DoD's $32M BAE Systems contract for aircraft parts awarded without competition

Contract Overview

Contract Amount: $32,086,687 ($32.1M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2026-07-01

Contract Duration: 1,370 days

Daily Burn Rate: $23.4K/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 $32.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: BIG SAFARI Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 1370 days suggests a long-term need for these aircraft parts. 3. BAE Systems is a large, established defense contractor with a significant presence in the sector. 4. The contract's value of over $32 million warrants scrutiny regarding its necessity and pricing. 5. Lack of competition raises concerns about whether the government secured the best possible value. 6. The 'Other Aircraft Parts' classification indicates a broad scope of potential items covered.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The firm fixed-price structure provides some cost certainty, but the absence of competition means the government may not have achieved the lowest possible price. Comparing this to similar sole-source awards for aircraft parts would be necessary to assess if the pricing is reasonable, but such data is not readily available in this context. The total award value of over $32 million for a 1370-day period necessitates a thorough review of the specific parts and services procured to ensure they align with market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' procedure, indicating a sole-source acquisition. This means that BAE Systems was the only vendor considered for this award. The lack of competition prevents a robust price discovery process, as there were no other offers to compare against. This approach is typically justified when only one source can fulfill the requirement, but it bypasses the benefits of a competitive environment.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price, potentially leading to higher overall expenditure.

Public Impact

The Department of the Air Force benefits from the continued availability of critical aircraft parts. This contract ensures the operational readiness and maintenance of specific aircraft platforms. The services delivered are essential for sustaining military aviation capabilities. The geographic impact is likely concentrated around Air Force bases and maintenance facilities where these aircraft operate.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value for taxpayers.
Lack of transparency in the procurement process due to no competition.
Potential for cost overruns if pricing is not rigorously managed without market comparison.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
BAE Systems is an established contractor with proven capabilities in defense.
Contract ensures continued support for critical Air Force assets.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sub-sector, which is a critical component of the broader defense industrial base. Spending in this area is often driven by the need to maintain aging fleets and support new platforms. Comparable spending benchmarks are difficult to establish without knowing the specific parts, but large sole-source awards are not uncommon for specialized defense components.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large prime contractor like BAE Systems suggests that the focus is on established capabilities rather than fostering small business participation through this specific procurement vehicle. Further analysis would be needed to determine if BAE Systems has a history of subcontracting with small businesses on similar contracts.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm fixed-price nature provides some level of cost control, but the lack of competition means that oversight must focus heavily on ensuring the necessity of the procured items and the reasonableness of the pricing. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair
Defense Logistics Agency Contracts
Air Force Procurement
BAE Systems Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing without market comparison

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.1 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 $32.1 million.

What is the period of performance?

Start: 2022-09-30. End: 2026-07-01.

What is the specific nature of the 'Other Aircraft Parts and Auxiliary Equipment' being procured under this contract?

The provided data does not specify the exact nature of the 'Other Aircraft Parts and Auxiliary Equipment'. This category is broad and can encompass a wide range of components, from engine parts and avionics to structural elements and maintenance supplies. Without further details, it is challenging to assess the criticality or uniqueness of these parts. Understanding the specific items would allow for a more precise evaluation of the necessity of a sole-source award and the reasonableness of the pricing. This information is typically found in the contract's statement of work or detailed specifications.

What justifications were provided for awarding this contract on a sole-source basis?

The data indicates the contract was 'NOT COMPETED,' implying a sole-source justification was used. Common justifications for sole-source awards in defense procurement include situations where only one responsible source can provide the required supplies or services, or when there is a compelling urgency that precludes full and open competition. For aircraft parts, this could be due to proprietary technology, unique manufacturing capabilities, or the need to maintain compatibility with specific, legacy aircraft systems where only the original equipment manufacturer or an authorized supplier can provide the necessary components. The specific justification would be detailed in the contract's acquisition plan and justification and approval (J&A) document.

How does the $32 million award value compare to historical spending on similar aircraft parts by the Air Force?

Direct historical spending comparisons for this specific contract are not available from the provided data. However, the $32 million award over approximately 3.7 years (1370 days) represents a significant investment. To benchmark this, one would need to analyze historical contracts for similar types of aircraft parts, considering factors like the specific aircraft platform, the quantity and complexity of the parts, and whether those contracts were competitively awarded. Sole-source awards, by their nature, tend to be higher than competitively won contracts. A comprehensive analysis would involve querying federal procurement databases for comparable items and contract types.

What is BAE Systems' track record with the Department of Defense, particularly for aircraft parts?

BAE Systems is a major global defense contractor with a substantial and long-standing relationship with the Department of Defense (DoD). They have a proven track record in various defense sectors, including aerospace, electronics, and naval systems. For aircraft parts, BAE Systems is known for supplying a wide range of components, systems, and support services for numerous military aircraft platforms. Their history with the DoD includes numerous large contracts, both competed and sole-source. While this specific contract is sole-source, BAE's overall performance history with the DoD is generally considered strong, though specific contract performance can vary.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude include: 1) Inflated pricing: Without competition, the contractor may not have sufficient incentive to offer the lowest possible price, leading to higher costs for the government. 2) Limited innovation: The absence of multiple bidders can stifle innovation and the exploration of alternative solutions. 3) Vendor lock-in: Relying on a single source can create dependency and make it difficult to switch suppliers in the future, even if more cost-effective options become available. 4) Reduced transparency: Sole-source procurements often have less public visibility, making it harder to scrutinize the value and necessity of the contract. 5) Potential for complacency: The contractor may become complacent in performance or responsiveness due to the lack of competitive pressure.

How does the firm fixed-price contract type mitigate or exacerbate risks in this sole-source scenario?

The firm fixed-price (FFP) contract type is generally favorable to the government as it shifts the risk of cost overruns to the contractor. This means BAE Systems is obligated to deliver the specified parts and services for the agreed-upon price, regardless of their actual costs. In a sole-source scenario, FFP provides a degree of cost certainty for the government, preventing unexpected increases in the total contract value. However, it does not guarantee the 'best' price; the fixed price itself could still be too high if not properly negotiated or benchmarked. Therefore, while FFP mitigates cost overrun risk for the government, the risk of paying an above-market price remains significant in a sole-source context.

Industry Classification

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

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: $32,086,687

Exercised Options: $32,086,687

Current Obligation: $32,086,687

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $16,107,426

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