Navy awards $33.5M for APKWS II missile production, highlighting guided missile manufacturing sector

Contract Overview

Contract Amount: $33,455,077 ($33.5M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2010-07-30

End Date: 2012-10-31

Contract Duration: 824 days

Daily Burn Rate: $40.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: APKWS II LRIP I-II

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: APKWS II LRIP I-II Key points: 1. Contract value represents a significant investment in guided missile technology. 2. BAE Systems, a major defense contractor, secured this award. 3. The contract falls under the broader category of guided missile and space vehicle manufacturing. 4. Fixed-price contract type suggests defined costs and potential for contractor efficiency. 5. The award duration of 824 days indicates a medium-term production requirement. 6. This contract contributes to the Navy's air-to-ground ordnance capabilities.

Value Assessment

Rating: good

The contract value of $33.5 million for APKWS II LRIP I-II appears reasonable for a Low Rate Initial Production (LRIP) phase of a guided missile system. Benchmarking against similar missile production contracts is challenging without specific unit quantities and detailed specifications. However, the firm fixed-price nature suggests that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the price is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be open, specific sources were excluded, potentially due to unique capabilities or existing program integration. The exact reasons for exclusion and the number of bidders considered are not detailed in the provided data, making a full assessment of competition dynamics difficult.

Taxpayer Impact: The exclusion of sources, even in an otherwise open competition, may limit the potential for the most competitive pricing. Taxpayers benefit from competition, and any limitations on that process warrant scrutiny to ensure the best possible value.

Public Impact

The U.S. Navy benefits from enhanced air-to-ground strike capabilities. The contract supports the production of the Advanced Precision Kill Weapon System (APKWS) II. This system is designed for use on various aircraft platforms, increasing operational flexibility. The contract supports jobs within the defense manufacturing sector, particularly in New Hampshire. The successful execution of this contract contributes to national defense readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition details make it difficult to ascertain if the best possible price was achieved.
The exclusion of sources, even if justified, reduces the pool of potential bidders.

Positive Signals

Firm fixed-price contract type shifts cost risk to the contractor.
The contract supports a proven and effective weapon system for the Navy.
The award is for a Low Rate Initial Production phase, suggesting a mature technology.

Sector Analysis

The guided missile and space vehicle manufacturing sector is a critical component of the defense industrial base. This contract for the APKWS II system falls within this specialized area. The market is characterized by high barriers to entry due to technological complexity, stringent quality requirements, and significant R&D investment. Spending in this sector is driven by military modernization programs and geopolitical demands. Comparable spending benchmarks would typically involve other missile system procurements by various branches of the U.S. military.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. Given the nature of advanced missile manufacturing, prime contracts are often awarded to large, specialized defense contractors. The impact on the small business ecosystem would likely be through potential subcontracting opportunities, which are not specified here. Further investigation into BAE Systems' subcontracting practices would be needed to assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm fixed-price nature provides some inherent accountability by placing cost risk on the contractor. Transparency is generally maintained through contract awards databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. The specific oversight mechanisms for LRIP phases often involve rigorous testing and quality assurance protocols.

Related Government Programs

Guided Missile Manufacturing
Ordnance Procurement
Naval Aviation Support Systems
Defense Production Act Investments

Risk Flags

Limited Competition Details
Potential Supply Chain Vulnerabilities
LRIP Phase Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. APKWS II LRIP I-II

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 $33.5 million.

What is the period of performance?

Start: 2010-07-30. End: 2012-10-31.

What is the historical spending trend for APKWS II by the Department of Defense?

Analyzing historical spending for the APKWS II program requires accessing detailed contract award data over multiple fiscal years. While this specific award is for $33.5 million in LRIP I-II, the total investment in APKWS II would encompass earlier development phases, subsequent production runs, and potential international sales. Trends would likely show an increase in spending as the system moved from development to low-rate production and potentially full-rate production, contingent on operational deployment and effectiveness. Factors influencing spending include technological advancements, unit costs, quantity procurements, and evolving military requirements. A comprehensive review would involve aggregating data from various contract awards to understand the program's lifecycle cost.

How does the unit cost of APKWS II compare to similar guided missile systems?

Directly comparing the unit cost of the APKWS II to other guided missile systems is complex without knowing the exact quantity of units procured under this $33.5 million contract and the specific capabilities of alternative systems. The APKWS II is known for its modularity, allowing it to be adapted to existing munitions like Hydra 70 rockets, which can contribute to cost-effectiveness compared to purpose-built missiles. However, 'similar' systems could range from smaller unguided rockets to larger, more sophisticated air-to-ground missiles with extended ranges and advanced seekers. Benchmarking would ideally involve comparing systems with comparable range, warhead size, guidance accuracy, and target engagement capabilities. The 'value for money' is often assessed in terms of effectiveness per dollar spent, considering factors like hit probability and collateral damage reduction.

What are the key performance metrics for the APKWS II system that this contract aims to support?

This contract, focused on Low Rate Initial Production (LRIP) I-II, aims to support the reliable production of APKWS II units that meet stringent performance specifications. Key metrics typically include guidance accuracy (e.g., Circular Error Probable - CEP), range, warhead effectiveness against intended targets, system reliability (e.g., Mean Time Between Failures), and integration compatibility with various aircraft platforms. The LRIP phase is crucial for validating manufacturing processes and ensuring that the system can be produced consistently at the required quality standards before scaling up to full-rate production. Successful delivery of units meeting these performance benchmarks is essential for the Navy's operational readiness and mission success.

What is BAE Systems' track record with producing guided missile systems?

BAE Systems has a substantial and established track record in the defense sector, including extensive experience in the design, development, and production of various guided missile systems and related ordnance. The company is a major global defense contractor involved in numerous complex weapon programs. Their portfolio includes air-to-air, air-to-ground, and surface-to-surface missile systems, as well as electronic warfare and C4ISR capabilities that often integrate with missile platforms. Their experience with LRIP phases and scaling up production for major defense programs suggests a strong capability to meet the demands of contracts like the APKWS II. Assessing their specific performance on past missile programs would involve reviewing contract histories, delivery performance, and any reported issues or successes.

What are the potential risks associated with the production of the APKWS II system under this contract?

Potential risks associated with the production of the APKWS II system under this contract could include supply chain disruptions for critical components, manufacturing process challenges during the LRIP phase, potential cost overruns if the fixed-price contract doesn't fully account for unforeseen issues, and quality control failures. Given that this is LRIP I-II, there's also a risk that performance specifications might require adjustments based on initial testing or operational feedback, potentially impacting production schedules or costs. Ensuring the availability of specialized raw materials and skilled labor is also a consideration. The 'limited competition' aspect might also introduce a risk if the excluded sources possessed unique, critical capabilities that are difficult to replicate.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,455,077

Exercised Options: $33,455,077

Current Obligation: $33,455,077

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $37,200

Contract Characteristics

Cost or Pricing Data: YES

Timeline