DoD's $19.7M contract for 57mm cartridges awarded to BAE Systems without competition
Contract Overview
Contract Amount: $19,718,152 ($19.7M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2008-09-17
End Date: 2011-05-31
Contract Duration: 986 days
Daily Burn Rate: $20.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CARTRIDGE 57MM
Plain-Language Summary
Department of Defense obligated $19.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: CARTRIDGE 57MM Key points: 1. Significant spending on ammunition, specifically 57mm cartridges. 2. Sole-source award to BAE Systems raises questions about price discovery. 3. Contract duration of 986 days suggests a substantial supply need. 4. Lack of competition may lead to inflated costs for taxpayers.
Value Assessment
Rating: questionable
The contract value of $19.7M for 57mm cartridges lacks a clear per-unit cost benchmark for comparison. Without competitive bidding, it's difficult to assess if the pricing is reasonable against market rates or similar government procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This method limits price discovery and potentially allows the contractor to set prices without market pressure, which can be disadvantageous for the government.
Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may be paying a premium for these 57mm cartridges, as there was no mechanism to ensure the lowest possible price was obtained.
Public Impact
Taxpayers may be overpaying for essential military ammunition due to a lack of competitive bidding. The Department of the Navy's reliance on a single supplier for this munition could create future supply chain vulnerabilities. Lack of transparency in the sole-source award process hinders public understanding of defense spending efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Limited transparency
Positive Signals
- Essential defense procurement
- Established contractor relationship
Sector Analysis
The defense sector frequently procures ammunition, with spending benchmarks varying widely based on caliber and quantity. This $19.7M contract for 57mm cartridges falls within the typical range for specialized munitions, but the lack of competition is a key concern.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract. The award to a large prime contractor like BAE Systems suggests that opportunities for small business participation were likely minimal or non-existent.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure that the pricing is fair and that the government received the best value possible. A review of the justification for the sole-source award would be beneficial.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks transparency.
- Potential for inflated pricing due to no competition.
- Limited opportunity for small business participation.
- Risk of supply chain dependency on a single vendor.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. CARTRIDGE 57MM
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 $19.7 million.
What is the period of performance?
Start: 2008-09-17. End: 2011-05-31.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent and compelling needs. Without access to the specific contract file, the exact reason remains unknown, but it is a critical factor in assessing the value and necessity of this procurement.
How does the per-unit cost of these 57mm cartridges compare to similar procurements or market prices, given the lack of competition?
Without competitive bidding, it is challenging to establish a reliable per-unit cost benchmark. The absence of competition means there was no market pressure to drive down prices. A thorough cost analysis by the agency, or a post-award review by an oversight body, would be necessary to determine if the price paid was reasonable compared to potential market alternatives or historical data for similar items.
What is the potential long-term impact on the Department of the Navy's supply chain and readiness if this sole-source relationship continues?
A continued sole-source relationship for critical munitions like 57mm cartridges could create supply chain vulnerabilities. Over-reliance on a single supplier may reduce flexibility, increase lead times, and make the Navy susceptible to price increases or supply disruptions. Diversifying the supplier base or fostering competition, where feasible, would enhance long-term readiness and cost-effectiveness.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0016407R4275
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, 55421
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: $19,720,120
Exercised Options: $19,720,120
Current Obligation: $19,718,152
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-09-17
Current End Date: 2011-05-31
Potential End Date: 2011-05-31 00:00:00
Last Modified: 2019-10-02
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