DoD awards $38.6M for Assembly Material to BAE Systems, raising concerns about limited competition
Contract Overview
Contract Amount: $38,613,197 ($38.6M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2024-09-25
End Date: 2029-04-09
Contract Duration: 1,657 days
Daily Burn Rate: $23.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: ASSEMBLY MATERIAL
Place of Performance
Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40214
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $38.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: ASSEMBLY MATERIAL Key points: 1. Significant contract value of $38.6 million for assembly material. 2. Sole awardee BAE Systems Land & Armaments L.P. indicates potential lack of competition. 3. Fixed Price with Economic Price Adjustment contract type introduces cost escalation risk. 4. Contract supports the Department of the Navy, likely for shipbuilding and repair.
Value Assessment
Rating: questionable
The contract value of $38.6 million for assembly material is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar materials or alternative suppliers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to BAE Systems. This limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a significant contract value could lead to inflated prices, directly impacting taxpayer funds.
Public Impact
Taxpayers may be overpaying for essential assembly materials due to the absence of competitive bidding. The long contract duration (2024-2029) means potential cost overruns could accumulate over several years. Dependence on a single supplier for critical materials could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Economic price adjustment clause
- Long contract duration
Positive Signals
- Supports critical defense needs
- Established supplier relationship
Sector Analysis
This contract falls under the shipbuilding and repair sector, a critical area for national defense. Spending benchmarks in this sector are often high due to specialized requirements and complex supply chains.
Small Business Impact
The data does not indicate any specific provisions or considerations for small business participation in this contract. The award to a large prime contractor suggests limited direct opportunities for small businesses.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to ensure the justification for a sole-source award is robust and that fair pricing was achieved through other means.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for cost overruns due to economic price adjustment
- Long contract duration
- No indication of small business participation
Tags
ship-building-and-repairing, department-of-defense, ky, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. 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 $38.6 million.
What is the period of performance?
Start: 2024-09-25. End: 2029-04-09.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies typically require detailed documentation, such as a Justification and Approval (J&A), to support sole-source procurements. This documentation should outline the unique capabilities of the sole provider or the lack of viable alternatives. Furthermore, efforts to ensure fair and reasonable pricing might include historical price analysis, comparison to commercial item prices, or independent government cost estimates.
What is the potential financial exposure to the government given the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' contract type over its nearly five-year duration?
The 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) clause allows for price changes based on specific economic factors, such as inflation or material cost fluctuations. Over a 1657-day period (approximately 4.5 years), this exposes the government to potential cost increases beyond the initial fixed price. The magnitude of this risk depends on the specific economic indicators tied to the adjustment and the volatility of those indicators within the relevant market.
How does this contract align with the Department of the Navy's strategic goals for shipbuilding and repair, and are there alternative suppliers being developed?
Understanding the alignment with strategic goals helps contextualize the necessity of this specific procurement. If this material is critical for a particular class of vessels or a modernization effort, the sole-source award might be a temporary measure. However, proactive strategies should ideally involve identifying and developing alternative suppliers to foster competition and ensure long-term supply chain resilience and cost-effectiveness for future procurements.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIP AND MARINE EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0016723R0012
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Ball Corporation
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: $38,613,197
Exercised Options: $38,613,197
Current Obligation: $38,613,197
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $13,865,721
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0016724D0004
IDV Type: IDC
Timeline
Start Date: 2024-09-25
Current End Date: 2029-04-09
Potential End Date: 2029-04-09 00:00:00
Last Modified: 2025-12-03
More Contracts from BAE Systems Land & Armaments L.P.
- Letter Contract for Early Procurement Material to Support the M109a7/M992a3 Vehicle Production — $2.9B (Department of Defense)
- Early Order Material in Support of the Future Purchase of 197 Ampvs and Facility Capacity Expansion Efforts to Increase the Ampv Production Rate to 197 Vehicles PER Year. Supports Ukraine Efforts — $2.5B (Department of Defense)
- 200612!007793!2100!w56hzv!tacom - Warren !w56hzv05g0005 !A!N! !N!0009 ! !20060726!20081231!834476079!824825459!217304393!n!bae Systems Land & Armaments I!1100 Bairs RD !york !pa!17404!87048!133!42!york !york !penn !+000192628556!n!n!000000000000!2350!combat Assault & Tactical VEH, Tracked !a4a!combat Vehicles !000 !NOT Discernable !336992!E! !4! ! ! ! ! !99990909!B! ! !A! !d!n!j!1!001!n!1g!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!y! ! ! ! ! ! !0001! ! — $1.6B (Department of Defense)
- 200112!001338!2100!AE07 !tacom - Warren !daae0701cm016 !A!N!*!N! !20010502!20041231!834476079!824825459!175406842!n!united Defense, L P !1100 Bairs Road !york !pa!17405!87048!133!42!york !york !penn !+000228044944!n!y!000681605313!2350!combat Assault & Tactical VEH, Tracked !a4a!combat Vehicles !1000!NOT Discernable or Classified !336992!*!*!3! ! ! !*!*!*!B!*!*!A! !D !n!j!1!001!n!1g!a!y!f! ! !N!C!N! ! ! !a!a!a!a!000!a!b!n! ! ! ! ! ! !0001! — $1.3B (Department of Defense)
- System Technical Support for Bradley Family of Vehicles, M113, M109, M992 Family of Vehicles, M9 ACE, Mlrs — $1.3B (Department of Defense)
View all BAE Systems Land & Armaments L.P. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)