DoD awards $32.2M contract to BAE Systems for ordnance, raising questions about competition
Contract Overview
Contract Amount: $32,200,000 ($32.2M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2011-03-04
End Date: 2012-11-30
Contract Duration: 637 days
Daily Burn Rate: $50.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FUNDING FOR CLIN 0001
Place of Performance
Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40214
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $32.2 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: FUNDING FOR CLIN 0001 Key points: 1. Significant award to a single large contractor. 2. Lack of competition may lead to inflated costs. 3. Contract duration of over 1.5 years. 4. Focus on ordnance manufacturing within the defense sector.
Value Assessment
Rating: questionable
The contract value of $32.2 million for ordnance manufacturing appears high given the lack of competitive bidding. Benchmarking against similar contracts for ordnance accessories is difficult without more specific product details, but the absence of competition is a red flag for potential overpricing.
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 potentially allows the contractor to set terms that are not market-driven, impacting the overall value for taxpayers.
Taxpayer Impact: The lack of competition for this $32.2 million contract means taxpayers may have paid more than necessary for the ordnance and accessories procured.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The Department of the Navy is procuring essential ordnance, impacting military readiness. Reliance on a single contractor for critical defense components raises supply chain concerns.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Sole-source award
Positive Signals
- Award to established defense contractor
- Definitive contract type
Sector Analysis
This contract falls within the defense sector, specifically focusing on ordnance manufacturing. Defense spending on such items is substantial, and competitive bidding is crucial to ensure cost-effectiveness and national security.
Small Business Impact
The award went to BAE Systems Land & Armaments L.P., a large prime contractor. There is no indication that small businesses were involved as subcontractors or partners in this specific award, missing an opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this contract warrants closer oversight to ensure fair pricing and adherence to contract terms. Accountability for the justification of non-competition is essential.
Related Government Programs
- Small Arms, Ordnance, and Ordnance Accessories Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- No small business participation indicated
Tags
small-arms-ordnance-and-ordnance-accesso, department-of-defense, ky, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.2 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. FUNDING FOR CLIN 0001
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 $32.2 million.
What is the period of performance?
Start: 2011-03-04. End: 2012-11-30.
What was the justification for awarding this contract on a sole-source basis instead of competing it?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of viable alternatives. Without specific documentation from the Department of the Navy, it's impossible to determine the precise reason. However, the absence of competition raises concerns about whether all avenues for competitive procurement were fully explored.
How does the unit cost of these ordnance items compare to similar items procured competitively by other agencies?
A direct comparison of unit costs is challenging without detailed specifications of the ordnance and accessories procured under this contract. However, the lack of competition inherently limits the ability to benchmark against market prices. If BAE Systems' pricing is significantly higher than industry averages for comparable items, it would indicate a potential issue with value for money.
What is the long-term strategic impact of awarding critical ordnance manufacturing to a single entity without competition?
Awarding critical manufacturing capabilities to a single entity without competition can create long-term dependencies and reduce overall industrial base resilience. It may stifle innovation from other potential suppliers and could lead to price escalation over time. Diversifying the supplier base through competition is generally considered a best practice for ensuring robust supply chains and cost control.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Product/Service Code: WEAPONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0017409R0038
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC
Address: 163 ROCHESTER DR STE 1, LOUISVILLE, KY, 40214
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $32,200,000
Exercised Options: $32,200,000
Current Obligation: $32,200,000
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2011-03-04
Current End Date: 2012-11-30
Potential End Date: 2012-11-30 00:00:00
Last Modified: 2023-06-01
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