DoD's $70.4M T-1687 Transmitter Countermeasure contract awarded to BAE Systems without competition

Contract Overview

Contract Amount: $70,402,534 ($70.4M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2018-08-16

End Date: 2021-03-21

Contract Duration: 948 days

Daily Burn Rate: $74.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: T-1687 TRANSMITTER COUNTERMEASURE

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $70.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: T-1687 TRANSMITTER COUNTERMEASURE Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 948 days suggests a significant, ongoing need for the specified equipment. 3. The broad NAICS code 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' lacks specificity for detailed sector analysis. 4. Fixed-price contract type aims to control costs, but the lack of competition may negate this benefit. 5. Awarded by the Department of the Navy, indicating a defense-specific application for the countermeasure system.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable sole-source awards for the T-1687 Transmitter Countermeasure. The total value of $70.4 million over approximately 2.5 years suggests a substantial investment. Without competitive bidding, it is difficult to ascertain if the pricing reflects fair market value or if taxpayers received the best possible price. The absence of competition raises concerns about potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one bidder, BAE Systems Information and Electronic Systems Integration Inc., was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple companies submitting proposals. The lack of competition means there was no direct comparison of offers, potentially leading to less favorable pricing for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, which can result in higher costs for taxpayers compared to competitively awarded contracts.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Navy, which receives advanced transmitter countermeasure technology. The contract delivers critical electronic warfare capabilities essential for naval operations and force protection. The geographic impact is primarily within the defense sector, supporting national security objectives. Workforce implications may include specialized roles in manufacturing, engineering, and logistics at BAE Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns due to absence of competitive benchmarking.
Broad NAICS code obscures specific industry segment and potential for specialized competition.

Positive Signals

Firm Fixed Price contract type provides cost certainty if managed effectively.
Award to an established defense contractor (BAE Systems) suggests potential for reliable delivery.
Contract addresses a specific defense need for electronic warfare capabilities.

Sector Analysis

The defense electronics sector is characterized by high R&D costs, long product lifecycles, and significant government procurement. Contracts for electronic warfare systems, such as transmitter countermeasures, are crucial for maintaining technological superiority. The market is often dominated by a few large, specialized contractors like BAE Systems. Spending in this area is driven by evolving threat landscapes and the need for advanced defensive and offensive capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, BAE Systems, is a large defense corporation. There is no explicit information regarding subcontracting plans to small businesses within this award notice. This suggests that the primary economic impact for small businesses would be indirect, through potential tier-2 or tier-3 supply chain opportunities, rather than direct set-aside awards.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods within the agreed price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Electronic Warfare Systems
Naval Communications Equipment
Defense Electronics Manufacturing
Countermeasure Systems
Department of the Navy Procurement

Risk Flags

Sole-source award raises concerns about competition and potential price inflation.
Lack of detailed public information on the specific system hinders independent value assessment.
Broad NAICS code may obscure the specific market segment and competitive landscape.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. T-1687 TRANSMITTER COUNTERMEASURE

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $70.4 million.

What is the period of performance?

Start: 2018-08-16. End: 2021-03-21.

What is the specific technical capability of the T-1687 Transmitter Countermeasure, and why was it deemed essential by the Department of the Navy?

The T-1687 Transmitter Countermeasure is a specialized electronic warfare system designed to detect, identify, and potentially neutralize or disrupt hostile radar and communication signals. Its essentiality stems from the need to protect naval assets (ships, aircraft) from enemy surveillance and targeting systems. In modern warfare, electronic countermeasures are critical for maintaining situational awareness, ensuring mission success, and safeguarding personnel by denying adversaries the use of the electromagnetic spectrum. The specific technical details are often classified due to national security implications, but its function is to provide a defensive electronic 'shield' or 'jamming' capability against threats.

What was the justification provided for awarding this contract on a sole-source basis to BAE Systems?

While the specific justification document is not provided in the abbreviated data, sole-source awards are typically granted when only one responsible source is available or capable of meeting the government's needs. This could be due to unique technological capabilities, proprietary rights, urgent and compelling circumstances where competition is not feasible, or if the item is a follow-on to a previously competed contract where only the original contractor can provide necessary integration or support. For a specialized system like a transmitter countermeasure, BAE Systems might possess unique intellectual property, specialized manufacturing expertise, or existing integration knowledge that makes them the only viable option without significant delays or cost increases.

How does the firm-fixed-price contract type interact with the sole-source award in terms of risk and potential cost savings?

A firm-fixed-price (FFP) contract aims to provide the government with cost certainty by obligating the contractor to complete the work for a predetermined price, regardless of the contractor's actual costs. This shifts the cost risk to the contractor. However, when combined with a sole-source award, the benefit of cost certainty is diminished. Without competition, the initial predetermined price might be set higher than it would be in a competitive environment. While the FFP structure prevents cost overruns *for the contractor*, it doesn't guarantee the government received the lowest possible price upfront, as there was no market pressure to drive the price down.

What is the typical lifecycle and upgrade path for electronic warfare systems like the T-1687 Transmitter Countermeasure?

Electronic warfare systems, including transmitter countermeasures, often have lifecycles tied to technological advancements and evolving threat environments. They typically require periodic upgrades or replacements to maintain effectiveness against new adversary capabilities. The lifecycle can range from 5 to 15 years or more, depending on the system's complexity and the pace of technological change. Upgrade paths often involve software enhancements, hardware module replacements, or complete system redesigns. Contracts like this one may represent an initial procurement, sustainment phase, or a specific upgrade, with future contracts anticipated for ongoing modernization.

Are there any publicly available benchmarks or historical spending data for similar transmitter countermeasure systems procured by the DoD?

Accessing direct, publicly available benchmarks for highly specialized and often classified defense systems like the T-1687 Transmitter Countermeasure is extremely difficult. Procurement data for such systems is frequently redacted or not detailed enough in public databases to allow for direct comparison. While aggregate spending on 'Electronic Warfare Systems' or 'Communications Equipment' can be found, pinpointing comparable per-unit costs or total contract values for systems with identical or similar functionalities is challenging. The sole-source nature of this award further complicates benchmarking, as there are no competitive bids to reference.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

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

Financial Breakdown

Contract Ceiling: $211,966,950

Exercised Options: $211,966,950

Current Obligation: $70,402,534

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0010416G0726

IDV Type: BOA

Timeline