing. A single $79.3 million contract could represent a significant portion of annual spending on specific components or be a relatively small part of the overall aircraft parts budget, depending on the scale and criticality of the items procured. Examining trends would reveal if spending in this category is increasing, decreasing, or remaining stable.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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

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

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

Financial Breakdown

Contract Ceiling: $79,341,595

Exercised Options: $79,341,595

Current Obligation: $79,341,595

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $20,664,174

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862021G4028

IDV Type: BOA

Timeline