Navy awards $39.8M contract for ALE-55 Forward Operating Tactical Decoy Systems to BAE Systems

Contract Overview

Contract Amount: $39,769,953 ($39.8M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2020-02-27

End Date: 2024-01-31

Contract Duration: 1,434 days

Daily Burn Rate: $27.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVY ALE-55 FOTDS

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $39.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: NAVY ALE-55 FOTDS Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. The contract duration of nearly four years suggests a long-term need for these systems. 3. Fixed-price contract type aims to control costs, but sole-source nature may inflate the price. 4. The specific system (ALE-55 FOTDS) is critical for electronic warfare and aircraft survivability. 5. Awarded by the Department of Defense, indicating a significant national security component. 6. The contract value is substantial, reflecting the complexity and importance of the systems.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive data. The fixed-price nature provides some cost control, but the lack of competition means there's no direct comparison to assess if the pricing is optimal. The contract value of $39.8 million over approximately four years suggests a significant investment in critical defense technology. Without further details on the specific units or services procured, a precise value-for-money assessment is difficult, but the sole-source award raises concerns about potential overpricing compared to a competitive scenario.

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 typically occurs when only one vendor possesses the necessary technology, capability, or security clearance to fulfill the requirement. The lack of competition means that the Department of Defense did not benefit from the price discovery and innovation that typically arises from a competitive bidding process. This can lead to higher prices and potentially less favorable terms for the government.

Taxpayer Impact: Taxpayers may be paying a premium for this system due to the absence of competitive pressure. The government has limited leverage to negotiate the best possible price when only one supplier is available.

Public Impact

The primary beneficiaries are U.S. Navy pilots and aircrews who rely on the ALE-55 FOTDS for enhanced survivability in hostile environments. The contract delivers advanced electronic warfare capabilities, specifically decoy systems designed to counter radar-guided threats. Geographic impact is national, supporting naval aviation readiness across various operational theaters. Workforce implications include sustaining specialized manufacturing and engineering jobs within BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long contract duration could lead to cost overruns if not managed effectively.
Lack of transparency in sole-source justification requires careful review.
Dependence on a single supplier for critical defense technology poses a supply chain risk.

Positive Signals

Fixed-price contract type helps to cap costs and provides budget predictability.
BAE Systems is a known entity with experience in defense electronics, suggesting technical capability.
The system itself is crucial for enhancing aircraft survivability, a key operational requirement.

Sector Analysis

The defense electronics sector is characterized by high R&D costs, long product lifecycles, and significant government procurement. Contracts for electronic warfare systems like the ALE-55 FOTDS are a substantial part of this market. The market is often dominated by a few large prime contractors who possess specialized expertise and security clearances. Spending benchmarks for similar electronic warfare systems can vary widely based on complexity and quantity, but multi-million dollar awards are common for advanced capabilities.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large prime contractor like BAE Systems suggests that the primary work will be performed by the prime or its larger subcontractors. This could limit opportunities for small businesses to participate directly in this specific contract, although they may be part of BAE's broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures, potentially involving the Defense Contract Management Agency (DCMA) given the data provided. Accountability measures are inherent in the fixed-price contract type, which obligates BAE Systems to deliver the specified systems within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, but contract modifications and performance reports would be subject to internal government review and potentially Inspector General oversight if issues arise.

Related Government Programs

AN/ALE-50 Towed Decoy System
Advanced Threat Warning Systems
Electronic Warfare Pods
Countermeasure Dispensing Systems
Naval Aviation Survivability Equipment

Risk Flags

Sole-source award
Potential for higher pricing due to lack of competition
Long contract duration requires diligent oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. NAVY ALE-55 FOTDS

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 $39.8 million.

What is the period of performance?

Start: 2020-02-27. End: 2024-01-31.

What is the specific technical capability of the ALE-55 Forward Operating Tactical Decoy System (FOTDS)?

The ALE-55 FOTDS is an advanced electronic warfare (EW) system designed to protect aircraft from radar-guided threats, such as surface-to-air missiles (SAMs) and airborne interceptors. It functions as a towed decoy, meaning it is deployed behind the aircraft on a fiber-optic cable. This cable allows the decoy to receive targeting information from the aircraft's EW suite and transmit sophisticated jamming and deception signals that mimic the aircraft's radar signature. By drawing the threat's seeker away from the actual aircraft, the ALE-55 significantly enhances pilot survivability in contested airspace. Its 'forward operating' designation implies it can be employed proactively to manage the EW environment.

How does the sole-source nature of this award impact the potential cost-effectiveness for the government?

A sole-source award inherently limits cost-effectiveness because it bypasses the competitive bidding process. In a competitive environment, multiple vendors would vie for the contract, driving down prices through negotiation and innovation. Without this pressure, the sole-source provider, BAE Systems in this case, has greater leverage in setting prices. While the fixed-price contract type aims to cap costs, the baseline price itself may be higher than it would be in a competitive scenario. The government must rely on robust negotiation and justification of the sole-source requirement to mitigate potential overspending, but the absence of competing offers means there's no direct market validation of the price.

What are the risks associated with relying on a single contractor for critical defense systems like the ALE-55 FOTDS?

Relying on a single contractor, such as BAE Systems for the ALE-55 FOTDS, introduces several risks. Firstly, there's a supply chain risk; if BAE Systems faces production issues, financial instability, or geopolitical disruptions, the availability of these critical systems could be jeopardized, impacting naval readiness. Secondly, there's a technological risk; without competition, there may be less incentive for the contractor to rapidly innovate or offer upgrades, potentially leading to technological obsolescence over time. Lastly, there's a pricing risk, as mentioned, the lack of competition can lead to higher costs for the government over the life of the contract, as there is no market pressure to offer the most competitive pricing.

What is the historical spending trend for similar electronic warfare decoy systems within the Department of Defense?

Historical spending on electronic warfare (EW) systems, including decoy systems, within the Department of Defense has been substantial and generally increasing, driven by evolving threat landscapes and the need for advanced survivability measures. Programs like the ALE-50 (a predecessor to the ALE-55) and various other countermeasures have seen consistent funding over decades. While specific figures fluctuate annually based on program maturity and new acquisitions, the overall trend indicates a sustained, high-priority investment in EW capabilities. The total DoD spending on EW systems can reach billions of dollars annually, reflecting its critical role in modern warfare. Contracts for individual systems like the ALE-55, while significant, represent a portion of this broader, ongoing investment.

How does the contract type (Firm Fixed Price) mitigate risks for the government in this sole-source award?

The Firm Fixed Price (FFP) contract type is a key risk mitigation tool for the government, especially in a sole-source scenario. Under an FFP contract, BAE Systems is obligated to deliver the specified goods or services for a predetermined price, regardless of their actual costs incurred. This shifts the cost risk from the government to the contractor. If BAE Systems experiences cost overruns due to inefficiencies or unforeseen expenses, they absorb those losses. Conversely, if they manage their costs effectively, they retain the profit margin. This structure provides budget certainty for the government and incentivizes the contractor to control expenses, although it does not mitigate the risk of the initial price being set too high due to the lack of competition.

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: N0001918R0103

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

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: $89,107,537

Exercised Options: $39,769,953

Current Obligation: $39,769,953

Actual Outlays: $1,865,374

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline