Navy awards $56.5M for MK-13 MOD 0 CANISTERS to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $56,499,984 ($56.5M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2009-09-03

End Date: 2012-02-28

Contract Duration: 908 days

Daily Burn Rate: $62.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK-13 MOD 0 CANISTERS

Place of Performance

Location: ABERDEEN, BROWN County, SOUTH DAKOTA, 57401

State: South Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $56.5 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: MK-13 MOD 0 CANISTERS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 908 days suggests a significant, long-term need. 3. Awarded for specialized missile parts, indicating a niche but critical defense requirement. 4. Fixed-price contract type aims to control costs for the government. 5. The contractor, BAE Systems, is a major defense manufacturer with extensive experience. 6. Geographic location of performance in South Dakota may have local economic implications.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific product. Without competitive bids, it's difficult to ascertain if the $56.5 million represents optimal value for money. The fixed-price structure provides some cost control, but the lack of competition means the government relies heavily on the contractor's pricing integrity. Further analysis would require comparing the unit cost of the MK-13 MOD 0 CANISTERS to similar components or historical pricing for this specific item, which is not readily available in the provided data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, BAE Systems Land & Armaments L.P., was considered. This typically occurs when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for multiple companies to bid, potentially leading to higher prices than if a competitive bidding process had been employed.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in less favorable terms for taxpayers compared to fully competed contracts.

Public Impact

The primary beneficiaries are the U.S. Navy warfighters who will utilize the MK-13 MOD 0 CANISTERS in their operations. The contract delivers essential components for guided missile systems, crucial for national defense. Performance is expected in South Dakota, potentially creating or sustaining jobs in that region. The contract supports the specialized manufacturing sector within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in pricing justification due to non-competitive nature.
Potential for cost overruns if contractor pricing is not rigorously scrutinized.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
BAE Systems is an established defense contractor with proven capabilities.
Contract addresses a specific, likely critical, component for naval operations.

Sector Analysis

The 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector is a specialized segment of the aerospace and defense industry. This contract for MK-13 MOD 0 CANISTERS falls within this niche, supplying critical components for naval defense systems. The market for such specialized parts is often characterized by high barriers to entry due to technical expertise, stringent quality requirements, and long development cycles. Spending in this sector is directly tied to defense budgets and strategic priorities, with major players like BAE Systems dominating.

Small Business Impact

This contract was not set aside for small businesses, nor does the provided data indicate any subcontracting plans specifically targeting small businesses. As a sole-source award to a large defense contractor, the direct impact on the small business ecosystem is likely minimal unless BAE Systems voluntarily engages small businesses in its supply chain for this specific contract. Further investigation into BAE's subcontracting practices would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, there is an increased emphasis on robust oversight to ensure fair pricing and adherence to contract terms. The Defense Contract Audit Agency (DCAA) may also be involved in auditing costs if deemed necessary. Transparency is limited by the non-competitive nature, but contract performance reports and milestone tracking would be key accountability measures.

Related Government Programs

Guided Missile Parts Manufacturing
Naval Ordnance
Defense Logistics Agency (DLA) Support
Aerospace Component Manufacturing

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price escalation without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.5 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. MK-13 MOD 0 CANISTERS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $56.5 million.

What is the period of performance?

Start: 2009-09-03. End: 2012-02-28.

What is the historical spending pattern for MK-13 MOD 0 CANISTERS by the Department of the Navy?

The provided data only details a single contract award of $56.5 million to BAE Systems from September 3, 2009, to February 28, 2012. Without access to broader contract databases or historical procurement records, it is impossible to determine the complete historical spending pattern for MK-13 MOD 0 CANISTERS. This single award suggests a specific procurement event rather than an ongoing, high-volume requirement. To understand historical spending, one would need to search for previous contracts for the same item, potentially under different contract numbers or with different awardees if the sole-source justification was not consistently applied.

How does the unit cost of the MK-13 MOD 0 CANISTERS compare to similar components?

A direct unit cost comparison for the MK-13 MOD 0 CANISTERS is not feasible with the given data. The total award amount is $56,499,984, and the number of units is not specified. Furthermore, the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' category is broad, and 'MK-13 MOD 0 CANISTERS' refers to a very specific part. Without knowing the quantity purchased under this contract or having access to pricing data for comparable missile canisters or related components from other defense contracts, a meaningful benchmark cannot be established. The sole-source nature of this award also complicates direct price comparisons.

What is BAE Systems Land & Armaments L.P.'s track record with the Department of the Navy for similar components?

BAE Systems Land & Armaments L.P. is a major defense contractor with a significant history of supplying various components and systems to the Department of the Navy and other military branches. While this specific contract is for 'MK-13 MOD 0 CANISTERS,' BAE Systems is known for producing a wide range of ordnance, vehicle systems, and naval components. Their track record generally includes large-scale production, integration, and sustainment services for complex defense platforms. Specific performance details for this contract, such as on-time delivery or quality adherence, would typically be found in internal Navy performance reports (e.g., CPARS), which are not publicly available in this dataset. However, their continued presence as a prime contractor suggests a generally satisfactory performance history.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, the government has less leverage to negotiate favorable terms, and the contractor may not feel the same pressure to optimize costs. Another risk is vendor lock-in; if the MK-13 MOD 0 CANISTER is a unique or proprietary component, the Navy may become dependent on BAE Systems for future needs, potentially at prices determined solely by the contractor. Furthermore, sole-source awards can sometimes indicate a lack of robust market research or planning, although in defense, specific technological requirements can necessitate such awards. Ensuring fair and reasonable pricing through rigorous negotiation and oversight is critical to mitigate these risks.

How does the contract duration (908 days) impact the overall value and risk?

The contract duration of 908 days (approximately 2.5 years) suggests a sustained need for the MK-13 MOD 0 CANISTERS, indicating that these are not short-term or one-off procurements. A longer duration can offer value by providing production stability for the contractor and ensuring a consistent supply chain for the Navy, potentially leading to economies of scale if production volumes are high. However, it also extends the period during which the government is exposed to the risks inherent in a sole-source award, particularly regarding pricing. If market conditions or technological requirements change significantly during this period, the fixed-price nature might become less advantageous if costs escalate unexpectedly for the contractor, or conversely, if a more competitive market emerges, the government might be locked into a less optimal price.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002409R5317

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 4800 E RIVER RD, MINNEAPOLIS, MN, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $56,499,984

Exercised Options: $56,499,984

Current Obligation: $56,499,984

Contract Characteristics

Cost or Pricing Data: YES

Timeline