DoD Awards $80.1M BAE Systems Contract for 23 Armored Vehicles to Brazil
Contract Overview
Contract Amount: $80,111,364 ($80.1M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2015-12-18
End Date: 2020-06-15
Contract Duration: 1,641 days
Daily Burn Rate: $48.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FMS BUY OF 23 AAVS FOR BRAZIL - IGF::OT::IGF
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $80.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: FMS BUY OF 23 AAVS FOR BRAZIL - IGF::OT::IGF Key points: 1. Contract awarded to BAE Systems Land & Armaments L.P. for $80.1 million. 2. The contract is for 23 Armored Amphibious Vehicles (AAVs) for Brazil. 3. This is a definitive contract with a firm fixed price. 4. The contract duration is 1641 days, ending June 15, 2020.
Value Assessment
Rating: fair
The contract value of $80.1 million for 23 AAVs suggests a per-unit cost of approximately $3.48 million. Without specific benchmarks for advanced military vehicles of this type, it's difficult to definitively assess pricing, but it appears within a plausible range for specialized defense equipment.
Cost Per Unit: $3,482,233
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a limited source selection. This likely impacts price discovery as there was no competitive bidding process to drive down costs. The specific reasons for the limited competition are not detailed.
Taxpayer Impact: Taxpayer funds are being used for a foreign military sale, impacting the overall defense budget and potentially reducing funds available for domestic defense needs.
Public Impact
This contract supports U.S. foreign military sales objectives by providing advanced defense equipment to an allied nation. The procurement of specialized armored vehicles can enhance the defense capabilities of Brazil. The contract involves significant financial outlay, impacting the defense budget and resource allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs.
- Foreign military sales can be complex and carry geopolitical risks.
- Contract duration is substantial, requiring long-term oversight.
Positive Signals
- Supports U.S. foreign policy and defense cooperation.
- Procurement of advanced military hardware.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This contract falls within the Defense sector, specifically military vehicle manufacturing. Spending in this area is often characterized by high unit costs due to advanced technology, research and development, and specialized production. Benchmarks are highly dependent on the specific type and capabilities of the equipment.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded directly to BAE Systems Land & Armaments L.P. Further analysis would be needed to determine if any subcontracting opportunities exist for small businesses.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contract compliance and performance. Oversight is crucial given the significant value and duration of the contract.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns due to limited competition
- Geopolitical risks associated with foreign military sales
- Long contract duration requires sustained oversight
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, pa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $80.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. FMS BUY OF 23 AAVS FOR BRAZIL - IGF::OT::IGF
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $80.1 million.
What is the period of performance?
Start: 2015-12-18. End: 2020-06-15.
What is the justification for awarding this contract on a limited competition basis, and what specific capabilities do these 23 AAVs provide to Brazil that warrant this approach?
The justification for limited competition is not provided in the data. Typically, such decisions are based on factors like unique capabilities, urgent need, or sole-source provider status. Understanding the specific role and operational requirements these AAVs will fulfill for Brazil's defense forces would clarify the necessity of this procurement method and its potential impact on achieving strategic foreign policy objectives.
How does the per-unit cost of these AAVs compare to similar military vehicles procured by other nations or through competitive bidding processes, and what are the potential cost savings if competition
The per-unit cost is approximately $3.48 million. Without access to detailed cost breakdowns or comparative data on similar advanced armored vehicles procured competitively, a precise comparison is challenging. However, competitive processes generally yield lower prices. If competition had been feasible, potential savings could range from 10-30%, depending on the market and the number of bidders.
What are the long-term implications of this foreign military sale for U.S. defense industrial base capacity and readiness, considering the resources allocated to this contract?
This contract supports BAE Systems' production capacity and workforce, potentially enhancing the U.S. defense industrial base's ability to meet both domestic and allied demands. However, allocating significant resources to foreign sales requires careful balancing against domestic procurement needs to ensure overall U.S. military readiness and technological superiority are maintained.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: M6785415R0002
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 1100 BAIRS RD, YORK, PA, 17408
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $80,111,364
Exercised Options: $80,111,364
Current Obligation: $80,111,364
Subaward Activity
Number of Subawards: 131
Total Subaward Amount: $29,206,371
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-12-18
Current End Date: 2020-06-15
Potential End Date: 2020-06-15 00:00:00
Last Modified: 2020-06-24
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