DoD awards $19.8M for gun port shield assemblies, with BAE Systems as sole contractor

Contract Overview

Contract Amount: $19,858,300 ($19.9M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2017-02-23

End Date: 2026-09-30

Contract Duration: 3,506 days

Daily Burn Rate: $5.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: GUN PORT SHIELD ASSEMBLY, 2527009

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40214

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $19.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: GUN PORT SHIELD ASSEMBLY, 2527009 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of over 3,500 days suggests a sustained need. 3. Cost-plus-fixed-fee contract type may incentivize cost overruns. 4. No small business set-aside indicates potential missed opportunities for smaller firms. 5. The contract is for a specialized defense component, indicating a niche market. 6. Geographic location in Kentucky for manufacturing is noted.

Value Assessment

Rating: questionable

Benchmarking the value for this specific 'GUN PORT SHIELD ASSEMBLY' is challenging without comparable contract data. The cost-plus-fixed-fee (CPFF) structure, while common for R&D or uncertain scope projects, can lead to higher overall costs compared to fixed-price contracts if not managed tightly. The absence of competition further complicates a direct value assessment, as there's no market pressure to drive down prices. The total value of $19.8 million over the contract's life, while substantial, needs to be evaluated against the specific technical requirements and the criticality of the component.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the unique capabilities, technology, or proprietary information required for the product or service. The lack of competition means that the Department of the Navy did not benefit from the price discovery and potential cost savings that a competitive bidding process could have provided.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less assurance that the price reflects the lowest reasonable cost for the required shield assemblies.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, ensuring the availability of critical protective equipment for naval platforms. The contract delivers essential components for weapon systems, contributing to the operational readiness and safety of military personnel. Manufacturing is concentrated in Kentucky, potentially supporting local employment and the regional defense industrial base. The contract supports the specialized manufacturing sector within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Cost-plus-fixed-fee contract type carries inherent risks of cost escalation if not rigorously managed.
Lack of small business participation may limit opportunities for smaller, innovative firms in this defense niche.

Positive Signals

Ensures a critical defense component is manufactured by a known entity, BAE Systems, which has a track record in defense contracting.
Long-term contract provides stability for production and supply chain management for a specialized item.
Manufacturing in Kentucky supports domestic industrial capacity and potentially local jobs.

Sector Analysis

The defense manufacturing sector is characterized by high barriers to entry, specialized technical requirements, and significant government oversight. Contracts for components like gun port shield assemblies fall under the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' industry code (NAICS 332994). This niche requires specific expertise and adherence to stringent military specifications. Spending in this area is driven by defense readiness needs and modernization programs. Comparable spending benchmarks are difficult to establish due to the specialized nature of the product and the sole-source award.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of subcontracting goals for small businesses. The award to BAE Systems, a large defense contractor, suggests that the primary manufacturing will be handled by a major player. This could mean missed opportunities for small businesses that specialize in metal fabrication or ordnance components to participate in the defense supply chain and potentially offer competitive pricing or innovative solutions.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Given the sole-source nature and CPFF structure, rigorous oversight of cost, performance, and schedule is crucial to ensure value for money. The Defense Contract Audit Agency (DCAA) and potentially the Department of Defense Inspector General (IG) would have jurisdiction to audit costs and investigate any potential fraud, waste, or abuse, particularly concerning the 'cost plus' elements of the contract.

Related Government Programs

Naval Ship Systems
Ordnance Manufacturing
Defense Procurement
Weapon System Components
BAE Systems Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. GUN PORT SHIELD ASSEMBLY, 2527009

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $19.9 million.

What is the period of performance?

Start: 2017-02-23. End: 2026-09-30.

What is the historical spending pattern for 'GUN PORT SHIELD ASSEMBLY' by the Department of the Navy?

Historical spending data for this specific item, 'GUN PORT SHIELD ASSEMBLY,' is not readily available in public databases without further detailed contract searching. However, the current award of $19.8 million suggests a significant, long-term requirement. The Department of the Navy procures a vast array of components for its fleet, and spending on specialized parts like shield assemblies is part of its overall sustainment and modernization budget. Analyzing past awards for similar components or for BAE Systems' work on naval ordnance could provide context, but direct historical spending on this exact item would require deeper access to procurement records or specific contract history reports.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar defense components?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not well-defined, involves significant research and development, or requires specialized expertise that limits competition. In this case, it means the contractor (BAE Systems) is reimbursed for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF generally offers less incentive for the contractor to control costs, as the government bears most of the cost risk. However, for highly specialized or uncertain projects, it can ensure that the necessary work is completed by allowing for flexibility. Other types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives, while FFP provides the most cost certainty for the buyer if the scope is clear.

What are the potential risks associated with a sole-source award for defense components?

Sole-source awards, like this one for the 'GUN PORT SHIELD ASSEMBLY,' carry several risks. The primary risk is the lack of price competition, which can lead to higher costs for the government and taxpayers compared to what might be achieved in a competitive environment. Without competing bids, there's less market pressure to drive innovation or efficiency. Furthermore, sole-source contracts can create vendor lock-in, making it difficult or costly to switch suppliers in the future. There's also a potential risk of complacency from the sole provider, as they face no direct competitive threat. Robust oversight and negotiation are critical to mitigate these risks.

What is BAE Systems' track record with the Department of the Navy for similar defense articles?

BAE Systems Land & Armaments L.P. is a major defense contractor with a substantial history of supplying various systems and components to the Department of the Navy and other military branches. They are known for producing a wide range of armored vehicles, naval guns, munitions, and other defense equipment. While specific details on their past performance for 'GUN PORT SHIELD ASSEMBLY' are not provided here, their extensive experience in ordnance and naval systems suggests they possess the technical capabilities and manufacturing infrastructure required for this contract. Performance reviews and past contract data would be necessary for a comprehensive assessment of their track record.

What is the estimated total value of this contract and how does it compare to typical defense component procurements?

The total estimated value of this contract is $19,858,300.02, spanning from February 23, 2017, to September 30, 2026, a period of over 9 years. This value is substantial for a single component, reflecting its critical nature and potentially complex manufacturing process. Comparing this to 'typical' defense component procurements is difficult without defining 'typical.' However, for specialized, long-lifecycle components integral to major defense platforms, values in the tens of millions over several years are not uncommon. The sole-source nature and CPFF structure might inflate this figure compared to a competitively bid, fixed-price contract for a similar item, but it ensures supply continuity for a critical defense need.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

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: Compagnie DE Developpement DE L'eau S.A.

Address: 163 ROCHESTER DR STE 1, LOUISVILLE, KY, 40214

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

Financial Breakdown

Contract Ceiling: $20,610,398

Exercised Options: $20,610,398

Current Obligation: $19,858,300

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $2,196,714

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002413G5331

IDV Type: BOA

Timeline