DoD awards BAE Systems $43.2M for AN/SQQ-32(V)4 sonar systems, with a 3-year performance period

Contract Overview

Contract Amount: $43,177,870 ($43.2M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2010-09-23

End Date: 2016-01-21

Contract Duration: 1,946 days

Daily Burn Rate: $22.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SQQ-32(V)4 SYSTEM (SEE NOTE A)

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $43.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: AN/SQQ-32(V)4 SYSTEM (SEE NOTE A) Key points: 1. The contract value of $43.2M for the AN/SQQ-32(V)4 system appears reasonable given the specialized nature of naval sonar equipment. 2. Competition was conducted under 'full and open competition after exclusion of sources,' suggesting a potentially limited but justified bidding process. 3. The firm-fixed-price contract type generally transfers risk to the contractor, which can be beneficial for cost predictability. 4. Performance duration of 1946 days (approximately 5.3 years) indicates a long-term need for these systems. 5. The contract's focus on search, detection, navigation, guidance, and related instruments places it within a critical defense technology sector. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: good

The award of $43.2 million for the AN/SQQ-32(V)4 system to BAE Systems is within a typical range for specialized defense electronics. Without direct comparable contract data for this specific system, benchmarking is challenging. However, the firm-fixed-price structure suggests that the government has secured a defined cost for the deliverables, which is a positive indicator of value. The duration of the contract also implies a sustained need, potentially allowing for economies of scale if future procurements follow.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This indicates that while the competition was intended to be open, certain sources were excluded, possibly due to specific technical requirements, security clearances, or prior performance. The number of bidders (3) is relatively low, which could suggest a specialized market or that only a few entities met the stringent criteria. This level of competition may limit price discovery compared to a broader, unrestricted competition.

Taxpayer Impact: While the competition was not fully unrestricted, the inclusion of multiple bidders (3) likely prevented a sole-source situation, offering some level of price negotiation for taxpayers. The exclusion of sources warrants further scrutiny to ensure it was justified and did not unduly limit competition.

Public Impact

The primary beneficiaries are the U.S. Navy, receiving advanced sonar systems crucial for maritime operations. The contract delivers specialized equipment for search, detection, navigation, and guidance, enhancing naval situational awareness and mission effectiveness. Geographic impact is primarily within defense installations and naval bases where these systems will be deployed and maintained. Workforce implications include specialized manufacturing, engineering, and technical support roles at BAE Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition type requires careful review to ensure it was necessary and did not unnecessarily restrict competition.
Limited number of bidders (3) may indicate a concentrated market, potentially leading to higher prices over time if competition further erodes.
Lack of specific details on performance metrics makes it difficult to assess the contractor's track record and the system's effectiveness beyond the award itself.

Positive Signals

Firm-fixed-price contract type generally provides cost certainty for the government.
The contract duration of nearly 2000 days suggests a stable, long-term requirement, allowing for potential efficiencies in production and support.
BAE Systems is a major defense contractor with established expertise in electronic systems, suggesting a lower risk of technical failure.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the manufacturing of advanced electronic systems for naval applications. The market for specialized sonar and detection equipment is typically dominated by a few large, technologically advanced defense contractors. Spending in this sub-sector is driven by national security priorities and the continuous need to upgrade aging platforms and counter evolving threats. Comparable spending benchmarks would involve other major naval system procurements, which often run into tens or hundreds of millions of dollars.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor, BAE Systems, is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this award. The impact on the small business ecosystem is likely minimal unless BAE Systems voluntarily includes small businesses in its subcontracting efforts for components or specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which ensures compliance with contract terms, quality standards, and delivery schedules. Accountability measures are embedded in the firm-fixed-price structure, which incentivizes the contractor to meet cost and performance targets. Transparency is facilitated through contract award databases, though detailed performance reports may be restricted due to national security considerations.

Related Government Programs

Naval Surface Warfare Systems
Naval Undersea Warfare Systems
Defense Electronic Systems Manufacturing
Sonar and Acoustic Systems Procurement
Department of Defense Research and Development

Risk Flags

Limited Competition
Potential for Increased Cost due to Source Exclusion
Lack of Detailed Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.2 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. AN/SQQ-32(V)4 SYSTEM (SEE NOTE A)

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 $43.2 million.

What is the period of performance?

Start: 2010-09-23. End: 2016-01-21.

What is the specific technical capability of the AN/SQQ-32(V)4 system and how does it compare to previous versions or competing technologies?

The AN/SQQ-32(V)4 system is a variant of the AN/SQQ-32 Sonar system, which is a mine-hunting sonar used by the U.S. Navy. The (V)4 designation typically indicates a specific configuration or upgrade. These systems are designed for detecting and classifying underwater mines and obstacles, crucial for ensuring safe navigation for naval vessels. Compared to earlier versions, the (V)4 likely incorporates improved processing capabilities, enhanced target discrimination, and potentially greater range or resolution. Competing technologies might include other advanced sonar systems from international suppliers or different domestic manufacturers, each with varying strengths in areas like signal processing, power efficiency, and environmental adaptability. Specific technical specifications are often classified, but the system's role is critical for mine countermeasures operations.

How does the $43.2 million contract value compare to historical spending on similar sonar systems or previous AN/SQQ-32 variants?

Benchmarking the $43.2 million award requires access to historical contract data for the AN/SQQ-32 family of systems or comparable mine-hunting sonar. Without specific historical data points for this exact variant, a direct comparison is difficult. However, major defense systems, especially those involving advanced electronics and specialized naval applications, often involve multi-million dollar contracts. The duration of the contract (over 1900 days) suggests a significant scope of work, potentially including production, integration, testing, and support. If previous procurements of similar systems were in the tens of millions, this award appears consistent. However, a detailed analysis would necessitate comparing unit costs, quantities, and contract types across different award periods to identify any significant deviations or trends in pricing.

What are the key performance indicators (KPIs) used to evaluate BAE Systems' performance under this contract, and what are the penalties for non-performance?

Specific Key Performance Indicators (KPIs) for the AN/SQQ-32(V)4 system contract are not publicly detailed in the provided data. However, for firm-fixed-price contracts of this nature, performance is typically evaluated based on adherence to the contract's technical specifications, delivery schedules, and quality standards. KPIs would likely include metrics related to detection range, classification accuracy, system reliability (Mean Time Between Failures - MTBF), and successful integration with naval platforms. Penalties for non-performance under a firm-fixed-price contract are usually tied to liquidated damages for late delivery or failure to meet critical technical specifications, potentially leading to contract termination or withholding of payments. The contract's specific terms would outline these details.

Given the 'exclusion of sources' clause, what justification was provided, and could this have led to a higher price for taxpayers?

The justification for 'exclusion of sources' is typically based on specific, compelling reasons such as unique technical capabilities, proprietary technology, essential security requirements, or the need for interoperability with existing systems that only a limited number of contractors can meet. Without the specific justification document, it's impossible to know the exact rationale. However, excluding sources inherently limits competition. If the exclusion was not strictly necessary or if alternative solutions existed, it could potentially lead to a higher price for taxpayers by reducing the number of competitive bids. Conversely, if the exclusion was essential for acquiring a critical capability that only one or a few firms possess, it might be a necessary trade-off to ensure mission success, even if it means a potentially higher cost than a broader competition.

What is the track record of BAE Systems in delivering complex electronic systems for the Department of Defense, particularly naval systems?

BAE Systems has a long and extensive track record as a major defense contractor, with significant experience in developing and producing complex electronic systems for various branches of the U.S. military, including the Navy. They are involved in numerous programs related to naval combat systems, electronic warfare, communications, and sensor technology. Their history includes delivering sophisticated systems for warships, submarines, and aircraft. While specific performance details on every contract are not always public, BAE Systems is generally considered a capable and reliable supplier of advanced defense technology. However, like any large contractor, they may have faced challenges or criticisms on specific projects, underscoring the importance of ongoing contract oversight.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ALTERNATIVE SOURCES

Solicitation ID: N0002410R6302

Offers Received: 3

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: $51,238,701

Exercised Options: $43,191,270

Current Obligation: $43,177,870

Subaward Activity

Number of Subawards: 83

Total Subaward Amount: $14,494,438

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline