DoD awards $32.4M for aircraft parts, with BAE Systems as sole source

Contract Overview

Contract Amount: $32,435,016 ($32.4M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-30

End Date: 2026-10-30

Contract Duration: 760 days

Daily Burn Rate: $42.7K/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 $32.4 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, raising questions about price competition. 2. Long performance period of 760 days suggests a need for sustained support. 3. Fixed-price contract type shifts risk to the contractor. 4. No small business set-aside indicates potential for large prime contractor benefits. 5. The contract is for aircraft parts, a critical component of defense readiness. 6. Geographic location in New Hampshire may impact local economic activity.

Value Assessment

Rating: questionable

The contract value of $32.4 million for aircraft parts requires careful benchmarking against similar sole-source awards. Without competitive bidding, it is difficult to ascertain if the pricing reflects fair market value. The fixed-price nature of the contract is a positive indicator for cost control, but the lack of competition means taxpayers may not be receiving the best possible price. Further analysis of historical pricing for similar components from BAE Systems would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, BAE Systems Information and Electronic Systems Integration Inc., was solicited. This approach bypasses the competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for specialized needs or existing systems, they limit price discovery and can lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from a competitive bidding environment. This can result in higher overall spending for the same goods or services.

Public Impact

The Department of Defense benefits from the acquisition of essential aircraft parts, ensuring operational readiness. BAE Systems Information and Electronic Systems Integration Inc. will receive significant revenue from this contract. The contract's performance period extends into late 2026, indicating a long-term need for these parts. Workforce in New Hampshire may be supported by this contract, depending on BAE Systems' operational structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of small business participation may mean fewer opportunities for smaller firms in the supply chain.
The specific nature of 'Other Aircraft Parts' could indicate a specialized or proprietary component, requiring further justification for sole-sourcing.

Positive Signals

Fixed-price contract type shifts cost overrun risk to the contractor.
Long performance period ensures sustained availability of critical aircraft parts.
Award to an established contractor like BAE Systems may indicate reliability and proven performance.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. Contracts for aircraft parts are crucial for maintaining the operational readiness of military fleets. The market for these parts can be specialized, with established manufacturers often holding proprietary knowledge or certifications. Benchmarking this contract's value against other sole-source awards for similar components within the defense sector is essential for assessing value for money.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb': false. This means the prime contract was not specifically reserved for small businesses. Consequently, BAE Systems, a large business, will be the direct recipient. While large prime contractors are often required to subcontract a portion of their work to small businesses, the absence of a set-aside means opportunities for direct prime contracting with small businesses are limited in this instance.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The fixed-price nature of the contract provides a degree of accountability by placing cost risk on the contractor. Transparency regarding the justification for the sole-source award and detailed performance metrics would enhance oversight and taxpayer confidence.

Related Government Programs

Aircraft Maintenance and Repair
Defense Logistics Agency Procurement
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.4 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $32.4 million.

What is the period of performance?

Start: 2024-09-30. End: 2026-10-30.

What is the historical spending pattern for this specific type of aircraft part with BAE Systems?

Analyzing historical spending data for this specific part with BAE Systems is crucial for understanding cost trends and identifying potential price escalations. Without access to detailed historical contract data, it's challenging to provide a precise pattern. However, sole-source awards often lack the transparency needed to track such patterns effectively. If previous awards for similar parts were also sole-sourced, it might indicate a consistent reliance on BAE Systems for these components, potentially at prices not optimized by competition. A review of past contract modifications, delivery orders, and pricing adjustments would be necessary to establish a reliable historical spending pattern and assess if costs have increased disproportionately over time.

How does the awarded price compare to industry benchmarks for similar aircraft parts?

Benchmarking the awarded price of $32.4 million against industry standards for similar aircraft parts is critical for assessing value for money, especially given the sole-source nature of this contract. The 'na' code 336413 points to 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' Without specific part numbers or detailed specifications, a precise comparison is difficult. However, industry benchmarks typically consider factors like material costs, manufacturing complexity, research and development investment, and profit margins. Given this is a sole-source award, the price is less likely to reflect competitive market pressures. Therefore, a thorough analysis would involve comparing the unit costs, if available, against publicly available pricing for comparable components from other manufacturers or against historical pricing data for similar items procured competitively by the DoD.

What are the specific risks associated with a sole-source award for critical aircraft parts?

Sole-source awards for critical aircraft parts carry several inherent risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from the cost-saving pressures that multiple bidders would typically exert. This can result in taxpayers paying more than necessary. Secondly, it can foster complacency in the contractor, potentially leading to reduced attention to quality or delivery schedules, as there is no immediate threat of losing future business to competitors. Furthermore, reliance on a single source can create supply chain vulnerabilities; if the sole provider experiences production issues, quality control failures, or financial instability, the government's ability to procure these essential parts could be severely disrupted, impacting operational readiness.

What is the track record of BAE Systems Information and Electronic Systems Integration Inc. in delivering similar aircraft parts to the DoD?

BAE Systems Information and Electronic Systems Integration Inc. is a major defense contractor with a substantial track record of delivering a wide range of products and services to the Department of Defense, including various aircraft components. Their history typically involves fulfilling complex contracts, often under challenging conditions. However, assessing their specific track record for 'Other Aircraft Parts' under this particular contract requires a deeper dive into past performance evaluations, on-time delivery rates, quality metrics, and any history of contract disputes or overruns related to similar procurements. While generally considered a reliable supplier, the performance on this sole-source contract should be monitored closely against established metrics to ensure continued satisfactory delivery.

What are the potential implications of the long performance period (760 days) on cost and obsolescence?

A long performance period of 760 days (approximately two years) for aircraft parts can have dual implications for cost and obsolescence. On the cost side, it allows for more predictable production planning and potentially economies of scale for the contractor, which could translate to better pricing if negotiated effectively. However, it also ties the government to a single price for an extended duration, potentially missing out on market price reductions if component costs decrease over time. Regarding obsolescence, a longer period increases the risk that the parts themselves, or the technology they incorporate, could become outdated or unsupported by the time the contract concludes, especially in rapidly evolving aerospace technology. This necessitates careful planning and potentially provisions for technology refresh or end-of-life support.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

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: $43,244,479

Exercised Options: $32,435,016

Current Obligation: $32,435,016

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