DoD's $36.3M Ammunition Contract with BAE Systems Lacked Competition, Raising Cost Concerns
Contract Overview
Contract Amount: $36,260,901 ($36.3M)
Contractor: BAE Systems Global Combat Systems Munitions Limited
Awarding Agency: Department of Defense
Start Date: 2013-09-17
End Date: 2018-05-31
Contract Duration: 1,717 days
Daily Burn Rate: $21.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AUGMENTING CHARGE (AC), LIVE
Plain-Language Summary
Department of Defense obligated $36.3 million to BAE SYSTEMS GLOBAL COMBAT SYSTEMS MUNITIONS LIMITED for work described as: AUGMENTING CHARGE (AC), LIVE Key points: 1. Significant spending on ammunition manufacturing, highlighting defense sector reliance on specialized suppliers. 2. BAE Systems Global Combat Systems Munitions Limited secured a large, non-competed contract. 3. The contract's lack of competition raises questions about potential overpayment and taxpayer value. 4. Ammunition manufacturing is a critical but often opaque segment of defense spending.
Value Assessment
Rating: questionable
The contract value of $36.3M for ammunition manufacturing is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar contracts for ammunition, potentially indicating a higher cost to taxpayers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was explicitly 'NOT COMPETED,' indicating a sole-source award. This significantly limits price discovery and negotiation leverage, as there was no opportunity for other qualified manufacturers to bid, potentially leading to inflated prices.
Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may have paid a premium for the ammunition, as the government did not benefit from the cost-saving pressures inherent in a competitive bidding process.
Public Impact
Taxpayers may have overpaid for essential ammunition due to the lack of competitive bidding. The Department of Defense's reliance on a single supplier for this critical component warrants scrutiny. Future defense procurement strategies should prioritize competitive sourcing to ensure better value for money.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Sole-source award
Positive Signals
- Definitive contract awarded
- Long-term engagement (1717 days)
Sector Analysis
This contract falls within the defense sector, specifically ammunition manufacturing. Spending in this area is critical for national security but can be prone to higher costs when competition is limited, as seen with this sole-source award.
Small Business Impact
The data indicates this contract was awarded to BAE Systems Global Combat Systems Munitions Limited, a large corporation. There is no indication that small businesses were involved as subcontractors or prime contractors in this specific award, suggesting limited small business participation.
Oversight & Accountability
The 'NOT COMPETED' status suggests a potential gap in oversight regarding the justification for sole-source procurement. Further review would be needed to confirm if adequate justification was provided and if alternative competitive strategies were explored.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Sole-source award
- Potential for inflated pricing
- Limited transparency on justification
- No small business participation indicated
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $36.3 million to BAE SYSTEMS GLOBAL COMBAT SYSTEMS MUNITIONS LIMITED. AUGMENTING CHARGE (AC), LIVE
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS GLOBAL COMBAT SYSTEMS MUNITIONS LIMITED.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $36.3 million.
What is the period of performance?
Start: 2013-09-17. End: 2018-05-31.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Typically, such justifications include reasons like urgency, unique capabilities, or lack of available sources. Without this information, it's impossible to fully assess if the government acted appropriately or if taxpayers were disadvantaged by the absence of a competitive process.
How does the per-unit cost of this ammunition compare to similar items procured competitively by the DoD or other government agencies?
Benchmarking the per-unit cost against competitively procured similar ammunition is essential for evaluating value. If this contract's pricing is significantly higher, it strongly suggests that the lack of competition led to inflated costs, resulting in a poor return on taxpayer investment for this defense procurement.
What is the long-term strategic impact of relying on a single supplier for this type of ammunition, particularly concerning supply chain resilience and future pricing?
Sole-source reliance can create vulnerabilities in the defense supply chain, increasing risks related to production disruptions or price hikes. A long-term strategy should ideally involve fostering competition or developing alternative sources to ensure consistent availability and cost-effectiveness for critical munitions.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: GLASCOED, NEWPORT
Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $36,260,901
Exercised Options: $36,260,901
Current Obligation: $36,260,901
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-09-17
Current End Date: 2018-05-31
Potential End Date: 2018-05-31 00:00:00
Last Modified: 2021-03-18
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