DoD's $18M contract for aviation navigation system upgrades to BAE Systems raises questions on competition and value

Contract Overview

Contract Amount: $17,957,678 ($18.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2018-05-25

End Date: 2025-03-31

Contract Duration: 2,502 days

Daily Burn Rate: $7.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS TASK ORDER FOR PRODUCT MANAGER AVIATION MISSION EQUIPMENT (PM AME)IS TO STUDY, DESIGN, AND IMPLEMENT ELEMENTS OF A-PNT WITH THE AN/ASN-128D DOPPLER GLOBAL POSITION SYSTEM NAVIGATION SET (DGNS) FOR THE UH-60A/L PLATFORM, TO INCLUDE RESILIENCY AND SOFTWARE ASSURANCE MODIFICATION (RSAM)AND PROVIDE UPGRADES TO THE SUITE E AND SUITE 1 SOFTWARE BASELINES.

Place of Performance

Location: PICATINNY ARSENAL, MORRIS County, NEW JERSEY, 07806

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $18.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: THE PURPOSE OF THIS TASK ORDER FOR PRODUCT MANAGER AVIATION MISSION EQUIPMENT (PM AME)IS TO STUDY, DESIGN, AND IMPLEMENT ELEMENTS OF A-PNT WITH THE AN/ASN-128D DOPPLER GLOBAL POSITION SYSTEM NAVIGATION SET (DGNS) FOR THE UH-60A/L PLATFORM, TO INCLUDE RESILIENCY AND SOFTWARE ASSUR… Key points: 1. The contract focuses on enhancing aviation navigation systems for the UH-60A/L platform, including A-PNT integration and software updates. 2. A significant portion of the contract value is allocated to software assurance and modification, indicating a focus on system modernization. 3. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market engagement. 4. Performance is tied to specific software baselines (Suite E and Suite 1), suggesting a need for specialized expertise. 5. The contract duration of over two years implies a sustained effort in system development and implementation. 6. The absence of small business set-asides or subcontracting plans may limit opportunities for smaller firms in this specialized sector.

Value Assessment

Rating: questionable

The contract's value of approximately $18 million for system upgrades and modifications appears substantial. Without comparable sole-source contracts for similar aviation navigation system enhancements, it is difficult to benchmark the pricing effectively. The 'Cost Plus Fixed Fee' (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher costs compared to fixed-price contracts if not managed rigorously. Further analysis of the cost breakdown and labor rates would be necessary to definitively assess value for money.

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 approach bypasses the competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. The justification for a sole-source award is not provided, but it often stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competition among multiple bidders.

Public Impact

The primary beneficiaries are the U.S. Army aviation units operating the UH-60A/L Black Hawk helicopters, who will receive enhanced navigation capabilities. The contract delivers critical upgrades to the AN/ASN-128D Doppler Global Positioning System Navigation Set (DGNS), improving accuracy and reliability. Services include the study, design, and implementation of A-PNT (Anti-Poisoning/Anti-Tampering) features, enhancing system security and resilience. Software updates to Suite E and Suite 1 baselines will modernize the navigation systems, potentially improving operational effectiveness and safety. The contract is expected to support specialized engineering and technical roles within BAE Systems, contributing to the defense technology workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
CPFF contract type can incentivize higher spending if not closely monitored.
Lack of transparency regarding the justification for sole-source award.
No explicit mention of small business subcontracting goals.

Positive Signals

Focus on critical aviation safety and navigation system upgrades.
Integration of A-PNT features enhances system resilience and security.
Addresses modernization needs for established UH-60 platforms.
Long-term contract duration allows for thorough development and implementation.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511). This industry is characterized by high technological complexity and significant R&D investment, often serving defense and aerospace clients. The market is typically dominated by a few large prime contractors, with specialized subcontractors providing niche components or services. Spending in this sector is heavily influenced by defense budgets and modernization priorities.

Small Business Impact

The contract does not indicate any small business set-aside provisions, nor is there explicit mention of subcontracting goals for small businesses. Given the sole-source nature of the award and the specialized technical requirements, it is possible that opportunities for small businesses are limited. However, BAE Systems, as the prime contractor, may engage small businesses for specific components or services, but this is not a stated requirement of the contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, there may be heightened scrutiny from oversight bodies like the Government Accountability Office (GAO) if protests arise, or from the Department of Defense's Inspector General if performance or cost issues are identified. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review.

Related Government Programs

Army Aviation Modernization Programs
Avionics Systems Development
Navigation and Guidance Systems
Helicopter Upgrade Programs
A-PNT Technology Integration

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of competition transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. THE PURPOSE OF THIS TASK ORDER FOR PRODUCT MANAGER AVIATION MISSION EQUIPMENT (PM AME)IS TO STUDY, DESIGN, AND IMPLEMENT ELEMENTS OF A-PNT WITH THE AN/ASN-128D DOPPLER GLOBAL POSITION SYSTEM NAVIGATION SET (DGNS) FOR THE UH-60A/L PLATFORM, TO INCLUDE RESILIENCY AND SOFTWARE ASSURANCE MODIFICATION (RSAM)AND PROVIDE UPGRADES TO THE SUITE E AND SUITE 1 SOFTWARE BASELINES.

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 Army).

What is the total obligated amount?

The obligated amount is $18.0 million.

What is the period of performance?

Start: 2018-05-25. End: 2025-03-31.

What is the specific justification provided by the Department of the Army for awarding this contract on a sole-source basis to BAE Systems?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available to meet the government's needs. This could be due to proprietary technology, unique capabilities, urgent and compelling circumstances, or a lack of adequate competition. Without the official justification document, it is impossible to determine the precise rationale. However, the nature of advanced aviation systems and specialized software modifications often leads to situations where only a limited number of contractors possess the necessary expertise and security clearances.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type potentially impact the overall cost and value for money compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract type allows the contractor (BAE Systems) to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex projects where the scope is not fully defined at the outset, providing flexibility. However, it carries a risk of cost overruns, as the government bears the risk of actual costs exceeding estimates. The fixed fee provides some incentive for the contractor to control costs, but it may not be as strong as in fixed-price contracts. For taxpayers, this means the final cost is less predictable, and rigorous oversight is crucial to ensure costs remain reasonable and that the fee adequately compensates for the work performed without excessive profit.

What are the potential risks associated with the 'Resiliency and Software Assurance Modification' (RSAM) component of this contract?

The Resiliency and Software Assurance Modification (RSAM) component introduces several potential risks. Ensuring software resilience against cyber threats and ensuring its integrity (assurance) requires sophisticated development and rigorous testing. Risks include the possibility of undiscovered vulnerabilities in the modified software, which could compromise the navigation system's reliability or security. The complexity of integrating these modifications into existing aviation platforms like the UH-60A/L also presents technical challenges. Furthermore, the long-term effectiveness of these assurance measures against evolving threats needs continuous monitoring and potential updates, which could lead to future sustainment costs not fully captured in this initial contract.

What is the historical spending pattern for similar aviation navigation system upgrades within the Department of the Army or Department of Defense?

Historical spending on similar aviation navigation system upgrades within the Department of the Army and DoD is substantial but varies widely based on platform, scope, and technological advancements. Contracts for avionics modernization, including GPS integration, A-PNT capabilities, and software updates for platforms like the Black Hawk (UH-60), Apache (AH-64), or Chinook (CH-47), often range from several million to hundreds of millions of dollars over the life of a program. These upgrades are driven by the need to maintain technological superiority, enhance safety, and comply with evolving airspace regulations. Without specific data on comparable sole-source awards for similar RSAM and A-PNT integration on the UH-60, direct historical comparison is challenging, but the general trend indicates significant and ongoing investment in aviation system modernization.

What is BAE Systems' track record with the Department of Defense, particularly in delivering aviation electronics and navigation systems?

BAE Systems Information and Electronic Systems Integration Inc. has a significant and extensive track record with the Department of Defense, including the Department of the Army. They are a major defense contractor known for producing a wide array of electronic systems, including radar, electronic warfare systems, communication systems, and navigation and guidance equipment. They have been involved in numerous programs related to aircraft modernization and avionics. Their experience with complex defense contracts, including those involving software development and system integration for military platforms like helicopters, is well-established. While specific performance metrics for all past contracts are not detailed here, their continued role as a prime contractor suggests a generally satisfactory performance history with the DoD.

How does the contract's focus on A-PNT (Anti-Poisoning/Anti-Tampering) align with broader DoD initiatives for navigation system security?

The contract's focus on A-PNT (Anti-Poisoning/Anti-Tampering) aligns directly with broader Department of Defense initiatives aimed at enhancing the security and reliability of navigation systems. As GPS signals can be susceptible to jamming, spoofing, and interference, the DoD is heavily invested in developing and fielding Position, Navigation, and Timing (PNT) solutions that are more resilient and secure. A-PNT technologies are designed to detect and mitigate adversarial attempts to corrupt or deceive navigation systems. Integrating these capabilities into widely used platforms like the UH-60 is crucial for maintaining operational effectiveness in contested environments and reducing reliance on vulnerable GPS signals alone. This contract contributes to the DoD's strategic goal of ensuring assured PNT for its forces.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 164 TOTOWA RD, WAYNE, NJ, 07470

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: $18,121,668

Exercised Options: $18,121,668

Current Obligation: $17,957,678

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $900,202

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T13DE013

IDV Type: IDC

Timeline