DoD's $18.35M contract for OE-120 antennas awarded to BAE Systems, with no competition

Contract Overview

Contract Amount: $18,354,664 ($18.4M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2011-06-30

Contract Duration: 1,368 days

Daily Burn Rate: $13.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OFY07 BUY OF THREE (3) OE-120 ANTENNA (FMS AUS)

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $18.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: OFY07 BUY OF THREE (3) OE-120 ANTENNA (FMS AUS) Key points: 1. The contract value of $18.35 million for OE-120 antennas represents a significant investment in specialized equipment. 2. The absence of competition raises questions about potential overpricing and the availability of alternative solutions. 3. The contract duration of 1368 days suggests a long-term need for these specific antenna systems. 4. Awarded by the Department of the Navy, this contract highlights a specific procurement need within the defense sector. 5. The fixed-price contract type aims to control costs, but the lack of competition limits price discovery. 6. The 'Other Support Activities for Air Transportation' NAICS code suggests these antennas may be for aviation support systems.

Value Assessment

Rating: questionable

Benchmarking the value of this specific OE-120 antenna contract is challenging without comparable sole-source procurements for the same equipment. However, the lack of competition inherently limits the government's ability to secure the best possible price. The $18.35 million awarded suggests a substantial investment, and without competitive bids, it's difficult to ascertain if this represents fair market value or if taxpayers are potentially overpaying for the equipment and associated support.

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 Information and Electronic Systems Integration Inc., was considered. There is no indication of a competitive bidding process. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of bidders means the government did not benefit from price reductions or innovative solutions that often arise from a competitive environment.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings and potential innovation that competitive bidding can generate, potentially leading to higher overall costs for this procurement.

Public Impact

The primary beneficiaries are likely the U.S. Navy's aviation units requiring specialized OE-120 antenna systems for their operations. The contract delivers critical communication and potentially surveillance/reconnaissance hardware essential for military readiness. The contract's geographic impact is primarily tied to the Department of the Navy's operational bases and deployment locations. The workforce implications are mainly within BAE Systems, supporting the production and delivery of these specialized electronic systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competitive award.
Sole-source awards can limit access to potentially superior or more cost-effective alternative technologies.
Limited transparency in the procurement process due to the absence of multiple bids.
Potential for vendor lock-in if the OE-120 is a proprietary or highly specialized system.

Positive Signals

The contract is for a specific, potentially critical, piece of military hardware (OE-120 antenna).
The firm fixed-price contract type provides cost certainty for the government once awarded.
The award is to a known defense contractor, BAE Systems, suggesting a level of established capability.

Sector Analysis

The defense electronics sector is characterized by high research and development costs, stringent performance requirements, and long product lifecycles. Contracts like this, for specialized antenna systems, are common within the broader defense industry. The market for such components is often limited to a few key players capable of meeting the rigorous specifications. Spending in this area is driven by the need for advanced communication, surveillance, and electronic warfare capabilities, with significant government investment allocated annually to maintain technological superiority.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, BAE Systems, is a large defense corporation. There is no explicit information provided regarding subcontracting plans to small businesses. Without specific set-aside goals or reporting on subcontracting, the direct impact on the small business ecosystem for this particular award is likely minimal, though large prime contractors often engage small businesses for various components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. As a sole-source award, it may have undergone specific justification reviews to ensure necessity and fair pricing, although the lack of competition limits the effectiveness of price oversight. Transparency is reduced compared to competed contracts. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Naval Air Systems Command (NAVAIR) procurements
Defense Information Systems Agency (DISA) contracts
Tactical Data Links (TDL) systems
Electronic Warfare Systems
Aerospace Communication Equipment

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. OFY07 BUY OF THREE (3) OE-120 ANTENNA (FMS AUS)

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 $18.4 million.

What is the period of performance?

Start: 2007-10-01. End: 2011-06-30.

What is the specific function and importance of the OE-120 antenna within the Department of Defense?

The OE-120 antenna is a specialized piece of equipment, likely used for communication or data transmission purposes within the Department of Defense, specifically the Navy. Its classification under 'Other Support Activities for Air Transportation' suggests a potential role in supporting aviation operations, possibly for command and control, navigation, or intelligence gathering related to air assets. The fact that it was procured via a sole-source contract valued at over $18 million indicates it is a critical component for which there may be limited alternatives or a highly specialized requirement that only BAE Systems could fulfill at the time of award. Its importance lies in ensuring the operational effectiveness and communication capabilities of the platforms or systems it is integrated with.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the requirement. For the OE-120 antenna contract awarded to BAE Systems, the justification could stem from several factors. It might be a proprietary technology developed by BAE Systems, making them the only source. Alternatively, there might have been urgent and compelling circumstances that precluded full and open competition, such as an immediate operational need where a lengthy bidding process was not feasible. Another possibility is that the specific technical requirements were so unique that only BAE Systems possessed the necessary expertise, facilities, or existing system integration knowledge to fulfill the contract effectively within the required timeframe. Without the specific justification documentation, the exact reason remains speculative.

How does the $18.35 million contract value compare to similar antenna procurements within the DoD?

Directly comparing the $18.35 million value of this sole-source OE-120 antenna contract to similar procurements is difficult without knowing the exact specifications, quantity, and technological sophistication of the antennas involved. However, given the sole-source nature and the award amount, it suggests a significant investment in specialized, potentially high-performance equipment. In the defense sector, antenna systems can range from relatively inexpensive components to highly complex, integrated systems costing millions. For sole-source awards, the price is often scrutinized more heavily due to the lack of competitive pressure. If comparable antennas were procured competitively, the price per unit might be lower, offering a benchmark for value. The duration of the contract (over three years) also indicates a substantial scope of work, encompassing not just the hardware but potentially integration, support, or sustainment.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude is the potential for inflated pricing. Without competitive bids, the government lacks the leverage to negotiate the lowest possible price, potentially leading to paying more than fair market value. Another significant risk is the lack of innovation; a competitive environment often spurs contractors to offer more advanced solutions or cost-saving measures. Furthermore, sole-source awards can lead to vendor lock-in, making it difficult and costly to switch to alternative suppliers or technologies in the future. There's also a reduced incentive for the sole provider to maintain high levels of efficiency or customer service, as competition is not a factor. Finally, the lack of transparency in the bidding process can raise concerns about the fairness and justification of the award.

What is BAE Systems' track record with similar sole-source defense contracts?

BAE Systems is a major global defense contractor with a long history of securing numerous contracts with the U.S. Department of Defense, many of which are sole-source due to the specialized nature of defense technology. Their track record includes a wide range of complex systems, from naval platforms and aircraft components to electronic warfare and communication systems. While specific data on their sole-source antenna contracts isn't detailed here, BAE Systems generally operates within a highly regulated environment. Their performance on large contracts is often subject to government oversight and performance metrics. However, like any large contractor, they have likely faced scrutiny regarding pricing and contract execution on sole-source awards, which are inherently less transparent than competed procurements. Their extensive experience suggests they possess the capability to deliver, but the value proposition of sole-source awards remains a point of analysis.

How has spending on 'Other Support Activities for Air Transportation' evolved over the years, and does this contract fit typical patterns?

Spending within the 'Other Support Activities for Air Transportation' (NAICS 488190) category by the Department of Defense can fluctuate based on specific operational needs, modernization programs, and the lifecycle of aviation assets. This category often includes services and equipment related to the maintenance, repair, and support of air transportation infrastructure and systems, which can encompass a wide array of items, including specialized communication and electronic equipment like antennas. A $18.35 million contract for antennas, even if sole-source, could fit within the broader spending patterns if it addresses a critical, unique requirement for a specific aviation support system. However, without historical data specific to OE-120 antenna procurements or detailed breakdowns of spending within NAICS 488190, it's difficult to definitively state if this contract is typical. Sole-source awards, in general, are less common than competed ones, so its nature makes it stand out.

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

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001907R0033

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 65 SPIT BROOK RD, NASHUA, NH, 02

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

Financial Breakdown

Contract Ceiling: $18,354,664

Exercised Options: $18,354,664

Current Obligation: $18,354,664

Contract Characteristics

Cost or Pricing Data: YES

Timeline