DoD awards $37.1M for combat system workstations, a sole-source acquisition with a 1098-day duration

Contract Overview

Contract Amount: $37,123,252 ($37.1M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2025-08-29

End Date: 2028-08-31

Contract Duration: 1,098 days

Daily Burn Rate: $33.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACQUISITION OF COMBAT SYSTEM MISSION CREW WORKSTATIONS AND MISSION CREW WORKSTATION CONVERSION KITS

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $37.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: ACQUISITION OF COMBAT SYSTEM MISSION CREW WORKSTATIONS AND MISSION CREW WORKSTATION CONVERSION KITS Key points: 1. The contract focuses on essential combat system mission crew workstations and conversion kits, critical for naval operations. 2. A sole-source award indicates a lack of competitive bidding, potentially impacting price and innovation. 3. The extended duration of nearly three years suggests a long-term need for these specialized systems. 4. The acquisition is managed by the Department of the Navy, highlighting its importance for naval readiness. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The absence of small business set-aside flags suggests this contract is not specifically targeting smaller enterprises.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive data. The fixed-price nature provides some cost certainty for the government, but the lack of competition raises questions about whether the government is receiving the best possible price. Further analysis would require comparing the unit costs to similar systems procured competitively or through other means, which is not readily available in the provided data. The total award amount of $37.1 million over approximately three years suggests a significant investment in critical naval technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required supplies or services. The lack of competition means there were no other bidders to compare against, and the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process. This approach can lead to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the most cost-effective outcome. Without competitive pressure, the awarded price may not reflect the lowest possible cost, potentially leading to a less efficient use of public funds.

Public Impact

Naval personnel operating combat systems will benefit from updated and functional workstations. The contract ensures the continued operational readiness of critical naval combat systems. The geographic impact is primarily within the Department of the Navy's operational theaters. The acquisition supports specialized roles within the naval workforce responsible for operating and maintaining these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for vendor lock-in if alternative solutions are not explored.
Dependence on a single contractor for critical system components.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Ensures availability of critical mission crew workstations for naval operations.
Long-term contract duration provides stability for system sustainment.

Sector Analysis

This contract falls within the defense industrial sector, specifically focusing on the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems. The market for such specialized defense electronics is often characterized by high barriers to entry due to technological complexity and stringent security requirements. Spending in this area is driven by national security needs and the continuous modernization of military platforms. Comparable spending benchmarks would typically involve other large-scale defense electronics procurements for naval vessels or other military branches.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was likely awarded to a large defense contractor capable of meeting the specialized requirements. Consequently, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. However, the prime contractor may engage small businesses as subcontractors, but this is not mandated by the contract's structure.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Combat Systems
Defense Electronics Manufacturing
Mission Crew Systems
Naval Ship Systems

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Limited innovation incentive

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. ACQUISITION OF COMBAT SYSTEM MISSION CREW WORKSTATIONS AND MISSION CREW WORKSTATION CONVERSION KITS

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 $37.1 million.

What is the period of performance?

Start: 2025-08-29. End: 2028-08-31.

What is the historical spending pattern for combat system mission crew workstations and conversion kits by the Department of the Navy?

Analyzing historical spending patterns for this specific category requires access to comprehensive federal procurement databases. Without direct historical data for 'combat system mission crew workstations and conversion kits,' a proxy analysis would involve examining broader categories such as 'search, detection, navigation, guidance, aeronautical, and nautical system and instrument manufacturing' (NAICS 334511) or specific naval combat system procurements. The current award of $37.1 million over approximately three years provides a recent data point. To understand historical trends, one would look for recurring awards to the same or similar contractors, fluctuations in award values over time, and the frequency of such procurements. This would help determine if this $37.1 million award is consistent with, higher than, or lower than previous investments in similar capabilities, and whether spending has been increasing or decreasing.

What specific capabilities do these combat system mission crew workstations provide, and how do they compare to previous generations?

The provided data identifies the acquisition as 'COMBAT SYSTEM MISSION CREW WORKSTATIONS AND MISSION CREW WORKSTATION CONVERSION KITS.' These workstations are integral components of naval combat systems, likely providing the interface and processing power for personnel to operate and monitor various weapon systems, sensors, and tactical data. Specific capabilities would include data display, command and control functions, and potentially integration with other shipboard systems. Without detailed technical specifications, a direct comparison to previous generations is difficult. However, 'conversion kits' suggest an upgrade or modernization effort, implying that the new workstations offer enhanced performance, improved user interfaces, greater processing speed, or expanded functionality compared to older systems. This modernization is crucial for maintaining a technological edge in naval warfare.

Why was this contract awarded on a sole-source basis, and what are the implications for BAE Systems?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For BAE Systems Information and Electronic Systems Integration Inc., this implies they possess unique capabilities, proprietary technology, or are the sole authorized provider for these specific combat system workstations and conversion kits, possibly due to existing system integration or intellectual property rights. The implications for BAE Systems are a guaranteed contract without the pressure of competition, allowing them to focus on fulfilling the order. However, it also means they must adhere strictly to the terms of the Firm Fixed Price contract, managing their costs effectively to ensure profitability. The long duration suggests a stable revenue stream for this specific product line.

What is the typical profit margin for BAE Systems on similar sole-source defense contracts?

Determining the exact profit margin for BAE Systems on this specific contract is not possible with the provided data, as profit margins are proprietary and depend on numerous factors including cost structure, overhead, and negotiation. However, for defense contractors, profit margins can vary significantly. Sole-source contracts, while offering less competitive pressure, often have profit margins that are subject to government oversight and negotiation to ensure fair and reasonable pricing. Industry benchmarks for defense contracting profit margins can range from low single digits to the mid-teens, depending on the contract type, risk, and specific product or service. Given the Firm Fixed Price nature, BAE Systems would aim to maximize profit by controlling costs effectively throughout the contract's duration.

What are the risks associated with a sole-source acquisition of critical defense equipment like combat system workstations?

The primary risk of a sole-source acquisition for critical defense equipment is the potential for inflated costs due to the absence of competitive bidding. Without competing offers, the government may pay a higher price than if multiple vendors had vied for the contract. Another significant risk is reduced innovation; a sole-source provider may have less incentive to invest in developing more advanced or cost-effective solutions. Furthermore, there's a risk of vendor lock-in, where the government becomes heavily reliant on a single supplier, making it difficult and costly to switch to alternative providers or technologies in the future. This dependence can also create vulnerabilities if the sole-source contractor experiences financial difficulties or operational issues.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 450 PULASKI RD, GREENLAWN, NY, 11740

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

Financial Breakdown

Contract Ceiling: $37,123,252

Exercised Options: $37,123,252

Current Obligation: $37,123,252

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0016425GJW74

IDV Type: BOA

Timeline