DoD awards $58.2M for OE-120 FY23-25 Production to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $58,217,385 ($58.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2023-06-13

End Date: 2028-01-11

Contract Duration: 1,673 days

Daily Burn Rate: $34.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OE-120 FY23-25 PRODUCTION

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $58.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: OE-120 FY23-25 PRODUCTION Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long-term contract duration of 1673 days suggests a need for sustained production. 3. Firm Fixed Price contract type shifts cost risk to the contractor. 4. The contract is for search, detection, navigation, guidance, and related systems. 5. The award value of $58.2 million is spread over approximately 4.5 years. 6. No small business set-aside was indicated for this award.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source award is challenging without competitive data. The contract value of $58.2 million over nearly five years averages to approximately $12.9 million annually. Without comparable contract data or market research, it is difficult to definitively assess if this represents excellent value for money. The firm fixed-price structure, however, provides cost certainty for the government.

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 typically occurs when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means the government did not benefit from potential price reductions or innovative solutions that might arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive pressure. The government's negotiating position is inherently weaker in a sole-source scenario.

Public Impact

The Department of the Navy benefits from the continued production of critical OE-120 systems. These systems are essential for search, detection, navigation, and guidance functions, supporting naval operations. The contract supports manufacturing activities likely within New Hampshire, where BAE Systems has a presence. The contract ensures the availability of specialized equipment for military applications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing opportunities.
Lack of transparency in the justification for sole-source award.
Long-term contract duration may not allow for flexibility if requirements change.

Positive Signals

Firm Fixed Price contract type provides cost certainty.
BAE Systems is an established defense contractor with relevant experience.
Contract ensures continued availability of critical defense systems.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a specialized area within the broader defense industrial base. This sector is characterized by high technological barriers to entry and significant R&D investment. Spending in this area is crucial for maintaining national security capabilities. Comparable spending benchmarks are difficult to ascertain without more specific system details, but defense electronics manufacturing represents a substantial portion of the overall defense budget.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature and the likely specialized requirements of the OE-120 system, it is improbable that subcontracting opportunities for small businesses would be mandated or actively sought through this specific award mechanism. The impact on the small business ecosystem is likely minimal unless BAE Systems voluntarily engages small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates BAE Systems to deliver specified goods within the agreed-upon price. Transparency regarding the sole-source justification and performance metrics would be key areas for oversight. The Inspector General of the Department of Defense may also have jurisdiction for audits and investigations.

Related Government Programs

Naval Radar Systems
Defense Electronics Manufacturing
Navigation and Guidance Systems
Military Search and Detection Equipment

Risk Flags

Sole-source award lacks competitive justification.
Limited transparency on specific system performance metrics.
Potential for price inefficiencies due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. OE-120 FY23-25 PRODUCTION

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 $58.2 million.

What is the period of performance?

Start: 2023-06-13. End: 2028-01-11.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under circumstances such as unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when only one responsible source can provide the required supplies or services. A detailed justification document, often required by federal acquisition regulations (e.g., FAR Part 6), would outline the rationale. Without this document, it's impossible to verify the necessity of bypassing a competitive process. This lack of transparency can raise concerns about whether the government truly explored all viable options for competition.

How does the annual value of this contract compare to similar systems or previous procurements?

The annual value of this contract averages approximately $12.9 million ($58.2 million / 4.5 years). Without access to a database of comparable contracts for similar OE-120 systems or previous procurements of this specific system, it is difficult to establish a benchmark. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' category is broad. To provide a meaningful comparison, one would need to identify contracts for systems with similar functionalities, technological sophistication, and intended use within the Department of Defense or allied nations. The sole-source nature further complicates direct value comparisons, as competitive pressures are absent.

What are the key performance indicators (KPIs) or deliverables expected under this contract?

The provided data indicates the contract is for 'OE-120 FY23-25 PRODUCTION' and specifies a 'FIRM FIXED PRICE' type. While this suggests the delivery of a defined quantity of OE-120 systems, the specific performance indicators and detailed deliverables are not itemized. Typically, such contracts would include specifications on system performance (e.g., accuracy, range, reliability), delivery schedules, quality assurance requirements, and potentially testing protocols. These KPIs would be detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which are not included in the provided data. Monitoring these KPIs is crucial for ensuring the government receives the intended value.

What is BAE Systems' track record with the Department of the Navy for similar systems?

BAE Systems is a major defense contractor with a significant history of providing systems and services to the Department of the Navy. While the specific 'OE-120' system is not detailed, BAE Systems is known for its work in areas such as radar, electronic warfare, command and control, and naval weapons systems. Their track record with the Navy likely includes numerous contracts for complex electronic and combat systems. A thorough assessment would involve reviewing past performance evaluations (e.g., CPARS reports), any past issues or disputes related to similar contracts, and their overall success in delivering on time and within budget for the Navy. Given their established presence, it is probable they have relevant experience.

Are there any identified risks associated with the production or performance of the OE-120 system?

The provided data does not explicitly list risks associated with the OE-120 system. However, general risks in defense production contracts include potential production delays, supply chain disruptions, technological obsolescence, cost overruns (though mitigated by FFP), and performance issues if the system does not meet stringent military requirements. For a sole-source contract, a key risk is the lack of competitive validation of the system's capabilities and pricing. Furthermore, reliance on a single supplier can create vulnerabilities if that supplier faces financial difficulties or operational challenges. Specific risks would be detailed in the contract's risk management plan.

What is the historical spending trend for OE-120 systems or similar navigation/detection equipment by the DoD?

The provided data only covers a single contract award for OE-120 production from FY23-FY25. To understand historical spending trends, one would need to analyze historical contract databases (like FPDS or USASpending) for the OE-120 system specifically, or for broader categories like 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' over multiple fiscal years. This would reveal if spending has been consistent, increasing, or decreasing, and identify other agencies or programs that procure similar equipment. Without this broader historical context, it's impossible to assess current spending patterns relative to past investments.

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: N0001923R0012

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

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: $58,562,433

Exercised Options: $58,217,385

Current Obligation: $58,217,385

Actual Outlays: $436,714

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline