DoD's $360M GPS Receiver Card Program Awarded to BAE Systems for Military User Equipment

Contract Overview

Contract Amount: $360,029,505 ($360.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2020-11-06

End Date: 2026-10-31

Contract Duration: 2,185 days

Daily Burn Rate: $164.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: GLOBAL POSITIONING SYSTEM MILITARY USERS EQUIPMENT MINIATURE SERIAL INTERFACE RECEIVER CARD PROGRAM WITH NEXT GENERATION APPLICATION SPECIFIC INTEGRATED CIRCUIT INCREMENT 2

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52404

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $360.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: GLOBAL POSITIONING SYSTEM MILITARY USERS EQUIPMENT MINIATURE SERIAL INTERFACE RECEIVER CARD PROGRAM WITH NEXT GENERATION APPLICATION SPECIFIC INTEGRATED CIRCUIT INCREMENT 2 Key points: 1. The contract aims to provide next-generation GPS capabilities for military users, enhancing navigation and targeting. 2. BAE Systems, a major defense contractor, secured this significant award, indicating strong performance or competitive positioning. 3. The use of a Cost Plus Incentive Fee (CPIF) contract suggests a focus on managing costs while incentivizing performance. 4. This program is critical for maintaining the technological edge of U.S. military operations reliant on precise positioning. 5. The contract duration of over 5 years points to a long-term commitment to upgrading essential military hardware. 6. The specific product, a miniature serial interface receiver card with advanced integrated circuits, highlights technological advancement in a niche area.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific cost breakdowns or comparable contract data for similar advanced GPS receiver cards. However, the total award of approximately $360 million over five years suggests a substantial investment in critical military technology. The CPIF contract type allows for cost adjustments based on performance, which can be a mechanism for achieving value if managed effectively. Further analysis would require comparing per-unit costs to industry standards for similar technological capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. The Department of the Air Force's decision to compete this broadly suggests a desire to leverage the market for the best technical solution and pricing. The number of bidders (4) is a healthy sign of competition for this specialized defense technology.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for the government's investment.

Public Impact

Military personnel relying on accurate navigation and targeting systems will benefit from enhanced GPS capabilities. The program delivers advanced receiver cards essential for the operation of various military platforms. The contract's impact is primarily national, supporting U.S. defense readiness and technological superiority. This contract supports a specialized segment of the defense electronics manufacturing workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPIF contract type can lead to cost overruns if not closely monitored and managed.
Reliance on a single contractor for a critical component could pose supply chain risks.
The specific nature of the technology may limit future competition if intellectual property becomes concentrated.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
BAE Systems is a well-established defense contractor with a track record in electronic systems.
The contract focuses on next-generation technology, indicating investment in future military capabilities.
The program duration allows for sustained development and deployment of critical equipment.

Sector Analysis

This contract falls within the defense electronics sector, specifically focusing on navigation and guidance systems. The market for military GPS receivers is characterized by high technological barriers to entry and significant government investment. Spending in this area is driven by the need for secure, precise, and jam-resistant positioning, navigation, and timing (PNT) capabilities across various military platforms. Comparable spending benchmarks would typically be found within broader defense procurement data for electronic warfare and communication systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem may be limited unless BAE Systems actively engages small businesses as subcontractors. Further investigation into subcontracting plans would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. The CPIF contract structure necessitates close monitoring of costs and performance against established targets. Transparency is typically maintained through contract reporting requirements and potential reviews by the Government Accountability Office (GAO) or the Department of Defense Inspector General (IG), particularly concerning cost and performance metrics.

Related Government Programs

Global Positioning System (GPS) Modernization Programs
Military Navigation and Guidance Systems
Defense Electronic Systems Manufacturing
Next Generation Application Specific Integrated Circuits (ASICs)

Risk Flags

Potential for cost overruns due to CPIF contract type.
Supply chain risks associated with specialized electronic components.
Technological obsolescence of advanced integrated circuits over the program's lifecycle.
Integration complexity of next-generation hardware with existing military systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $360.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. GLOBAL POSITIONING SYSTEM MILITARY USERS EQUIPMENT MINIATURE SERIAL INTERFACE RECEIVER CARD PROGRAM WITH NEXT GENERATION APPLICATION SPECIFIC INTEGRATED CIRCUIT INCREMENT 2

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 $360.0 million.

What is the period of performance?

Start: 2020-11-06. End: 2026-10-31.

What is the historical spending trend for similar GPS receiver card programs within the Department of Defense?

Analyzing historical spending trends for similar GPS receiver card programs requires access to detailed procurement databases. However, general trends in defense spending indicate a consistent investment in navigation and positioning technologies due to their critical role in military operations. Programs like the GPS III satellite program and various ground system upgrades demonstrate a long-term commitment. The move towards more advanced, integrated circuits, as seen in this contract, suggests an evolution from older, less capable receiver technologies. Without specific data on prior receiver card procurements, it's difficult to establish a precise trend, but the overall trajectory points towards increasing sophistication and integration in military GPS capabilities, likely accompanied by rising costs per unit due to technological advancements.

How does the per-unit cost of these GPS receiver cards compare to commercial off-the-shelf (COTS) alternatives?

Direct comparison of per-unit costs between this military-grade GPS receiver card and Commercial Off-the-Shelf (COTS) alternatives is complex. Military-grade equipment typically incorporates enhanced features such as radiation hardening, extended temperature range operation, higher shock and vibration resistance, and advanced security protocols (e.g., anti-jamming, anti-spoofing capabilities) that are absent in COTS products. These specialized requirements significantly increase development and manufacturing costs. While COTS GPS modules can be purchased for tens to a few hundred dollars, military-grade components like those specified in this contract, which likely include custom ASICs and rigorous testing, could cost thousands or tens of thousands of dollars per unit. The 'value' here lies not just in the GPS signal reception but in the assured performance and security in demanding operational environments.

What are the key performance indicators (KPIs) being incentivized under the Cost Plus Incentive Fee (CPIF) structure for this contract?

Under a Cost Plus Incentive Fee (CPIF) contract, the government and the contractor agree on a target cost, a target profit, and a fee-to-share ratio for cost savings or overruns. Specific Key Performance Indicators (KPIs) incentivized are not detailed in the provided data but are typically established during contract negotiation. For this GPS receiver card program, likely KPIs could include: delivery schedule adherence, achievement of specific technical performance metrics (e.g., accuracy, signal acquisition time, power consumption, resistance to interference), reliability rates (Mean Time Between Failures - MTBF), and successful integration testing with existing military platforms. The incentive structure would aim to reward BAE Systems for meeting or exceeding these targets, while sharing in any cost savings achieved below the target cost, or adjusting the fee if costs exceed the target.

What is BAE Systems' track record with similar GPS or navigation system contracts for the Department of Defense?

BAE Systems has a significant and established track record in providing electronic systems and components for the Department of Defense, including navigation and positioning technologies. The company is a major player in defense electronics, involved in various aspects from sensors and communication systems to electronic warfare and avionics. While specific details on their past GPS receiver card programs are not provided here, their broad experience in developing and manufacturing complex electronic hardware for military applications suggests a strong capability. They have been involved in numerous large-scale defense contracts, indicating experience with government procurement processes, quality control, and performance requirements typical of DoD programs. Their consistent presence as a prime contractor on substantial defense awards underscores their capacity to handle programs of this magnitude and technological complexity.

What are the potential risks associated with the 'Next Generation Application Specific Integrated Circuit Increment 2' component of this contract?

The 'Next Generation Application Specific Integrated Circuit Increment 2' (ASIC Inc 2) represents advanced, potentially custom-designed silicon. Risks associated with such components include: 1) Development Complexity: Designing and fabricating cutting-edge ASICs is inherently complex and prone to technical challenges, potentially leading to schedule delays or performance shortfalls. 2) Manufacturing Yields: Initial production runs of new ASICs can sometimes have lower-than-expected yields, impacting delivery timelines and per-unit costs. 3) Obsolescence: Rapid advancements in semiconductor technology mean that even 'next-generation' components can face obsolescence risks over the long lifecycle of military equipment. 4) Supply Chain Vulnerability: Reliance on specialized foundries or limited suppliers for fabrication can create supply chain vulnerabilities. 5) Integration Challenges: Ensuring the ASIC functions seamlessly with other system components requires extensive testing and validation.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 7825 6TH ST SW, CEDAR RAPIDS, IA, 52404

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

Financial Breakdown

Contract Ceiling: $433,294,532

Exercised Options: $433,294,532

Current Obligation: $360,029,505

Actual Outlays: $232,516

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline