Navy awards $44.9M contract for MK 29 MOD 0/1 CANISTERS, with BAE Systems as prime

Contract Overview

Contract Amount: $44,871,840 ($44.9M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2025-04-29

End Date: 2030-04-11

Contract Duration: 1,808 days

Daily Burn Rate: $24.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK 29 MOD 0/1 CANISTERS WITH PHS&T

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $44.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: MK 29 MOD 0/1 CANISTERS WITH PHS&T Key points: 1. Contract value of $44.9 million for specialized canisters suggests a significant investment in naval ordnance. 2. The award to BAE Systems, a major defense contractor, indicates reliance on established industry players for critical components. 3. A firm-fixed-price contract structure aims to control costs and provide predictability for the Navy. 4. The duration of the contract (over 5 years) points to a long-term need for these canisters. 5. The manufacturing NAICS code (332999) places this within the broader fabricated metal products sector.

Value Assessment

Rating: good

The contract value of $44.9 million for MK 29 MOD 0/1 CANISTERS appears reasonable given the specialized nature of defense equipment and the long-term commitment. Without specific per-unit cost data or direct comparisons to similar canister systems, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure suggests an effort to manage costs effectively. The award to a single, established contractor like BAE Systems often reflects a balance between cost and proven capability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of three bids suggests a competitive environment, which typically benefits price discovery and can lead to more favorable terms for the government. The specific number of bidders (3) is a moderate level of competition for a specialized defense item.

Taxpayer Impact: Full and open competition generally ensures that taxpayers receive the best possible pricing by allowing all qualified vendors to participate, fostering a market-driven cost structure.

Public Impact

Naval forces will benefit from the supply of essential ordnance canisters, crucial for operational readiness. The contract supports the production of specialized metal fabrication, contributing to the defense industrial base. The geographic impact is primarily within the United States, supporting domestic manufacturing and supply chains. Workforce implications include skilled labor in metal fabrication and defense manufacturing at BAE Systems' facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if material or labor costs escalate beyond fixed-price projections.
Dependence on a single contractor for a critical component could pose supply chain risks if not managed proactively.
Ensuring consistent quality control over a multi-year production run requires robust oversight.

Positive Signals

Firm-fixed-price contract provides cost certainty for the Department of the Navy.
Award to an experienced defense contractor like BAE Systems suggests a high likelihood of meeting technical specifications.
Full and open competition indicates a deliberate effort to secure competitive pricing.

Sector Analysis

This contract falls within the fabricated metal products manufacturing sector, specifically serving the defense industry's need for ordnance handling and storage. The market for defense-related metal fabrication is substantial, driven by ongoing military modernization and operational requirements. Comparable spending benchmarks would involve other contracts for ammunition components, missile canisters, or specialized protective casings for military equipment.

Small Business Impact

The contract data indicates that small business participation is not a primary focus, as the prime contractor is BAE Systems, a large corporation, and the contract was not set aside for small businesses. There is no explicit mention of subcontracting goals for small businesses within the provided data. This suggests that the primary benefits for small businesses would be indirect, through potential supply chain opportunities with BAE Systems, rather than direct contract awards.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price structure, which incentivizes the contractor to meet cost targets. Transparency is generally maintained through contract award databases, though specific production details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ordnance Systems
Ammunition Handling and Storage
Defense Industrial Base Manufacturing
Fabricated Metal Product Manufacturing

Risk Flags

Long contract duration increases exposure to market volatility.
Dependence on a single large contractor for critical components.
Potential for cost creep if raw material prices increase significantly.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. MK 29 MOD 0/1 CANISTERS WITH PHS&T

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 $44.9 million.

What is the period of performance?

Start: 2025-04-29. End: 2030-04-11.

What is the historical spending pattern for MK 29 MOD 0/1 CANISTERS by the Department of the Navy?

Historical spending data for specific components like the MK 29 MOD 0/1 CANISTERS is often not publicly detailed in aggregate. However, the Department of the Navy consistently invests significant sums in ordnance and related support equipment. Annual budgets for naval aviation, surface warfare, and expeditionary forces include line items for munitions, their associated handling systems, and protective containers. The $44.9 million awarded in this contract represents a substantial, multi-year investment, suggesting either a ramp-up in production, replacement of aging inventory, or a new requirement. Analyzing broader defense spending trends for similar ordnance components or canister systems over the past 5-10 years would provide context, showing a general upward or stable trend in procurement for readiness and modernization efforts.

How does the per-unit cost of these canisters compare to similar defense equipment?

Determining the precise per-unit cost for the MK 29 MOD 0/1 CANISTERS is not possible with the provided data, as only the total contract value and duration are available. However, defense-related hardware, especially specialized items like ordnance canisters, typically carries a higher per-unit cost than commercial equivalents due to stringent quality control, material specifications, testing requirements, and the relatively lower production volumes. For context, similar specialized containers or protective casings for military equipment can range from hundreds to thousands of dollars per unit, depending on size, material, and protective features. Without specific unit counts or detailed specifications, a direct benchmark is difficult, but the total contract value suggests a significant per-unit cost, reflecting the specialized nature and defense application.

What are the key performance indicators (KPIs) for this contract, and how will they be measured?

Key performance indicators for this contract would likely revolve around delivery schedules, quality standards, and adherence to technical specifications. The Department of the Navy would establish specific metrics for on-time delivery of canisters, ensuring that production milestones are met to support operational needs. Quality would be assessed through rigorous inspection and testing protocols to verify that each canister meets the demanding requirements for durability, environmental resistance, and compatibility with the ordnance it is designed to hold. Technical specifications would cover dimensions, material composition, and performance under various operational conditions. Failure to meet these KPIs could result in contract penalties, rejection of goods, or termination, depending on the severity of the deviation.

What is BAE Systems' track record with similar defense contracts, particularly for ordnance components?

BAE Systems Land & Armaments L.P. has a well-established and extensive track record in the defense sector, including significant experience with ordnance systems, vehicle components, and related support equipment. As a major defense contractor, they are frequently awarded contracts for the manufacturing and supply of critical military hardware. Their portfolio often includes components for artillery systems, missile launchers, and protective casings for various platforms. While specific details on contracts for 'MK 29 MOD 0/1 CANISTERS' are not publicly itemized, BAE Systems' general performance in delivering complex defense manufacturing projects on time and to specification is a key factor in their continued success in securing such awards. Their history suggests a capability to manage large-scale production and meet stringent military requirements.

What are the potential risks associated with the long duration (over 5 years) of this contract?

The extended duration of this contract (1808 days, approximately 5 years) presents several potential risks. Firstly, there's the risk of cost escalation; while it's a firm-fixed-price contract, unforeseen increases in raw material prices or labor costs over such a long period can impact the contractor's profitability and potentially lead to requests for contract modifications or performance issues if margins become too thin. Secondly, technological obsolescence is a risk; defense technology evolves rapidly, and there's a possibility that the canisters could become less relevant or superseded by newer designs during the contract's lifespan, although this is less likely for fundamental components like canisters. Thirdly, supply chain disruptions are a concern; a prolonged contract increases exposure to potential issues with sub-tier suppliers, geopolitical events, or natural disasters that could impact material availability or delivery schedules. Finally, maintaining consistent quality and performance over many years requires sustained oversight and contractor commitment.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › All Other Miscellaneous Fabricated Metal Product Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002423R5324

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: 4800 E RIVER RD, MINNEAPOLIS, MN, 55421

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

Financial Breakdown

Contract Ceiling: $340,510,472

Exercised Options: $44,871,840

Current Obligation: $44,871,840

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline