Naval Air Systems Command contract for aircraft components awarded to BAE Systems for over $252 million

Contract Overview

Contract Amount: $25,296,186 ($25.3M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2004-01-23

End Date: 2012-03-31

Contract Duration: 2,990 days

Daily Burn Rate: $8.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200412!000038!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001904C0009 !A!N! !N! ! !20040123!20050630!795958482!876861790!217304393!N!BAE SYSTEMS INFORMATION & ELEC!450 PULASKI ROAD !GREENLAWN !NY!11740!30543!103!36!GREENLAWN !SUFFOLK !NEW YORK !+000009480664!N!N!000022303990!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1G!A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $25.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: 200412!000038!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001904C0009 !A!N! !N! ! !20040123!20050630!795958482!876861790!217304393!N!BAE SYSTEMS INFORMATION & ELEC!450 PULASKI ROAD !GREENLAWN !NY!11740!30543!103!36!GREENLAWN !SUFF… Key points: 1. Contract awarded for aircraft accessories and components, indicating a need for specialized electronic and communication equipment. 2. The contract was not competed, raising questions about potential cost savings and market competitiveness. 3. A long performance period of nearly 8 years suggests a sustained requirement for these components. 4. The firm fixed-price contract type aims to provide cost certainty for the government. 5. The contractor, BAE Systems, is a significant player in the defense industry, suggesting established capabilities. 6. The primary place of performance is New York, potentially impacting the local economy and workforce.

Value Assessment

Rating: fair

The contract value of approximately $252 million over an extended period of nearly 8 years suggests a substantial investment. Without specific benchmarks for similar aircraft components or detailed cost breakdowns, it is difficult to definitively assess value for money. The firm fixed-price nature provides some cost control, but the lack of competition means there's no direct market comparison to gauge pricing efficiency. Further analysis would require understanding the specific components procured and their market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency precludes a full competition. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and may indicate a lack of readily available alternatives or a strategic decision to work with a specific, trusted supplier.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of benefiting from competitive pricing. The government may be paying a premium compared to what could have been achieved in a competitive bidding process.

Public Impact

The primary beneficiaries are likely the U.S. Navy and potentially other branches of the Department of Defense requiring specialized aircraft components. The contract delivers essential aircraft accessories and components, crucial for the operational readiness and maintenance of naval aviation assets. The geographic impact is concentrated in New York, where BAE Systems' facility is located, potentially supporting local jobs and the regional economy. Workforce implications include the employment of skilled labor at BAE Systems for manufacturing, engineering, and logistics related to these components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Long contract duration could mask inefficiencies or price increases over time if not adequately managed.
Sole-source awards can create vendor lock-in, reducing future flexibility and competitive options.
Dependence on a single supplier for critical components poses a supply chain risk.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a known entity (BAE Systems) suggests a level of confidence in their capabilities and past performance.
The contract addresses a clear need for specialized aircraft components vital to defense operations.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on electronic and communication equipment for aircraft. The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' encompasses companies that produce these types of systems. The defense industry relies heavily on specialized components like these, and spending in this area is often driven by technological advancements and national security requirements. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft systems or components awarded by the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'ss' field being false. Furthermore, there is no explicit mention of subcontracting plans for small businesses within the provided data. This suggests that the primary award went to a large business, and opportunities for small businesses may be limited unless BAE Systems voluntarily includes them in their supply chain. The impact on the small business ecosystem is likely minimal for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of accountability by fixing the price. Transparency is moderate, as contract awards are generally public, but detailed cost breakdowns and performance metrics may not be readily accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Aviation Maintenance Programs
Aircraft Component Procurement
Defense Electronics Manufacturing
Aerospace Systems Integration
Department of Defense Supply Chain Management

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. 200412!000038!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001904C0009 !A!N! !N! ! !20040123!20050630!795958482!876861790!217304393!N!BAE SYSTEMS INFORMATION & ELEC!450 PULASKI ROAD !GREENLAWN !NY!11740!30543!103!36!GREENLAWN !SUFFOLK !NEW YORK !+000009480664!N!N!000022303990!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !999

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $25.3 million.

What is the period of performance?

Start: 2004-01-23. End: 2012-03-31.

What is the specific nature of the 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS' being procured under this contract?

The provided data indicates the Product Service Code (PSC) is '1680', which corresponds to 'Aircraft Components and Accessories'. The NAICS code '334511' further specifies 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing'. While the contract title mentions 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS', the exact technical specifications, functionalities, and types of components (e.g., specific sensors, communication modules, navigation units, structural parts) are not detailed in this summary data. These components are likely critical for the operation, navigation, or communication systems of naval aircraft. Further investigation into the contract's statement of work or technical exhibits would be necessary to ascertain the precise nature of these items.

How does the $252 million contract value compare to other similar procurements for aircraft components by the Navy?

Benchmarking this $252 million contract value against similar procurements requires access to a broader dataset of naval aviation component contracts. Without comparative data on the quantity, complexity, and specific types of components procured in other contracts, a direct comparison is challenging. However, given the nearly 8-year performance period, the annual average spending would be approximately $32 million. This figure needs to be contextualized by the criticality and technological sophistication of the components. Large-scale, long-term contracts for advanced avionics or structural components can easily reach these figures. A comprehensive analysis would involve identifying contracts with similar PSCs and NAICS codes awarded over comparable timeframes to assess if this represents a typical or outlier investment.

What are the potential risks associated with a sole-source award for critical aircraft components?

Sole-source awards for critical aircraft components carry several potential risks. Firstly, the lack of competition can lead to inflated pricing, as the government does not benefit from market pressures that typically drive down costs. Secondly, it can foster vendor lock-in, making it difficult and expensive to switch suppliers in the future, even if better alternatives emerge. Thirdly, there's a risk of complacency from the sole supplier, potentially impacting innovation or responsiveness. Finally, a sole-source situation can create supply chain vulnerabilities; if the single supplier experiences production issues, financial instability, or geopolitical disruptions, it could significantly impact the availability of critical components for naval aviation, potentially grounding aircraft or delaying maintenance.

What is BAE Systems' track record with the Naval Air Systems Command and similar contracts?

BAE Systems is a major defense contractor with a significant history of working with the U.S. Department of Defense, including the Naval Air Systems Command (NAVAIR). While this specific data point doesn't detail their entire track record, their established presence suggests they have successfully executed numerous contracts. NAVAIR frequently procures complex systems and components from large defense firms like BAE Systems. Their experience likely encompasses a wide range of aircraft systems, electronics, and support services. To fully assess their track record on this specific type of component, one would need to examine past performance evaluations, delivery histories, and any documented issues or successes on previous, similar contracts awarded by NAVAIR or other defense agencies.

How has federal spending on 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' (NAICS 334511) trended over the past decade?

Federal spending within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511) has generally remained substantial, driven by ongoing modernization efforts and operational requirements within the Department of Defense. While specific year-over-year trends fluctuate based on budget allocations, program priorities, and geopolitical events, this sector consistently represents a significant portion of defense procurement. Factors such as advancements in sensor technology, unmanned systems, and integrated avionics contribute to sustained demand. Analyzing historical spending data from sources like USAspending.gov or agency budget reports would reveal specific trends, identifying periods of increased or decreased investment and the key drivers behind those shifts.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: 450 PULASKI ROAD, GREENLAWN, NY, 01

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline