DoD awards BAE Systems $21.7M for SSN 810-811 FWD ASSEMBLY MATERIAL under full and open competition
Contract Overview
Contract Amount: $21,711,040 ($21.7M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2022-09-02
End Date: 2026-10-16
Contract Duration: 1,505 days
Daily Burn Rate: $14.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SSN 810-811 FWD ASSEMBLY MATERIAL
Place of Performance
Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421
Plain-Language Summary
Department of Defense obligated $21.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: SSN 810-811 FWD ASSEMBLY MATERIAL Key points: 1. Contract awarded to BAE Systems Land & Armaments L.P. for ship building and repair. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Fixed Fee, which can pose risks for cost overruns. 4. This spending falls within the Ship Building and Repairing sector (NAICS 336611).
Value Assessment
Rating: fair
The Cost Plus Fixed Fee contract type, while allowing for flexibility, can lead to higher costs compared to fixed-price contracts if not managed tightly. Benchmarking against similar shipbuilding components is difficult without more specific cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing, though the Cost Plus Fixed Fee structure introduces potential for cost escalation.
Taxpayer Impact: Taxpayer funds are being used for critical defense shipbuilding. While competition is a positive sign for price discovery, the contract type warrants careful monitoring to ensure cost efficiency.
Public Impact
Supports the construction of new U.S. Navy submarines (SSN 810-811). Contributes to the defense industrial base and national security. Ensures the availability of essential components for naval vessels. Potential for job creation within the shipbuilding sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can lead to cost overruns.
- Long contract duration (over 4 years) increases exposure to market fluctuations.
- Lack of specific cost breakdown makes detailed value assessment challenging.
Positive Signals
- Awarded under full and open competition.
- Supports critical defense shipbuilding program.
- Experienced contractor (BAE Systems).
Sector Analysis
This contract is within the Ship Building and Repairing sector, a capital-intensive industry vital for national defense. Spending benchmarks for specific submarine components are highly specialized and not readily available publicly.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. Large prime contractors like BAE Systems may engage subcontractors, but direct small business participation is not evident from this award alone.
Oversight & Accountability
The Department of the Navy is the awarding agency, responsible for oversight. The Cost Plus Fixed Fee structure necessitates robust oversight to manage costs and ensure performance objectives are met within the fixed fee parameters.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- Lack of detailed cost breakdown.
- Potential for scope creep if not managed tightly.
- Reliance on a single contractor for this specific assembly.
Tags
ship-building-and-repairing, department-of-defense, mn, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. SSN 810-811 FWD ASSEMBLY MATERIAL
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 $21.7 million.
What is the period of performance?
Start: 2022-09-02. End: 2026-10-16.
What is the estimated profit margin for BAE Systems under this Cost Plus Fixed Fee contract, and how does it compare to industry standards for similar defense contracts?
The profit margin is embedded within the 'fixed fee' component of the Cost Plus Fixed Fee (CPFF) contract. While the total contract value is $21.7 million, the specific allocation between cost reimbursement and the fixed fee is not detailed in the provided data. Determining the exact profit margin requires access to the contract's fee structure and comparison against typical profit rates for CPFF defense contracts, which can vary based on risk, complexity, and agency guidelines.
How will the Department of the Navy ensure cost control and prevent potential overruns given the Cost Plus Fixed Fee contract type for this long-duration award?
The Department of the Navy will likely employ stringent oversight mechanisms, including regular audits, performance reviews, and Earned Value Management (EVM) techniques. They will monitor BAE Systems' incurred costs against the estimated cost baseline and the fixed fee. Clear performance metrics and defined milestones will be crucial for tracking progress and managing expenditures effectively throughout the 1505-day duration.
What is the strategic importance of the SSN 810-811 FWD ASSEMBLY MATERIAL, and how does this contract contribute to the overall readiness and modernization of the U.S. submarine fleet?
The Forward Assembly (FWD) material is a critical component for the construction of new Virginia-class attack submarines (SSN 810-811). These submarines represent the next generation of undersea warfare capabilities, crucial for maintaining strategic deterrence and projecting power globally. Securing this material ensures the timely progression of the submarine construction program, directly contributing to the modernization and operational readiness of the U.S. Navy's submarine fleet.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIP AND MARINE EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Ball Corporation
Address: 4800 E RIVER RD, MINNEAPOLIS, MN, 55421
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $21,711,040
Exercised Options: $21,711,040
Current Obligation: $21,711,040
Subaward Activity
Number of Subawards: 18
Total Subaward Amount: $11,931,110
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0002420G4107
IDV Type: BOA
Timeline
Start Date: 2022-09-02
Current End Date: 2026-10-16
Potential End Date: 2026-10-16 00:00:00
Last Modified: 2025-09-30
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