DoD's $28.6M Ammunition Contract with BAE Systems Raises Questions on Competition and Value
Contract Overview
Contract Amount: $28,599,798 ($28.6M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2015-05-01
End Date: 2022-11-30
Contract Duration: 2,770 days
Daily Burn Rate: $10.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PRODUCTION
Place of Performance
Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421
Plain-Language Summary
Department of Defense obligated $28.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: PRODUCTION Key points: 1. Significant spending on ammunition manufacturing, with a large portion awarded without competition. 2. BAE Systems is a major defense contractor, indicating potential market concentration. 3. The contract's duration and fixed-price nature suggest potential for cost overruns if not managed. 4. The 'Ammunition (except Small Arms) Manufacturing' sector is critical for defense readiness.
Value Assessment
Rating: questionable
The contract value of $28.6 million over nearly 7 years, awarded as firm fixed price, requires scrutiny. Without competitive bidding, it's difficult to ascertain if this price represents fair market value compared to similar ammunition procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, meaning it was not competed. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition on this $28.6 million contract likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.
Public Impact
Taxpayers may have overpaid for ammunition due to the absence of competitive bidding. The long contract duration could indicate a reliance on a single supplier for critical defense components. Lack of transparency in the sole-source award process hinders public understanding of defense spending decisions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of competition
Positive Signals
- Firm fixed price contract type
- Awarded to a known defense contractor
Sector Analysis
This contract falls within the defense manufacturing sector, specifically ammunition production. Spending benchmarks in this area are often influenced by geopolitical factors and military readiness requirements, making direct comparisons challenging without detailed specifications.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as BAE SYSTEMS LAND & ARMAMENTS L.P. is a large defense contractor. There is no indication of subcontracting opportunities for small businesses within this specific award.
Oversight & Accountability
The sole-source nature of this contract warrants closer oversight from the Department of Defense to ensure fair pricing and prevent potential waste. Accountability for the justification of the non-competitive award is crucial.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for overpayment due to lack of competition
- Limited transparency in procurement process
- Long contract duration may reduce flexibility
- No clear indication of small business participation
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mn, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. PRODUCTION
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 $28.6 million.
What is the period of performance?
Start: 2015-05-01. End: 2022-11-30.
What was the specific justification for awarding this ammunition contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of adequate competition. For this specific contract, the Department of Defense would need to provide documentation detailing why BAE Systems was the only viable option and why competition was not feasible or practical.
How does the per-unit cost of this ammunition compare to similar contracts awarded competitively within the last five years?
Without access to specific unit cost data and comparable competitive contracts for the same type of ammunition, a direct comparison is not possible. However, the absence of competition suggests a higher likelihood of inflated per-unit costs compared to what might be achieved through a bidding process.
What measures are in place to ensure the quality and timely delivery of ammunition under this long-term, sole-source contract?
Standard government contract clauses typically address quality assurance and delivery schedules. For this contract, oversight would involve regular inspections, performance monitoring, and adherence to the firm fixed price terms. The Department of Defense's quality assurance representatives would be responsible for ensuring compliance.
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: N0017414R0023
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC
Address: 4800 E RIVER RD, MINNEAPOLIS, MN, 55421
Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations
Financial Breakdown
Contract Ceiling: $28,599,798
Exercised Options: $28,599,798
Current Obligation: $28,599,798
Subaward Activity
Number of Subawards: 11
Total Subaward Amount: $4,116,047
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-05-01
Current End Date: 2022-11-30
Potential End Date: 2022-11-30 00:00:00
Last Modified: 2022-10-31
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