DoD awards $43.5M for aircraft parts, with BAE Systems as sole provider

Contract Overview

Contract Amount: $43,492,582 ($43.5M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-11-01

End Date: 2027-04-30

Contract Duration: 910 days

Daily Burn Rate: $47.8K/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: WACO, MCLENNAN County, TEXAS, 76705

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $43.5 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. Limited competition suggests potential risks to achieving best value for taxpayer dollars. 3. The contract duration of 910 days indicates a need for sustained supply of critical aircraft components. 4. The award falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, a sector with significant defense spending. 5. Performance is located in Texas, a state with a strong aerospace and defense industrial base.

Value Assessment

Rating: questionable

Given the sole-source nature of this award, a direct comparison to similar contracts is challenging. Without competitive bidding, it is difficult to ascertain if the pricing reflects fair market value. The benchmark of $47,794 for the base award suggests a need for further scrutiny to ensure cost-effectiveness over the contract's life.

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 lack of competition limits the government's ability to explore alternative solutions or negotiate more favorable terms. The absence of multiple bidders prevents a robust price discovery process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the selected contractor faces no competitive pressure to offer the lowest possible price.

Public Impact

The Department of the Air Force benefits from the sustained supply of critical aircraft parts. This contract ensures the continued operational readiness of Air Force aircraft. The primary services delivered are the manufacturing and supply of specialized aircraft components. The geographic impact is concentrated in Texas, supporting the state's defense manufacturing sector and associated workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Lack of transparency in pricing due to no competitive bidding.
Reliance on a single contractor for critical components could pose supply chain risks.

Positive Signals

BAE Systems is an established defense contractor with a track record.
The contract duration suggests a stable, long-term need for these parts.
Awarding to an existing supplier may leverage existing infrastructure and expertise.

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the aerospace and defense industry. The U.S. defense industrial base relies heavily on specialized manufacturers like BAE Systems to maintain aircraft fleets. Spending in this sector is often characterized by long production cycles and high technical requirements, making competition complex. Benchmarking against similar sole-source awards for specialized aircraft components would be necessary for a comprehensive value assessment.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature, there is no indication of subcontracting opportunities for small businesses within this specific award. The impact on the small business ecosystem is likely minimal unless BAE Systems voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined by the contract terms and conditions, including performance standards and delivery schedules. Transparency may be limited due to the sole-source nature, but contract award data is publicly available through federal procurement databases.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics
Aerospace Components
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.5 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 $43.5 million.

What is the period of performance?

Start: 2024-11-01. End: 2027-04-30.

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

BAE Systems Information and Electronic Systems Integration Inc. has a substantial history of contracting with the Department of Defense, including for aircraft components and electronic systems. Analyzing their past performance on similar sole-source or competitively awarded contracts can provide insights into their reliability, quality, and pricing consistency. Reviewing contract databases for previous awards to BAE Systems within the 'Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code would reveal the volume and nature of their prior work. This historical data is crucial for assessing their capability to fulfill the current requirement and for benchmarking the value of this specific award against their own past performance.

How does the awarded price compare to industry benchmarks for similar aircraft parts, especially given the sole-source nature?

Benchmarking the awarded price of $47,794 (base award) for this contract is challenging due to its sole-source designation. Without competitive bids, there is no direct market validation of the price. To assess value, one would need to compare this figure against historical pricing for comparable parts supplied by BAE Systems or other manufacturers on competitively awarded contracts, if available. Industry reports on aircraft parts manufacturing costs, material price indices, and labor rates can also serve as indirect benchmarks. The lack of competition inherently limits the ability to determine if the price represents the best possible value for the government and taxpayers.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated prices and reduced innovation. Taxpayers may end up paying more than necessary for the required aircraft parts. Another significant risk is the potential for the contractor to become complacent regarding quality or delivery schedules, as there is no immediate alternative supplier. Furthermore, reliance on a single source can create supply chain vulnerabilities; if BAE Systems faces production issues or disruptions, the Air Force's operational readiness could be directly impacted. The government also loses the opportunity to discover potentially more cost-effective or technologically superior solutions that might have emerged from a competitive bidding process.

What is the expected impact of this contract on the operational readiness of Air Force aircraft?

This contract is expected to positively impact the operational readiness of Air Force aircraft by ensuring a consistent and reliable supply of critical parts. The duration of the contract (910 days) suggests that these components are essential for ongoing maintenance, repair, and operational sustainment activities. By securing these parts through BAE Systems, the Air Force aims to prevent potential grounding of aircraft due to component shortages, thereby maintaining fleet availability and mission capability. The timely delivery of these parts directly supports the Air Force's ability to execute its diverse missions effectively.

How does this contract's value compare to the total federal spending on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' in recent years?

The $43.5 million awarded to BAE Systems represents a specific instance of federal spending within the broader 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. To contextualize this value, one would examine total federal obligations for this NAICS code over the past several fiscal years. For example, if total annual spending in this category averages $500 million to $1 billion, this $43.5 million award would constitute a moderate portion of that total. However, if the average is significantly lower, this award could represent a substantial investment. Understanding the overall market size and historical spending trends is crucial for assessing whether this contract is an outlier or typical for the sector.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: $43,492,582

Exercised Options: $43,492,582

Current Obligation: $43,492,582

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862021G4028

IDV Type: BOA

Timeline