Marine Corps awards $100.8M contract for Combat Vehicles to BAE Systems
Contract Overview
Contract Amount: $100,798,110 ($100.8M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 1998-07-08
End Date: 2005-06-15
Contract Duration: 2,534 days
Daily Burn Rate: $39.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 199811!1700!0400!F9999!MARINE CORPS SYSTEMS COMMAND !M6785498C2075 !A!*!* !19980708!20030709!085302958!824825459!175406842!N!80212!UNITED DEFENSE !2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95050!01052!095!13!ALBANY !DOUGHERTY !GEORGIA !0001!+000001768241!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !2DBL!LVTC-7 !3999!3!*!*!*!B!A!*!A !U!U!2!001!B!* !Z!N!D!* !* !N!C!*!C!C!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $100.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 199811!1700!0400!F9999!MARINE CORPS SYSTEMS COMMAND !M6785498C2075 !A!*!* !19980708!20030709!085302958!824825459!175406842!N!80212!UNITED DEFENSE !2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95050!01052!095!13!ALBANY !DOUGHE… Key points: 1. The contract, valued at $100.8 million, was awarded to BAE Systems Land & Armaments L.P. 2. This award falls under the Combat Vehicles sector, specifically for tracked combat assault vehicles. 3. The contract was awarded through full and open competition, suggesting a competitive bidding process. 4. The contract duration is over 7 years, from July 1998 to June 2005. 5. The pricing type is Cost Plus Fixed Fee, which can sometimes lead to cost overruns.
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which allows for cost reimbursement plus a fixed fee. While common, this can sometimes incentivize contractors to increase costs. Benchmarking against similar contracts for tracked combat vehicles is needed for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple bidders were likely considered. This method generally promotes price discovery and competitive pricing.
Taxpayer Impact: The competitive nature of the award suggests that taxpayers likely received a fair price, though the Cost Plus Fixed Fee structure warrants monitoring for potential cost escalation.
Public Impact
This contract supports the modernization and readiness of the Marine Corps' combat vehicle fleet. The acquisition of tracked combat vehicles is critical for ground operations and troop protection. The long contract duration suggests a sustained need for these vehicles or related services. The award to BAE Systems, a major defense contractor, highlights industry consolidation in this sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can lead to cost overruns.
- Long contract duration increases exposure to potential scope creep or changing requirements.
- Lack of specific unit cost data makes direct price comparison difficult.
Positive Signals
- Awarded through full and open competition.
- Supports critical military operational needs.
- Contractor is a well-established defense manufacturer.
Sector Analysis
This contract falls within the Defense sector, specifically for the procurement of tracked combat vehicles. Spending in this area is driven by military modernization efforts and operational requirements. Benchmarks for similar vehicle procurements would provide further context.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. The prime contractor, BAE Systems, is a large defense corporation, suggesting limited direct subcontracting opportunities for small businesses on this specific award unless mandated by the prime.
Oversight & Accountability
The contract was awarded by the Marine Corps Systems Command, indicating a specific program office responsible for oversight. The Cost Plus Fixed Fee structure necessitates robust oversight to manage costs and ensure contractor performance aligns with contract terms.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- Lack of detailed cost breakdown.
- Potential for contractor cost escalation.
Tags
department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $100.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 199811!1700!0400!F9999!MARINE CORPS SYSTEMS COMMAND !M6785498C2075 !A!*!* !19980708!20030709!085302958!824825459!175406842!N!80212!UNITED DEFENSE !2830 DE LA CRUZ BLVD !SANTA CLARA !CA!95050!01052!095!13!ALBANY !DOUGHERTY !GEORGIA !0001!+000001768241!N!N!000000000000!2350!COMBAT ASSAULT & TACTICAL VEH, TRACKED !A4A!COMBAT VEHICLES !2DBL!LVTC-7 !3999!3!*!*!*!B!A!*!A !U!U!2!0
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 $100.8 million.
What is the period of performance?
Start: 1998-07-08. End: 2005-06-15.
What was the total value of the fixed fee for BAE Systems under this contract, and how does it compare to industry standards for similar projects?
The provided data does not explicitly state the fixed fee amount or percentage. The total contract value is $100.8 million. To assess the fee's reasonableness, one would need to analyze the contract's cost breakdown and compare the fee structure to established benchmarks for Cost Plus Fixed Fee contracts in the defense vehicle manufacturing sector.
How effectively did the full and open competition process ensure competitive pricing, given the Cost Plus Fixed Fee structure?
Full and open competition is designed to maximize the number of potential bidders, thereby fostering price competition. However, the Cost Plus Fixed Fee structure itself can attenuate the direct impact of initial price competition, as costs are reimbursed. Effective price discovery in this context relies heavily on the government's ability to audit costs and negotiate fair fee amounts.
What is the long-term strategic value of these LVTC-7 vehicles to the Marine Corps' operational capabilities?
The LVTC-7 (Landing Craft, Vehicle, Tracked) is a critical component of amphibious assault operations, providing protected transport for troops and equipment from ship to shore. Its continued procurement and sustainment are vital for maintaining the Marine Corps' expeditionary warfare capabilities and projecting power in contested environments.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 2830 DE LA CRUZ BLVD, SANTA CLARA, CA, 95050
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 1998-07-08
Current End Date: 2005-06-15
Potential End Date: 2005-06-15 00:00:00
Last Modified: 2021-02-22
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