DoD's $27.2M contract for radar equipment awarded to BAE Systems, highlighting potential value and competition concerns

Contract Overview

Contract Amount: $27,216,554 ($27.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2003-07-09

End Date: 2007-09-30

Contract Duration: 1,544 days

Daily Burn Rate: $17.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200312!000016!1700!AT726 !NAVAL AIR SYSTEMS COMMAND !N0001903C0050 !A!N! !N! !20030709!20060929!005149120!876861790!217304393!N!BAE SYSTEMS INFORMATION AND EL!65 SPIT BROOK ROAD !NASHUA !NH!03061!50260!011!33!NASHUA !HILLSBOROUGH !N.H. !+000010464372!Y!N!000010464372!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION !2GDA!MARK XII PROGRAM !488190!E! !3! ! ! ! ! !99990909!B!B!Y!A! !D!N!J!1!001!N!1G!Z!Y!C! ! !N!C!N! ! ! !Z!A!A!A!* !A!C!N! ! ! !Y!1719!PMA213!0001! !

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03061, UNITED STATES OF AMERICA

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $27.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: 200312!000016!1700!AT726 !NAVAL AIR SYSTEMS COMMAND !N0001903C0050 !A!N! !N! !20030709!20060929!005149120!876861790!217304393!N!BAE SYSTEMS INFORMATION AND EL!65 SPIT BROOK ROAD !NASHUA !NH!03061!50260!011!33!NASHUA !HILLS… Key points: 1. Contract awarded for radar equipment, indicating a need for advanced surveillance or targeting systems. 2. The award to BAE Systems suggests a reliance on established defense contractors for specialized electronic systems. 3. A fixed-price contract type generally shifts risk to the contractor, potentially leading to more predictable costs. 4. The duration of the contract (over 1500 days) implies a long-term requirement for the specified radar equipment. 5. The absence of competition raises questions about whether the government secured the best possible price and solution. 6. The specific equipment, 'RADAR EQUIPMENT, EXCEPT AIRBORNE', points to ground-based or ship-based applications.

Value Assessment

Rating: questionable

The contract value of $27.2 million for radar equipment appears substantial. Without specific details on the quantity and technical specifications of the radar systems, a direct value-for-money assessment is challenging. However, the lack of competition (detailed below) suggests that the government may not have achieved optimal pricing compared to a competitive scenario. Benchmarking against similar sole-source or limited-competition contracts for comparable radar systems would be necessary for a more definitive value assessment.

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, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they often result in higher prices and reduced innovation compared to full and open competition. The lack of multiple bidders limits the government's ability to leverage market forces to drive down costs and ensure the most suitable technology is selected.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing the requirement, there is less assurance that the price reflects fair market value.

Public Impact

The Department of the Navy benefits from the acquisition of specialized radar equipment. This contract supports the operational readiness and technological capabilities of naval air systems. The contract likely impacts the workforce at BAE Systems' Nashua, NH facility, potentially creating or sustaining jobs in advanced manufacturing and engineering. The radar equipment may be deployed to various naval installations or platforms, enhancing surveillance and operational effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to higher costs for taxpayers.
Lack of transparency in the justification for a sole-source award could mask underlying issues.
Contract duration is long, increasing the risk of technological obsolescence or changing requirements without flexibility.
Limited information available on the specific performance metrics and expected outcomes of the radar system.

Positive Signals

Award to an established contractor like BAE Systems suggests a degree of confidence in their technical capabilities.
Firm Fixed Price contract type shifts cost overrun risk to the contractor.
The contract specifies a clear product category (radar equipment), indicating a defined need.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on electronic warfare and radar systems. The market for such specialized defense electronics is often characterized by high barriers to entry, significant R&D investment, and a limited number of qualified suppliers, including major players like BAE Systems. Government spending in this area is critical for maintaining technological superiority, but the nature of defense procurement can sometimes lead to less competitive environments for specific niche technologies.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the specialized nature of radar equipment and the sole-source award to a large prime contractor, the direct impact on small businesses through prime contracting is likely minimal. However, BAE Systems may engage small businesses as subcontractors, though this information is not provided. The overall ecosystem impact would depend on the extent of subcontracting opportunities created.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Naval Air Systems Command (NAVAIR). As a sole-source award, the justification and approval process would be subject to specific procurement regulations and oversight. Transparency is limited due to the lack of public competition details. Inspector General (IG) offices within the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Naval Air Systems Command Procurement
Defense Radar Systems Procurement
BAE Systems Defense Contracts
Sole-Source Defense Contracts
Electronic Warfare Systems

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of competition.
Risk of technological obsolescence over the contract's long duration.
Limited transparency regarding specific system capabilities and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. 200312!000016!1700!AT726 !NAVAL AIR SYSTEMS COMMAND !N0001903C0050 !A!N! !N! !20030709!20060929!005149120!876861790!217304393!N!BAE SYSTEMS INFORMATION AND EL!65 SPIT BROOK ROAD !NASHUA !NH!03061!50260!011!33!NASHUA !HILLSBOROUGH !N.H. !+000010464372!Y!N!000010464372!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION !2GDA!MARK XII PROGRAM !488190!E! !3! ! ! ! ! !99990909!B

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 Navy).

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2003-07-09. End: 2007-09-30.

What is the specific type and capability of the 'RADAR EQUIPMENT, EXCEPT AIRBORNE' procured under this contract?

The contract identifies the product as 'RADAR EQUIPMENT, EXCEPT AIRBORNE' with a Product Service Code (PSC) of 5840. This PSC typically covers radar equipment, including components and accessories, but excludes airborne systems. While the specific model or technical capabilities are not detailed in the provided data, the 'MARK XII PROGRAM' designation suggests it might be related to identification friend or foe (IFF) systems or other specialized radar applications used for target identification and tracking, likely for ground-based or naval platforms. Further research into the Mark XII Program would be needed to ascertain the precise functionality and intended use.

What was the justification for awarding this contract on a sole-source basis to BAE Systems?

The provided data indicates the contract was 'NOT COMPETED'. Government contracts are typically sole-sourced when only one responsible source is available or capable of meeting the requirement. This could be due to proprietary technology, unique capabilities possessed solely by BAE Systems, urgent and compelling needs where competition is impractical, or if the follow-on procurement is to a contractor that developed the original system under competitive conditions. A formal Justification for Other Than Full and Open Competition (JOFOC) would have been required and should detail the specific reasons why competition was not feasible or advantageous for this particular radar equipment.

How does the contract value of approximately $27.2 million compare to similar radar equipment procurements?

Direct comparison of the $27.2 million contract value is difficult without knowing the exact specifications, quantity, and technological sophistication of the radar systems procured. However, radar systems can range significantly in price, from relatively low-cost surveillance units to highly advanced, multi-function systems costing tens or hundreds of millions. Given this was a sole-source award, it is plausible that the price may be higher than if it had been competitively procured. Benchmarking would require identifying contracts for comparable radar systems, ideally those awarded under competitive conditions, to assess if BAE Systems' pricing was within a reasonable range for the capabilities provided.

What is BAE Systems' track record with the Department of the Navy and similar radar systems?

BAE Systems is a major defense contractor with a significant history of supplying various systems, including electronic warfare and radar components, to the Department of Defense, including the Navy. Their Information and Electronic Systems Integration division, based in Nashua, NH, is known for producing advanced electronic systems. While this specific contract data doesn't detail past performance on this exact program, BAE Systems' established presence and the award itself suggest they have a relevant track record and possess the necessary technical capabilities and security clearances to fulfill this requirement for the Naval Air Systems Command.

What are the potential risks associated with a long-duration contract (1544 days) for radar equipment?

A contract duration of 1544 days (approximately 4.25 years) for radar equipment carries several potential risks. Firstly, technological obsolescence is a significant concern; radar technology evolves rapidly, and equipment delivered under a long-term contract might become outdated before its expected service life is complete. Secondly, requirements may change over this period due to evolving threats or operational needs, potentially making the procured system less relevant or requiring costly modifications. Thirdly, a fixed-price contract over a long duration can expose the contractor to risks if material costs or labor rates increase substantially beyond initial projections, although this also protects the government from cost overruns. Finally, the long duration, coupled with a sole-source award, reduces flexibility for the government to adapt to new technological advancements or alternative solutions.

What is the historical spending pattern for radar equipment by the Department of the Navy?

Historical spending data for radar equipment by the Department of the Navy is extensive and varies significantly based on the type of radar (e.g., surveillance, fire control, navigation, electronic warfare) and the platform (ship, aircraft, ground). The Navy procures a wide array of radar systems to support its global operations. While this specific $27.2 million contract represents a single data point, overall Navy spending on radar and electronic systems constitutes a substantial portion of its procurement budget, reflecting the critical role these technologies play in naval warfare, intelligence, and command and control. Analyzing broader spending trends would require access to historical procurement databases and budget allocations for relevant PSC codes.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 65 SPIT BROOK ROAD, NASHUA, NH, 03061

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline