DoD's $43M Contract for Advanced Weapons Tech Development with United Defense Raises Cost and Competition Concerns

Contract Overview

Contract Amount: $11,879,941 ($11.9M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2003-03-05

End Date: 2009-10-31

Contract Duration: 2,432 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200306!001017!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001403C0117 !A!N! !N! !20030305!20030930!006481543!098060218!175406842!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000001100000!N!N!000000000000!AC53!RDTE/WEAPONS-ADV TECH DEV !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!N!U!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 200306!001017!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001403C0117 !A!N! !N! !20030305!20030930!006481543!098060218!175406842!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNE… Key points: 1. The contract's cost-plus-fixed-fee structure and lack of competition suggest potential for cost overruns. 2. United Defense, L.P. secured this significant award without a competitive bidding process. 3. The 'Research and Development in the Physical, Engineering, and Life Sciences' sector is prone to cost uncertainties. 4. The long duration and lack of clear performance metrics increase program risk.

Value Assessment

Rating: questionable

The cost-plus-fixed-fee (CPFF) contract type, combined with a lack of competition, makes it difficult to benchmark pricing effectively against similar contracts. The total value of $43M over nearly 7 years suggests a high per-unit cost, but without detailed breakdowns, a precise assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of full and open competition. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The absence of competitive bidding likely results in taxpayers paying more than they would for a competitively awarded contract, with limited transparency into the justification for the sole-source award.

Public Impact

Taxpayers may be overpaying for advanced weapons technology due to the lack of competitive bidding. The long contract duration (nearly 7 years) raises questions about the government's ability to adapt to evolving technological needs. The 'NOT COMPETED' status warrants further investigation into the justification for not seeking multiple bids.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration
Lack of detailed performance metrics

Positive Signals

Awarded to a known entity in the defense sector
Supports advanced technology development

Sector Analysis

This contract falls within the 'Research and Development in the Physical, Engineering, and Life Sciences' sector, specifically for advanced weapons technology. Spending in this R&D area can be inherently unpredictable, making cost control challenging, especially under non-competitive agreements.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a large defense contractor suggests a focus on established capabilities rather than small business participation.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight to ensure the contractor is meeting performance requirements and that costs are reasonable. The long duration further emphasizes the need for continuous monitoring and accountability.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition may lead to inflated costs.
Cost-plus-fixed-fee contracts can incentivize cost growth.
Long contract duration increases risk of obsolescence or changing requirements.
Limited transparency into the justification for sole-source award.
Potential for cost overruns without robust oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 200306!001017!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001403C0117 !A!N! !N! !20030305!20030930!006481543!098060218!175406842!N!UNITED DEFENSE, L P !4800 EAST RIVER ROAD !MINNEAPOLIS !MN!55421!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000001100000!N!N!000000000000!AC53!RDTE/WEAPONS-ADV TECH DEV !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B

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 $11.9 million.

What is the period of performance?

Start: 2003-03-05. End: 2009-10-31.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require accessing the contract file to understand the specific justification, such as a critical need, lack of available sources, or a sole-source justification approved by the contracting officer. Without this information, it's impossible to assess if competitive alternatives were adequately explored or if the sole-source decision was truly warranted.

How will the government ensure cost control and value for money given the cost-plus-fixed-fee structure and lack of competition?

With a CPFF contract and no competition, cost control relies heavily on stringent government oversight, detailed cost monitoring, and effective negotiation of the fixed fee. The government must actively manage the scope, track all incurred costs, and ensure that the contractor is operating efficiently. Regular audits and performance reviews are crucial to identify potential cost overruns and ensure value is being achieved.

What are the key performance indicators (KPIs) for this contract, and how will their achievement be measured over the extended duration?

The data does not specify the key performance indicators (KPIs) for this contract. Given the 'Research and Development' nature and the long duration (nearly 7 years), defining and measuring success can be complex. Effective oversight would involve clearly defined technical milestones, deliverables, and performance metrics that are regularly assessed to ensure progress and alignment with the program's objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 4800 EAST RIVER ROAD, MINNEAPOLIS, MN, 55421

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline