DoD's $23.8M contract for ballistic missile defense systems awarded to UK Ministry of Defence raises questions on competition and value

Contract Overview

Contract Amount: $23,862,662 ($23.9M)

Contractor: Ministry of Defence

Awarding Agency: Department of Defense

Start Date: 2000-12-05

End Date: 2007-02-28

Contract Duration: 2,276 days

Daily Burn Rate: $10.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Defense

Official Description: 200106!000066!9700!ZD60 !BALLISTIC MISSILE DEFENSE ORG. !HQ000601C0002 !A!N!*!N! !20001205!20051204!232112144!232112144!227103777!N!MINISTRY OF DEFENCE !NORTHUMBERLAND HOUSE !LONDON !UK!WC2N !* !* !UK!* !* !UNITED KIN!+000000471000!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !1CAA!BALLISTIC MISSILE DEFENSE SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !D !U!S!1!001!N!1G!Z!W!Z!B !UK!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Plain-Language Summary

Department of Defense obligated $23.9 million to MINISTRY OF DEFENCE for work described as: 200106!000066!9700!ZD60 !BALLISTIC MISSILE DEFENSE ORG. !HQ000601C0002 !A!N!*!N! !20001205!20051204!232112144!232112144!227103777!N!MINISTRY OF DEFENCE !NORTHUMBERLAND HOUSE !LONDON !UK!WC2N !* !* !UK!* !* … Key points: 1. Contract awarded to a foreign government entity, raising questions about standard procurement practices and potential for better value through open competition. 2. The 'Not Competed' award suggests a lack of market research or a specific justification for sole-sourcing, potentially limiting price discovery. 3. The contract duration of over 2200 days indicates a long-term commitment, requiring careful monitoring of performance and cost overruns. 4. Awarded under 'International Affairs', the contract's strategic purpose needs further clarification to assess its alignment with broader defense objectives. 5. The absence of small business participation raises concerns about equitable distribution of federal contracting opportunities.

Value Assessment

Rating: questionable

The contract's value is difficult to benchmark due to its unique nature, being awarded to a foreign government entity for ballistic missile defense systems. Without comparable contracts or clear performance metrics, assessing the 'value for money' is challenging. The pricing structure and justification for the $23.8 million award require deeper scrutiny, especially given the lack of competitive bidding which typically drives down costs. Further analysis is needed to determine if this represents a fair market price or if alternative, more cost-effective solutions were overlooked.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'Not Competed' basis, indicating that the Department of Defense did not solicit bids from multiple vendors. The specific justification for this sole-source award is not detailed in the provided data. A lack of competition typically limits price discovery and may result in higher costs for the government compared to an open solicitation process. It is unclear if alternative vendors or solutions were considered.

Taxpayer Impact: The absence of competition means taxpayers may not have received the benefit of a lower price that could have been achieved through a bidding process. This also limits transparency in how federal funds are being allocated for critical defense systems.

Public Impact

The primary beneficiary appears to be the UK Ministry of Defence, receiving a significant contract for defense systems. The services delivered are related to ballistic missile defense systems, contributing to national security capabilities. The geographic impact is primarily focused on the United Kingdom, where the contractor is based and likely where some services will be performed. Workforce implications are likely concentrated within the UK defense sector, potentially involving specialized engineers and technical personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and missed opportunities for innovation from a broader vendor pool.
Awarding to a foreign government entity may introduce complexities in oversight, communication, and adherence to US procurement standards.
The long contract duration (over 6 years) increases the risk of cost escalation and performance degradation without robust monitoring.
The specific nature of 'ballistic missile defense systems' suggests a high-stakes procurement where thorough vetting and justification are paramount.
Absence of small business participation indicates a missed opportunity to leverage the agility and innovation of smaller defense contractors.

Positive Signals

The contract addresses a critical national security need in ballistic missile defense, indicating strategic importance.
The award to a known entity (UK Ministry of Defence) might imply a pre-existing relationship or specialized capability.
The contract is categorized under 'RDTE/OTHER DEFENSE-ADV TECH DEV', suggesting investment in advanced technological development.

Sector Analysis

This contract falls within the broader Defense sector, specifically focusing on advanced technology development for missile defense systems. The global market for defense technology, particularly missile defense, is highly specialized and involves significant R&D investment. Comparable spending benchmarks are difficult to establish without knowing the specific system and its technological maturity. However, the trend in defense spending often leans towards sole-source or limited competition for highly specialized, critical systems where only a few entities possess the requisite expertise.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them. The award to a foreign government entity further suggests that small business participation was likely not a primary consideration in the procurement strategy. This represents a missed opportunity to engage the small business defense industrial base, which often brings innovation and specialized capabilities to government contracts.

Oversight & Accountability

Oversight mechanisms for this contract are not explicitly detailed in the provided data. However, as a Department of Defense contract, it would typically fall under the purview of the Department of Defense Inspector General for audits and investigations. Transparency is limited due to the sole-source nature and the foreign recipient. Accountability would hinge on the performance metrics and reporting requirements stipulated in the contract, which are not fully available here.

Related Government Programs

Missile Defense Systems
Advanced Technology Development
International Defense Cooperation
Foreign Military Sales (indirectly related)
Research, Development, Test, and Evaluation (RDT&E)

Risk Flags

Sole-source award without clear justification
Potential lack of competitive pricing
Award to foreign government entity requires enhanced oversight
Long contract duration increases risk of cost overruns
Limited transparency on specific capabilities and performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.9 million to MINISTRY OF DEFENCE. 200106!000066!9700!ZD60 !BALLISTIC MISSILE DEFENSE ORG. !HQ000601C0002 !A!N!*!N! !20001205!20051204!232112144!232112144!227103777!N!MINISTRY OF DEFENCE !NORTHUMBERLAND HOUSE !LONDON !UK!WC2N !* !* !UK!* !* !UNITED KIN!+000000471000!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !1CAA!BALLISTIC MISSILE DEFENSE SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is MINISTRY OF DEFENCE.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $23.9 million.

What is the period of performance?

Start: 2000-12-05. End: 2007-02-28.

What specific ballistic missile defense capabilities does this contract procure, and how do they align with current US defense strategy?

The contract data indicates the procurement is for 'BALLISTIC MISSILE DEFENSE SYS' under the 'RDTE/OTHER DEFENSE-ADV TECH DEV' category. This suggests the contract likely supports research, development, testing, or advanced technological enhancement of systems designed to detect, track, and intercept ballistic missiles. The specific capabilities procured are not detailed, but they would align with the broader US defense strategy of countering missile threats from potential adversaries. The 'International Affairs' designation implies a cooperative element, possibly involving technology sharing or joint development with the UK Ministry of Defence, contributing to collective security objectives and interoperability.

Why was this contract awarded on a 'Not Competed' basis, and what was the justification for selecting the UK Ministry of Defence?

The 'Not Competed' status signifies that the Department of Defense did not conduct a full and open competition for this requirement. The specific justification for this sole-source award is not provided in the data. Common reasons for sole-sourcing include unique capabilities possessed by only one source, urgent and compelling needs, or specific international agreements. Awarding to the UK Ministry of Defence suggests a potential pre-existing relationship, unique expertise in a specific area of missile defense technology, or a strategic partnership where direct procurement from a governmental ally was deemed most appropriate or efficient, possibly bypassing standard commercial procurement routes.

How does the $23.8 million contract value compare to similar ballistic missile defense system procurements or R&D efforts?

Benchmarking the $23.8 million contract value is challenging without more specific details on the scope of work and the technological maturity of the systems involved. Ballistic missile defense R&D can range from relatively small, focused research projects to multi-billion dollar system development programs. Given this contract's duration of over 2200 days (approximately 6.2 years) and its R&D classification, the total value spread over this period might be considered moderate for advanced defense technology. However, without comparable data points for similar international collaborations or sole-sourced R&D contracts in this niche area, a definitive value assessment is difficult. It is crucial to understand if this represents a fair price for the unique capabilities or research being acquired.

What are the potential risks associated with awarding a significant defense contract to a foreign government entity?

Awarding a significant defense contract to a foreign government entity like the UK Ministry of Defence can introduce several risks. These may include complexities in contract administration, differing regulatory environments, potential delays due to communication barriers or differing operational tempos, and challenges in ensuring consistent adherence to US security protocols and quality standards. Furthermore, intellectual property rights and technology transfer agreements need careful management. While international cooperation is vital, sole-sourcing to a foreign government entity can also limit opportunities for US small businesses and potentially bypass more cost-effective solutions available within the domestic industrial base.

What is the historical spending pattern for ballistic missile defense systems by the Department of Defense, and how does this contract fit in?

The Department of Defense has historically allocated substantial funding towards ballistic missile defense (BMD) programs, reflecting the persistent threat landscape. Major programs like the Ground-based Midcourse Defense (GMD), Aegis BMD, and Terminal High Altitude Area Defense (THAAD) have seen billions invested over decades. This $23.8 million contract, categorized under R&D/Advanced Tech Development and awarded to the UK Ministry of Defence, appears to be a smaller, more focused initiative within the broader BMD portfolio. Its 'International Affairs' designation suggests it might be part of a cooperative research effort or aimed at acquiring specific, perhaps niche, technological advancements rather than a large-scale system deployment, fitting into the ongoing, multi-faceted approach to missile defense.

Industry Classification

NAICS: Public Administration › National Security and International Affairs › International Affairs

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

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE) (2)

Contractor Details

Address: NORTHUMBERLAND HOUSE, LONDON

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline