DoD awards $631M contract for aircraft parts, with BAE Systems as sole source

Contract Overview

Contract Amount: $6,310,564 ($6.3M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2023-12-30

End Date: 2027-03-31

Contract Duration: 1,187 days

Daily Burn Rate: $5.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BIG SAFARI

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $6.3 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 discovery and potential for overpayment. 2. The contract's duration of nearly 3.5 years suggests a long-term need for these aircraft parts. 3. Awarded by the Department of the Air Force, indicating a focus on aviation readiness. 4. The significant value of the contract points to a critical component or a large quantity of parts required. 5. Lack of competition may limit opportunities for other manufacturers to supply the DoD. 6. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation if not managed diligently. Comparing this to similar sole-source awards for specialized aircraft components would be necessary to assess if the fixed fee is reasonable and if the overall cost aligns with market expectations for such unique items. The absence of competition means taxpayers may not be receiving the most advantageous pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, BAE Systems Information and Electronic Systems Integration Inc., was solicited. This typically occurs when a specific capability or proprietary technology is required, or in situations where only one source can reasonably fulfill the requirement. The lack of competition means that the government did not benefit from a range of proposals and price negotiations that would typically occur in a full and open competition.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the lowest possible price, potentially leading to higher costs for taxpayers. It also bypasses opportunities to foster a broader base of suppliers for critical defense needs.

Public Impact

The Department of the Air Force directly benefits from this contract, ensuring the availability of essential aircraft parts. This contract supports the operational readiness and maintenance of Air Force aircraft fleets. The primary beneficiaries are the Air Force's aviation units and the personnel who operate and maintain these aircraft. The contract's impact on the workforce is likely concentrated within BAE Systems, potentially supporting specialized manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can lead to cost overruns if not rigorously managed.
Lack of transparency in pricing due to no competitive bidding.
Potential for vendor lock-in if this is a highly specialized component.

Positive Signals

Ensures supply of critical aircraft parts for Air Force operations.
BAE Systems is a known entity with existing defense contracts, suggesting some level of established capability.
Contract duration provides stability for supply chain planning.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aerospace components is often characterized by high barriers to entry due to technological complexity, stringent quality requirements, and long development cycles. While the exact market size for these specific parts is not detailed, the overall aerospace manufacturing industry is substantial, with significant government procurement driving a portion of it. This contract represents a specific procurement within that larger ecosystem, likely for a component that is either proprietary or has limited alternative suppliers.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, as a large prime contractor, BAE Systems may engage small businesses as subcontractors for certain components or services, though this is not mandated by the contract terms provided. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were not prioritized.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Air Force's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing will be crucial to ensure costs are reasonable and the fixed fee is justified. Transparency may be limited due to the sole-source nature, but contract performance reviews and milestone tracking should be in place. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Parts Manufacturing
Aerospace Component Procurement
Department of Defense Supply Chain Management
Air Force Logistics and Maintenance Contracts

Risk Flags

Sole-source award may indicate a lack of market research or a constrained supply base.
Cost Plus Fixed Fee contract type increases the risk of cost overruns.
Lack of competition limits opportunities for small businesses and potentially increases overall cost.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.3 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 $6.3 million.

What is the period of performance?

Start: 2023-12-30. End: 2027-03-31.

What is the specific type of aircraft part being procured under this contract, and why is it considered sole-source?

The provided data does not specify the exact type of aircraft part. However, sole-source awards are typically justified when the part is proprietary to BAE Systems, requires unique manufacturing processes or technology only they possess, or is a critical component for which no other qualified supplier exists. The Department of the Air Force would have a documented justification for this sole-source determination, likely involving technical specifications, intellectual property rights, or a lack of viable alternatives that meet stringent military requirements. Further investigation into the contract's justification documentation would be needed to ascertain the precise reasons.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar aircraft parts, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty in the cost of performance. Compared to fixed-price contracts, CPFF offers more flexibility for the contractor but shifts more cost risk to the government. The primary risk is that the contractor may have less incentive to control costs, as the fee is fixed regardless of the final cost. This necessitates robust government oversight to scrutinize costs and ensure efficiency. For specialized aircraft parts, CPFF might be chosen if development or unique manufacturing processes are involved, but it requires diligent management to prevent cost overruns.

What is BAE Systems' track record with the Department of the Air Force for similar contracts?

BAE Systems is a major defense contractor with a significant history of supplying various systems and components to the Department of Defense, including the Air Force. While specific details on their track record for this exact type of aircraft part are not provided, the company generally has extensive experience in aerospace manufacturing and electronic systems integration. Their performance on past contracts would typically be evaluated through contract performance reports and past performance questionnaires. A review of their historical performance ratings and any significant issues on prior Air Force contracts would provide context for this current award.

What is the historical spending trend for this specific aircraft part or category by the Department of the Air Force?

The provided data does not include historical spending information for this specific part or category. To assess historical spending trends, one would need to access federal procurement databases (like FPDS or SAM.gov) and search for previous contracts awarded by the Department of the Air Force for similar parts or under the same Product Service Code (PSC) or North American Industry Classification System (NAICS) code. Analyzing past contract values, durations, and awardees would reveal whether this $631 million award represents an increase, decrease, or consistent level of spending for this requirement over time.

Are there any known performance issues or risks associated with BAE Systems' delivery of aircraft parts to the DoD?

The provided data does not highlight any specific performance issues or risks associated with BAE Systems for this contract. However, as with any large defense contractor, their performance can vary across different contracts. General risks in aircraft parts procurement include supply chain disruptions, quality control failures, and delivery delays. For BAE Systems, a review of their past performance ratings, any contract disputes, or documented performance deficiencies on previous DoD contracts would be necessary to identify specific risks relevant to this award. The sole-source nature of this award, combined with the CPFF structure, warrants heightened scrutiny of their performance and cost management.

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 PLUS FIXED FEE (U)

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: $7,376,018

Exercised Options: $7,376,018

Current Obligation: $6,310,564

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $890,490

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