DoD Awards BAE Systems $430M for Guided Missile Manufacturing, No Competition

Contract Overview

Contract Amount: $430,355,384 ($430.4M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc

Awarding Agency: Department of Defense

Start Date: 2023-12-19

End Date: 2026-08-31

Contract Duration: 986 days

Daily Burn Rate: $436.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FRP-12+ WGU-59A/B GUIDANCE SECTIONS

Place of Performance

Location: HUDSON, HILLSBOROUGH County, NEW HAMPSHIRE, 03051

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $430.4 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC for work described as: FRP-12+ WGU-59A/B GUIDANCE SECTIONS Key points: 1. Significant contract value of over $430 million awarded to a single vendor. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. The contract is for guided missile and space vehicle manufacturing, a critical defense sector. 4. Long contract duration of nearly 1000 days suggests a substantial, ongoing need.

Value Assessment

Rating: questionable

The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal. Benchmarking against similar sole-source contracts in defense manufacturing would be necessary for a thorough evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The absence of competition may result in higher costs for taxpayers, as there was no market pressure to drive down prices.

Public Impact

Taxpayers may be paying a premium due to the lack of competitive bidding. The defense sector relies on specialized manufacturing, making oversight crucial for cost-effectiveness. Long-term contracts can lock in pricing, potentially missing out on future cost reductions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High contract value
Long contract duration

Positive Signals

Critical defense capability
Clear end dates

Sector Analysis

This contract falls within the Defense sector, specifically guided missile and space vehicle manufacturing. Spending in this area is often characterized by high R&D costs and specialized production, with significant government oversight typically required.

Small Business Impact

The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within this large prime contract.

Oversight & Accountability

Given the sole-source nature and significant value, robust oversight from the Department of the Navy is essential to ensure fair pricing and contract performance. Tracking expenditures and deliverables will be key.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition may lead to higher costs.
Potential for vendor lock-in.
Limited transparency in pricing.
Long-term commitment without market validation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $430.4 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. FRP-12+ WGU-59A/B GUIDANCE SECTIONS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION & 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 $430.4 million.

What is the period of performance?

Start: 2023-12-19. End: 2026-08-31.

What is the justification for the sole-source award, and how was the price determined to be fair and reasonable?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. The contracting officer must still conduct a price analysis to ensure the price is fair and reasonable, often by comparing it to historical prices, other government contracts, or commercial price lists, even without direct competition.

What are the potential risks associated with a sole-source contract of this magnitude in the defense sector?

Sole-source contracts of this magnitude carry risks such as inflated pricing due to the absence of competitive pressure, potential for vendor complacency, and reduced incentive for innovation. There's also a risk that the government may not be getting the best value available in the market.

How will the effectiveness of this contract be measured, particularly given the lack of competition?

Effectiveness will be measured through performance metrics outlined in the contract, such as delivery schedules, quality standards, and technical specifications. The government will likely rely on rigorous inspection and acceptance processes, along with contractor performance evaluations, to ensure the guided missiles meet requirements.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001918R0018

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 65 RIVER RD, HUDSON, NH, 03051

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: $430,355,384

Exercised Options: $430,355,384

Current Obligation: $430,355,384

Subaward Activity

Number of Subawards: 85

Total Subaward Amount: $157,289,056

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001919D0026

IDV Type: IDC

Timeline