DoD Awards $460M Contract to BAE Systems for Aircraft Systems, Lacking Competition

Contract Overview

Contract Amount: $4,601,220 ($4.6M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-25

End Date: 2028-03-31

Contract Duration: 918 days

Daily Burn Rate: $5.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RA,AIRCRAFT,MATERIA

Place of Performance

Location: WAYNE, PASSAIC County, NEW JERSEY, 07470

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $4.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: RA,AIRCRAFT,MATERIA Key points: 1. Significant award to a single large business, raising questions about competition. 2. Focus on specialized aircraft systems suggests a niche market with limited players. 3. Long contract duration (over 6 years) could lead to price escalation risks. 4. The 'NOT COMPETED' status is a primary risk indicator for taxpayer value.

Value Assessment

Rating: questionable

The contract value of $460.12M over approximately 6 years for specialized aircraft systems is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these critical aircraft systems, as the government did not leverage market forces to secure the best possible price.

Public Impact

Taxpayers may be overpaying for essential defense equipment due to the absence of competitive bidding. The Department of the Navy relies on a single vendor for these specialized systems, creating potential supply chain risks. Future procurements of similar systems could be influenced by this sole-source award, potentially perpetuating non-competitive practices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Critical defense capability being procured
Established vendor with relevant experience

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on advanced navigation and guidance systems for aircraft. Spending in this area is typically high due to technological complexity and national security requirements.

Small Business Impact

The contract was awarded to BAE Systems, a large business, and there is no indication of small business participation. This award does not appear to support small business contracting goals.

Oversight & Accountability

The 'NOT COMPETED' status warrants close oversight to ensure the justification for sole-source procurement is valid and that the pricing is fair and reasonable. Robust contract management is crucial.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition may lead to inflated costs.
Long-term contract increases exposure to price changes.
Potential for vendor lock-in and reduced future innovation.
Limited transparency into the pricing structure.
No apparent small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. RA,AIRCRAFT,MATERIA

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 $4.6 million.

What is the period of performance?

Start: 2025-09-25. End: 2028-03-31.

What is the specific justification for awarding this contract on a sole-source basis, and were alternative solutions explored?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Exploring alternatives would involve market research to determine if other vendors could meet the specifications, even with modifications, or if the requirement could be broken down into smaller, competitive components.

How will the government ensure fair and reasonable pricing over the contract's 6-year duration without competitive pressure?

Ensuring fair and reasonable pricing without competition relies heavily on robust government cost analysis, negotiation, and contract surveillance. This includes detailed review of the contractor's cost proposals, benchmarking against similar historical contracts (if available), and potentially incorporating economic price adjustment clauses that are carefully monitored.

What are the potential risks associated with relying on a single supplier for these critical aircraft systems, particularly regarding innovation and future upgrades?

Relying on a single supplier can stifle innovation as there is less incentive for the vendor to invest in new technologies or process improvements without competitive pressure. It also creates significant risks related to supply chain disruptions, potential vendor lock-in, and difficulties in adapting systems to future technological advancements or evolving mission requirements.

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: 150 PARISH DR, WAYNE, NJ, 07470

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

Financial Breakdown

Contract Ceiling: $4,601,220

Exercised Options: $4,601,220

Current Obligation: $4,601,220

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline