DoD awards $26.4M contract to BAE Systems for HMMWV MCTAGS, with no competition
Contract Overview
Contract Amount: $26,424,810 ($26.4M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2007-07-05
End Date: 2008-08-28
Contract Duration: 420 days
Daily Burn Rate: $62.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MCTAGS FOR HMMWV-USMC
Place of Performance
Location: SANTA CLARA, SANTA CLARA County, CALIFORNIA, 95050, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $26.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: MCTAGS FOR HMMWV-USMC Key points: 1. Contract awarded to BAE Systems for $26.4 million. 2. No competition was involved in this award. 3. The contract is for MCTAGS for HMMWV. 4. Awarded by the Department of the Navy. 5. The contract was awarded in 2007.
Value Assessment
Rating: questionable
The contract value of $26.4 million for MCTAGS for HMMWV appears high given the lack of competition and the relatively short duration of 420 days. Benchmarking against similar armored vehicle component contracts is difficult without more specific details.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive bidding process, impacting taxpayer value.
Public Impact
Military readiness may be impacted if essential equipment like MCTAGS is not procured at the best possible price. Taxpayers may have overpaid due to the absence of competitive bidding. The Department of the Navy's procurement process for this item raises questions about efficiency and cost-effectiveness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Sole-source award
Positive Signals
- Specific equipment procured
- Awarded to established contractor
Sector Analysis
This contract falls under the Defense sector, specifically military vehicle manufacturing. Spending in this sector is often characterized by high costs due to specialized technology and limited suppliers, making competition crucial for cost control.
Small Business Impact
The contract was awarded to BAE Systems Land & Armaments L.P., a large defense contractor. There is no indication that small businesses were involved in this specific award, either as prime contractors or subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the price paid was fair and reasonable, and to understand why competition was not pursued.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Limited transparency
- No small business participation indicated
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, ca, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. MCTAGS FOR HMMWV-USMC
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 $26.4 million.
What is the period of performance?
Start: 2007-07-05. End: 2008-08-28.
What was the justification for not competing this contract, and was a full and open competition truly not feasible?
The provided data indicates the contract was 'NOT COMPETED'. Without further documentation, the specific justification remains unknown. Typically, sole-source awards require a documented justification, such as a unique capability or urgent need. The feasibility of full and open competition would depend on market research and the availability of multiple qualified sources for MCTAGS for HMMWV.
How does the $26.4 million cost compare to the expected value for similar HMMWV upgrades or components, considering the 420-day duration?
Benchmarking the $26.4 million cost against similar HMMWV upgrades or components is challenging without more detailed specifications of the MCTAGS and the scope of work. The 420-day duration suggests a focused effort. However, given the lack of competition, it is difficult to ascertain if this price represents fair market value or if it is inflated due to the absence of competitive pressure.
What is the long-term strategic impact of awarding such contracts without competition on the overall cost-effectiveness of military vehicle modernization?
Consistently awarding contracts without competition can lead to a decline in cost-effectiveness over the long term. It reduces the incentive for contractors to innovate and offer competitive pricing. This can result in higher overall modernization costs for the military, potentially diverting funds from other critical areas or requiring larger overall budgets.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 2890 DE LA CRUZ BLVD, SANTA CLARA, CA, 95050
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,424,810
Exercised Options: $26,424,810
Current Obligation: $26,424,810
Contract Characteristics
Consolidated Contract: Yes
Cost or Pricing Data: NO
Timeline
Start Date: 2007-07-05
Current End Date: 2008-08-28
Potential End Date: 2008-08-28 00:00:00
Last Modified: 2015-04-22
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