DoD awards BAE Systems $322.5M for 11,000 APKWS guidance sections for US and allies

Contract Overview

Contract Amount: $322,465,000 ($322.5M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc

Awarding Agency: Department of Defense

Start Date: 2025-08-21

End Date: 2027-08-31

Contract Duration: 740 days

Daily Burn Rate: $435.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF 11,000 APKWS FRP-13 WGU-59A/B GUIDANCE SECTIONS USN (2,334) US ARMY (503) BAHRAIN (60) CZECH REPUBLIC (600) POLAND (7,058) SINGAPORE (96) AND SDAF (349).

Place of Performance

Location: HUDSON, HILLSBOROUGH County, NEW HAMPSHIRE, 03051

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $322.5 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC for work described as: PROCUREMENT OF 11,000 APKWS FRP-13 WGU-59A/B GUIDANCE SECTIONS USN (2,334) US ARMY (503) BAHRAIN (60) CZECH REPUBLIC (600) POLAND (7,058) SINGAPORE (96) AND SDAF (349). Key points: 1. Significant award for advanced missile components, supporting both US forces and international partners. 2. BAE Systems is the sole provider, raising questions about competition and potential price escalation. 3. The contract's firm-fixed-price structure aims to control costs, but long-term value needs monitoring. 4. This procurement falls within the broader defense electronics and munitions sector.

Value Assessment

Rating: good

The $322.5 million award for 11,000 units averages approximately $29,315 per guidance section. This price appears reasonable given the advanced technology and specialized nature of APKWS components, especially when compared to similar high-tech defense procurement.

Cost Per Unit: $29,315

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to BAE Systems. This limits price discovery and negotiation leverage, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may bear a premium due to the lack of competition, though the firm-fixed-price contract offers some cost certainty.

Public Impact

Enhances US and allied military capabilities with advanced missile technology. Supports international defense partnerships and interoperability. Contributes to the defense industrial base, particularly in guided missile manufacturing. Potential for follow-on procurements based on operational needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Long-term sustainment and upgrade costs are not detailed.
Dependence on a single supplier for critical components.

Positive Signals

Provides advanced missile technology to US and allied forces.
Firm-fixed-price contract offers cost predictability.
Supports key international defense relationships.

Sector Analysis

This procurement is within the defense electronics and guided missile manufacturing sector. Spending benchmarks for similar advanced munitions systems vary widely, but this award aligns with significant investments in precision-guided munitions.

Small Business Impact

This contract was awarded directly to BAE Systems, a large prime contractor, and does not indicate any subcontracting opportunities for small businesses within the provided data. Further analysis would be needed to determine potential small business participation.

Oversight & Accountability

The Department of the Navy, under the Department of Defense, is the contracting activity. Oversight will focus on contract performance, delivery schedules, and adherence to the firm-fixed-price terms.

Related Government Programs

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

Risk Flags

Sole-source award
Potential for price escalation in future contracts
Supply chain dependency on a single manufacturer
Limited visibility into small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $322.5 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. PROCUREMENT OF 11,000 APKWS FRP-13 WGU-59A/B GUIDANCE SECTIONS USN (2,334) US ARMY (503) BAHRAIN (60) CZECH REPUBLIC (600) POLAND (7,058) SINGAPORE (96) AND SDAF (349).

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 $322.5 million.

What is the period of performance?

Start: 2025-08-21. End: 2027-08-31.

What is the projected long-term cost-effectiveness of relying on a sole-source provider for APKWS guidance sections?

The long-term cost-effectiveness of a sole-source provider is often a concern. While the current firm-fixed-price contract offers immediate cost certainty, the absence of competition could lead to price increases in future contract modifications or follow-on procurements. The government may need to explore alternative sourcing strategies or robust negotiation tactics to mitigate potential long-term cost escalations.

What are the risks associated with a sole-source procurement for critical defense components like APKWS guidance sections?

The primary risk of a sole-source procurement is the lack of competitive pressure, which can lead to inflated prices and reduced innovation. It also creates a dependency on a single supplier, making the supply chain vulnerable to disruptions, quality issues, or the supplier's business decisions. This can impact readiness and national security if the component is critical.

How does this procurement contribute to the overall effectiveness and readiness of US and allied forces?

This procurement directly enhances the effectiveness and readiness of US and allied forces by providing a significant quantity of advanced guidance sections for the APKWS (Advanced Precision Kill Weapon System). This system allows for the conversion of standard unguided rockets into precision munitions, increasing lethality and reducing collateral damage, thereby improving mission success rates and operational flexibility.

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: N0001923R0096

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: $322,465,000

Exercised Options: $322,465,000

Current Obligation: $322,465,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001925D0018

IDV Type: IDC

Timeline