DoD's $59.7M BAE Systems contract for aircraft parts awarded via sole-source justification

Contract Overview

Contract Amount: $59,754,184 ($59.8M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-08-01

End Date: 2027-11-01

Contract Duration: 1,187 days

Daily Burn Rate: $50.3K/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 $59.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: BIG SAFARI Key points: 1. Contract awarded to a single vendor, raising questions about competitive pricing. 2. Long performance period of nearly four years suggests a sustained need for these parts. 3. The contract's value is significant, warranting scrutiny of cost-effectiveness. 4. Lack of competition may limit opportunities for other suppliers and innovation. 5. The specific aircraft parts are crucial for maintaining Air Force readiness. 6. Fixed-price contract type aims to control costs, but without competition, this is less certain.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money on this $59.7 million contract. The fixed-price nature provides some cost control, but the absence of competing offers means the government cannot be assured it secured the best possible price. Comparisons to similar sole-source contracts for specialized aircraft components would be necessary to assess if the pricing is within a reasonable range, but such data is often proprietary or not publicly available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. The data indicates only one vendor, BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC., was considered. This approach is typically used when only one source can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs where competition is not feasible. The lack of multiple bidders means there was no price discovery through market competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage that competition provides. It also limits the opportunity for other businesses to secure government contracts.

Public Impact

The primary beneficiary is the Department of the Air Force, ensuring the availability of critical aircraft parts. Services delivered include the manufacturing and supply of specialized aircraft components. The geographic impact is primarily within the United States, supporting Air Force operations nationwide. Workforce implications may include sustained employment at BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Long contract duration without competitive re-evaluation could lead to price creep.
Dependence on a single supplier for critical aircraft parts poses a supply chain risk.

Positive Signals

Fixed-price contract type helps to cap costs for the government.
BAE Systems is an established defense contractor with a track record.
The contract supports critical Air Force operational needs and readiness.

Sector Analysis

This contract falls within the "Other Aircraft Parts and Auxiliary Equipment Manufacturing" sector, a critical component of the broader aerospace and defense industry. The market for specialized aircraft parts is often characterized by high barriers to entry due to technical expertise, certifications, and intellectual property. Spending in this sector is driven by military modernization, sustainment of existing fleets, and technological advancements. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition contracts for similar high-value, specialized components within the defense sector.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb: false'. There is also no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, BAE Systems, will likely fulfill the contract requirements directly or through its own established supply chain, potentially limiting opportunities for small businesses to participate in this specific award.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures are inherent in the contract terms, particularly the fixed-price structure. Transparency is limited due to the sole-source nature of the award and the proprietary aspects of defense manufacturing. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency Contracts
Air Force Sustainment Programs
BAE Systems Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.8 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 $59.8 million.

What is the period of performance?

Start: 2024-08-01. End: 2027-11-01.

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

BAE Systems is a major global defense contractor with a significant history of supplying various systems and components to the Department of Defense. For aircraft parts specifically, the company has a substantial portfolio, often involving complex and specialized equipment. While this particular contract is a sole-source award, BAE Systems has likely held numerous other contracts, both competitive and non-competitive, for aircraft components, avionics, and related services across different branches of the military. A detailed review of their past performance, including any past performance evaluations or disputes, would be necessary to fully assess their reliability and capability for this specific requirement. Their extensive experience suggests a strong understanding of military specifications and operational demands.

How does the $59.7 million value compare to typical spending on specialized aircraft parts by the Air Force?

The $59.7 million value for this contract is substantial, but its comparability depends heavily on the specific type and quantity of aircraft parts being procured. Specialized components for advanced military aircraft, such as engines, avionics, or structural elements, can be extremely expensive due to their complexity, precision engineering, and stringent quality requirements. The Air Force procures a vast array of parts, ranging from low-cost consumables to high-value, long-lead-time items. Without knowing the exact nature of the 'Other Aircraft Parts and Auxiliary Equipment' covered by this contract, it's challenging to benchmark against typical spending. However, for critical, sole-sourced components for a fleet, this figure could be within the expected range, though it underscores the importance of ensuring the justification for sole-source procurement is robust.

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

The primary risks associated with a sole-source award for critical aircraft parts include potential overpayment due to a lack of price competition, reduced incentive for the contractor to innovate or improve efficiency, and increased vulnerability in the supply chain. If BAE Systems were to experience production issues, financial instability, or geopolitical disruptions, the Air Force would have limited alternative sources to turn to, potentially impacting aircraft readiness. Furthermore, the absence of competitive pressure might lead to less rigorous quality control or slower delivery times over the contract's duration. Ensuring robust contract oversight and performance metrics becomes even more critical in sole-source situations.

What does the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code (336413) typically encompass in defense spending?

The NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' encompasses establishments primarily engaged in manufacturing aircraft parts and auxiliary equipment, not elsewhere classified. This can include a wide range of components such as landing gear, aircraft lighting systems, aircraft seating, aircraft armament, and various other specialized parts and accessories. In the context of defense spending, this code often relates to the sustainment and modernization of military aircraft fleets, covering both new production and replacement parts. Contracts under this code can vary significantly in value and complexity, depending on the specific equipment and the scale of production required by the military branch.

What is the significance of the contract type being 'FIRM FIXED PRICE' in this sole-source context?

A 'FIRM FIXED PRICE' (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience. In a competitive environment, FFP incentivizes the contractor to control costs efficiently to maximize profit. However, in a sole-source scenario like this one, the benefit of FFP is primarily that it caps the government's financial liability at the agreed-upon price. It shifts the risk of cost overruns entirely to the contractor. While this protects the government from unexpected cost increases, it does not guarantee that the initial price was the most economical one achievable, as there was no competitive pressure to drive it down. The government still relies on its negotiation skills and market research (if available) to set a fair initial price.

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: $59,754,184

Exercised Options: $59,754,184

Current Obligation: $59,754,184

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $20,557,635

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862021G4028

IDV Type: BOA

Timeline