DoD awards $56M for MK 110 MOD 0 Gun Mounts to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $55,999,292 ($56.0M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2017-08-14

End Date: 2022-11-28

Contract Duration: 1,932 days

Daily Burn Rate: $29.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 57MM MK 110 MOD 0 GUN MOUNT

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40214

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $56.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: 57MM MK 110 MOD 0 GUN MOUNT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of 1932 days suggests a significant program. 3. Firm Fixed Price contract type aims to control costs. 4. No small business set-aside, potentially impacting small business participation. 5. Awarded by the Department of Defense, indicating a defense-related procurement. 6. The procurement is for small arms and ordnance accessories.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for the MK 110 MOD 0 Gun Mount. The firm fixed price structure is a positive sign for cost control. However, the lack of competition inherent in a sole-source award raises concerns about whether the government achieved the best possible price. Further analysis would require understanding the unique nature of this system and the justification for sole-sourcing.

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 solicited. This typically occurs when a specific item is proprietary, or there are unique capabilities required that only one contractor can provide. The lack of competition means the government did not benefit from a competitive bidding process, which could lead to higher prices than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The justification for sole-sourcing needs to be robust to ensure this was the most responsible approach.

Public Impact

The primary beneficiaries are the U.S. military branches requiring the MK 110 MOD 0 Gun Mount for their operations. The contract delivers essential components for naval gun systems, crucial for defense capabilities. The contract is managed by the Defense Contract Management Agency, indicating a focus on defense readiness. The workforce implications are likely within BAE Systems' manufacturing and engineering divisions, potentially in Kentucky where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Long contract duration could indicate potential for cost overruns if not managed tightly.
Lack of small business set-aside may limit opportunities for smaller firms in the supply chain.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Award to an established defense contractor suggests a focus on proven capabilities.
The contract is for a specific, likely critical, defense system.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of ordnance and weapon systems. The market for such specialized military hardware is often characterized by limited suppliers due to high technological barriers, stringent quality requirements, and government procurement processes. Comparable spending benchmarks are difficult to establish for unique weapon systems, but overall defense spending on armaments is substantial, with significant portions allocated to sole-source or limited-competition contracts for specialized equipment.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no subcontracting goals were specified. This means that opportunities for small businesses to participate in this contract, either as prime contractors or subcontractors, were not explicitly prioritized. The primary contractor, BAE Systems, is a large defense firm, and while they may engage small businesses in their supply chain, it is not a mandated requirement of this specific award. This could limit the direct economic impact on the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of Defense's contracting and program management offices, with the Defense Contract Management Agency (DCMA) playing a key role in administration and surveillance. Accountability measures would be embedded in the contract terms, including performance metrics and payment schedules tied to delivery. Transparency is generally limited for sole-source defense contracts, with justifications often classified or restricted. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Gun Systems
Ordnance Manufacturing
Defense Procurement
BAE Systems Contracts
Sole-Source Defense Awards

Risk Flags

Sole-source award raises concerns about price reasonableness.
Lack of competition may limit innovation and efficiency.
Long contract duration requires diligent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 57MM MK 110 MOD 0 GUN MOUNT

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $56.0 million.

What is the period of performance?

Start: 2017-08-14. End: 2022-11-28.

What is the specific justification for awarding this contract on a sole-source basis to BAE SYSTEMS LAND & ARMAMENTS L.P.?

The justification for a sole-source award typically stems from factors such as unique technical capabilities, proprietary technology, or the unavailability of other sources that can meet the government's requirements. For the MK 110 MOD 0 Gun Mount, it is probable that BAE Systems holds the intellectual property rights or possesses specialized manufacturing processes essential for this particular system. The Department of Defense would have a formal justification document outlining these reasons, often citing Federal Acquisition Regulation (FAR) Part 6, which details conditions under which full and open competition is not required. Without access to this specific justification, it's presumed that the system's complexity or proprietary nature made competitive bidding impractical or impossible.

How does the firm fixed price (FFP) contract type mitigate risks for the government in this sole-source scenario?

A Firm Fixed Price (FFP) contract is designed to provide the government with cost certainty by obligating the contractor to a set price regardless of the actual costs incurred. In a sole-source situation, where competitive pressure is absent, the FFP structure is particularly important. It shifts the risk of cost overruns entirely to the contractor, incentivizing them to manage their expenses efficiently to maintain profitability. While the initial price might be higher due to the lack of competition, the FFP structure prevents the government from being liable for unexpected increases in the contractor's costs during performance, offering a degree of predictability in overall expenditure for the MK 110 MOD 0 Gun Mount.

What is the historical spending pattern for MK 110 MOD 0 Gun Mounts by the Department of Defense?

Analyzing historical spending patterns for the MK 110 MOD 0 Gun Mount requires access to detailed contract databases beyond the single award provided. This specific award of approximately $56 million covers a period from August 2017 to November 2022. To understand the broader historical context, one would need to search for previous contracts for this specific gun mount system, including any earlier development, production, or sustainment contracts awarded to BAE Systems or other potential manufacturers. It's also important to consider if this is a new system or an upgrade to an existing one, as this would influence the spending trajectory. Without more data points, it's difficult to ascertain if this $56 million represents a typical annual spend, a one-time large procurement, or part of a larger, multi-year program.

What are the potential performance implications of awarding this contract to a single supplier?

Awarding a critical defense system like the MK 110 MOD 0 Gun Mount to a single supplier can have mixed performance implications. On the positive side, it allows for a deep, focused relationship with the contractor, potentially leading to optimized production processes and a thorough understanding of the system's intricacies by the supplier. This can result in high-quality, reliable equipment. However, the lack of competition can reduce the incentive for the sole supplier to innovate or improve performance beyond contractual minimums, as there is no competitive threat. Furthermore, the government becomes heavily reliant on this single source, creating a vulnerability if the contractor experiences production issues, financial instability, or decides to exit the market.

Are there any known issues or concerns regarding BAE SYSTEMS LAND & ARMAMENTS L.P.'s performance on similar defense contracts?

Assessing BAE SYSTEMS LAND & ARMAMENTS L.P.'s performance on similar defense contracts would require a comprehensive review of their contract history, including past performance evaluations, any reported disputes, or contract terminations. BAE Systems is a major global defense contractor with a vast portfolio of contracts across various military platforms. While specific performance issues related to this particular gun mount system are not detailed in the provided data, large contractors can face challenges related to schedule delays, cost overruns (even in FFP contracts if scope changes), or quality control on complex projects. Publicly available contract databases and performance reports, if accessible, would offer insights into their track record. However, without specific data on past performance for this contract or similar ordnance systems, a definitive assessment cannot be made.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002417R5375

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 4800 E RIVER RD, MINNEAPOLIS, MN, 55421

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $55,999,292

Exercised Options: $55,999,292

Current Obligation: $55,999,292

Actual Outlays: $7,696,236

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $407,047

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline