DoD's $14.45M RAD contract to BAE Systems for R&D shows strong competition and potential for innovation

Contract Overview

Contract Amount: $14,451,475 ($14.5M)

Contractor: BAE Systems Space & Mission Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2021-08-24

End Date: 2026-05-22

Contract Duration: 1,732 days

Daily Burn Rate: $8.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESILIENT AVIONICS DEVELOPMENT (RAD)

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $14.5 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC. for work described as: RESILIENT AVIONICS DEVELOPMENT (RAD) Key points: 1. Contract awarded under full and open competition, suggesting a robust market for avionics development. 2. The research and development focus indicates investment in future technological capabilities. 3. BAE Systems, a major defense contractor, brings significant experience to this specialized area. 4. The contract duration of nearly five years allows for substantial development and testing. 5. The cost-plus-fixed-fee structure incentivizes efficient cost management while ensuring mission completion. 6. This award represents a strategic investment in advancing aerospace technology for national security.

Value Assessment

Rating: good

The contract's value of $14.45 million for research and development in advanced avionics appears reasonable given the specialized nature of the work and the contractor's expertise. Benchmarking against similar R&D contracts in the aerospace sector would provide further context, but the fixed-fee component suggests an effort to control costs. The duration of the contract also allows for a phased approach to development, potentially optimizing resource allocation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. This competitive process is expected to drive innovation and ensure that the government receives the best value. The presence of multiple bidders suggests a healthy market for resilient avionics development services.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing and a wider array of innovative solutions for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, who will receive advanced avionics systems. This contract supports the development of cutting-edge research and development in physical and engineering sciences. The geographic impact is primarily centered around BAE Systems' operations, likely in Colorado, contributing to the local tech economy. The contract will likely involve a skilled workforce of engineers and researchers, fostering expertise in advanced avionics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not closely monitored.
Reliance on a single large contractor may limit future competition for follow-on work.
The long duration could lead to technology obsolescence if development timelines are not managed effectively.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
BAE Systems is a reputable contractor with a strong track record in defense systems.
The contract focuses on R&D, which is crucial for maintaining technological superiority.
The fixed-fee component provides some cost control for the government.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The aerospace and defense industry is characterized by high R&D investment to maintain a technological edge. Comparable spending benchmarks for advanced avionics R&D can vary significantly based on the complexity and scope of the technology being developed, but this $14.45 million award represents a substantial investment in a critical capability.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor is BAE Systems, a large corporation. There is no explicit information regarding subcontracting plans for small businesses. Without specific subcontracting goals, the direct impact on the small business ecosystem for this particular contract is likely limited, though BAE Systems may engage small businesses as part of its supply chain.

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 embedded in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is typically maintained through contract reporting systems, though specific details of the R&D progress may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Avionics Systems Development
Aerospace Research and Development
Department of Defense Research Contracts
Air Force Technology Modernization Programs

Risk Flags

Cost Overrun Risk (CPFF Structure)
Technology Obsolescence Risk (Long Duration R&D)
Contractor Performance Risk (Requires ongoing monitoring)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.5 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC.. RESILIENT AVIONICS DEVELOPMENT (RAD)

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS SPACE & MISSION SYSTEMS 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 $14.5 million.

What is the period of performance?

Start: 2021-08-24. End: 2026-05-22.

What is BAE Systems' track record with similar R&D contracts for the Department of Defense?

BAE Systems has a long and extensive history of performing research and development contracts for the Department of Defense across various domains, including aerospace, electronics, and C4ISR systems. They are a major defense contractor with significant experience in complex R&D projects. While specific details on past performance for 'Resilient Avionics Development' are not provided here, their overall portfolio suggests a strong capability to handle such advanced technological endeavors. Past performance evaluations are typically a key factor in the source selection process for competitive procurements like this one, indicating that BAE Systems likely demonstrated a satisfactory or better record to be awarded this contract.

How does the $14.45 million value compare to similar R&D efforts in advanced avionics?

The $14.45 million value for the Resilient Avionics Development (RAD) contract is a moderate investment for a research and development project in advanced avionics. The cost-plus-fixed-fee (CPFF) contract type suggests that the final cost could fluctuate based on actual expenses incurred, but the fixed fee provides a baseline profit for the contractor. Benchmarking this against other R&D contracts requires access to detailed contract databases and specific project scopes. However, considering the complexity and specialized nature of developing resilient avionics, which often involves cutting-edge materials, software, and integration, this funding level appears aligned with industry norms for focused, multi-year R&D initiatives aimed at technological advancement rather than full-scale production.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, like the RAD contract, revolve around cost control and potential overruns. While the fixed fee provides the contractor with a defined profit margin, the government bears the risk of actual allowable costs exceeding initial estimates. This necessitates robust oversight and rigorous auditing by the government to ensure that all claimed costs are reasonable, allocable, and necessary for the R&D effort. Inadequate oversight could lead to inflated costs. Conversely, the CPFF structure can incentivize contractors to perform the work diligently to achieve the fixed fee, especially when coupled with performance incentives or clear milestones. For R&D, where the path to success is often uncertain, CPFF allows for flexibility in exploring different technical approaches without the contractor bearing the full financial risk of failure.

What does the 'Resilient Avionics Development' aim to achieve for the Air Force?

The 'Resilient Avionics Development' (RAD) program likely aims to enhance the survivability and operational effectiveness of aircraft avionics systems in contested or degraded environments. 'Resilience' in this context typically refers to the ability of systems to withstand or recover from disruptions, such as electronic warfare, cyber-attacks, jamming, or physical damage. For the Air Force, this could translate to avionics that maintain critical functions under duress, ensuring mission completion and pilot safety. Development efforts might focus on advanced signal processing, redundant architectures, hardened components, secure communication protocols, and adaptive software that can reconfigure in real-time to counter threats. The ultimate goal is to ensure that the aircraft's 'brain' and nervous system remain functional and reliable, even when facing sophisticated adversaries.

How does this contract fit into the broader landscape of Air Force modernization efforts?

This contract for Resilient Avionics Development (RAD) fits squarely within the Air Force's broader modernization efforts, particularly those focused on maintaining technological superiority in increasingly complex and contested operational environments. As adversaries develop more sophisticated electronic warfare and cyber capabilities, traditional avionics systems become more vulnerable. Investing in resilient avionics is crucial for ensuring the effectiveness of current and future platforms, from legacy aircraft upgrades to next-generation fighters and bombers. This R&D effort supports the Air Force's strategic goals of enhancing survivability, mission assurance, and operational flexibility, enabling aircrews to operate effectively across the full spectrum of conflict, including high-intensity scenarios where system resilience is paramount.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1600 COMMERCE ST UNIT 1, BOULDER, CO, 80301

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $24,621,726

Exercised Options: $24,621,726

Current Obligation: $14,451,475

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865021D1004

IDV Type: IDC

Timeline