DoD's $14M contract for navigation systems awarded to BAE Systems, highlighting a sole-source procurement

Contract Overview

Contract Amount: $13,983,701 ($14.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2016-02-02

End Date: 2023-10-30

Contract Duration: 2,827 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ODCS

Place of Performance

Location: WAYNE, PASSAIC County, NEW JERSEY, 07470

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: ODCS Key points: 1. The contract value of $13.98 million for navigation systems represents a significant investment in defense technology. 2. BAE Systems, a major defense contractor, secured this award, indicating established relationships and capabilities. 3. The 'NOT COMPETED' status raises questions about potential missed opportunities for cost savings through broader competition. 4. The contract duration of 2827 days (over 7 years) suggests a long-term need for these specialized systems. 5. The firm fixed-price contract type aims to provide cost certainty for the government. 6. The absence of small business involvement (ss: false, sb: false) suggests this contract did not prioritize small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this $13.98 million contract is challenging without specific performance metrics or comparable sole-source awards. However, the duration of over seven years suggests a substantial commitment. The firm fixed-price nature provides some cost control, but the lack of competition prevents a direct comparison to assess if the pricing is optimal. Further analysis would require understanding the specific technological requirements and the market for these specialized navigation systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that can arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a bidding process, there's less assurance that the price reflects the best possible value achievable in a more open market.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other Department of Defense branches relying on advanced navigation systems. The contract delivers critical search, detection, navigation, guidance, aeronautical, and nautical systems and instruments. The geographic impact is likely concentrated within areas of naval operations and defense installations, with a focus on New Jersey where the contractor is based. Workforce implications include employment opportunities at BAE Systems and its potential subcontractors, particularly in specialized engineering and manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Long contract duration (over 7 years) may not adapt well to rapidly evolving technology.
No indication of small business participation or subcontracting opportunities.
Lack of transparency in the justification for sole-source award.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established defense contractor like BAE Systems suggests reliability and proven capability.
Contract addresses critical defense needs for navigation and guidance systems.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a specialized niche within the broader defense industrial base. The market for such advanced systems is often characterized by high barriers to entry due to technological complexity, intellectual property, and stringent government requirements. Spending in this area is critical for maintaining military readiness and technological superiority, with contracts often being long-term and awarded to a limited number of highly capable firms.

Small Business Impact

This contract does not appear to have any small business set-aside provisions, as indicated by 'ss: false' and 'sb: false'. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, BAE Systems, is expected to fulfill the contract requirements directly or through larger partners, potentially limiting opportunities for the small business ecosystem within this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and terms would be subject to review by relevant DoD oversight bodies. Transparency regarding the specific reasons for the sole-source designation and the performance metrics would be key to assessing accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Navigation Systems
Defense Electronics Manufacturing
Aeronautical and Nautical Instruments
Sole-Source Defense Contracts
BAE Systems Federal Contracts

Risk Flags

Sole-source award without clear justification
Long contract duration may lead to technological obsolescence
Lack of small business participation
Limited public information on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. ODCS

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 $14.0 million.

What is the period of performance?

Start: 2016-02-02. End: 2023-10-30.

What specific navigation systems are being procured under this contract, and what are their intended applications within the Department of the Navy?

The contract data indicates the procurement of 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' products. While the specific system names are not detailed in the provided data, these typically include advanced radar systems, inertial navigation units, GPS receivers, electronic warfare support systems, and integrated command and control displays crucial for naval vessels and aircraft. Their intended applications span from ship and aircraft navigation in complex environments to target detection, situational awareness, and mission execution, ensuring operational effectiveness and safety for naval forces.

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

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or essential interoperability requirements that only a specific contractor can meet. For BAE Systems, this could involve specialized intellectual property, existing integration with current naval platforms, or a proven track record with highly sensitive or classified navigation technologies. Without the specific justification document (e.g., a Justification and Approval - J&A), it's presumed the Navy determined that competition was not feasible or would not result in the best value due to these factors. This often occurs in highly specialized defense markets where few companies possess the requisite expertise and certifications.

How does the firm fixed-price contract type mitigate risks for the government compared to other contract types in this context?

The firm fixed-price (FFP) contract type is generally advantageous for the government when the scope of work is well-defined and risks associated with cost overruns are manageable. In this case, it shifts the primary cost risk to the contractor, BAE Systems. The government agrees to pay a set price, regardless of the contractor's actual costs. This provides budget certainty and incentivizes the contractor to control costs efficiently. However, for highly complex or R&D-intensive procurements, FFP can sometimes lead to higher initial prices as contractors may build in contingencies for unforeseen issues. Given the nature of navigation systems, FFP likely aims to lock in costs for a long-term supply.

What is BAE Systems' track record with the Department of Defense, particularly in navigation systems?

BAE Systems is a major global defense contractor with a substantial and long-standing relationship with the Department of Defense across various sectors, including electronics, aerospace, and naval systems. They have a proven track record in developing and supplying sophisticated navigation, guidance, and control systems for a wide range of military platforms, including ships, aircraft, and ground vehicles. Their extensive experience and existing infrastructure position them as a key supplier for critical defense technologies. The DoD often relies on established contractors like BAE Systems for complex systems due to their demonstrated capabilities, security clearances, and ability to meet stringent military specifications.

What are the potential implications of this contract's long duration (over 7 years) on technological relevance and future upgrades?

A contract duration of over seven years (2827 days) for navigation systems presents both benefits and potential drawbacks regarding technological relevance. On the positive side, it provides long-term stability for the supplier and ensures a consistent supply of critical components. However, the rapid pace of technological advancement, particularly in areas like GPS, sensor fusion, and artificial intelligence for navigation, means that systems developed early in the contract could become outdated before its completion. This necessitates robust contract management, including potential provisions for technology refresh, software updates, or phased upgrades to ensure the systems remain effective and secure throughout their lifecycle and beyond.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract that are publicly available?

Publicly available data for this contract does not typically include specific performance metrics or Key Performance Indicators (KPIs). These details are usually considered sensitive or proprietary and are outlined in the contract's statement of work (SOW) and associated performance work statements (PWS). While the contract type (Firm Fixed Price) implies performance expectations, the exact measures for system accuracy, reliability, maintainability, or delivery timelines are not disclosed in summary data. Government contract databases often focus on award details, value, and contractor information rather than granular performance benchmarks.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001914R1012

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 150 PARISH DR, WAYNE, NJ, 07470

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: $23,138,420

Exercised Options: $15,790,338

Current Obligation: $13,983,701

Actual Outlays: $372,125

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline