DoD awards $7.56M for aircraft manufacturing, with BAE Systems as prime contractor

Contract Overview

Contract Amount: $7,558,826 ($7.6M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2022-03-03

End Date: 2026-03-13

Contract Duration: 1,471 days

Daily Burn Rate: $5.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LIMITED PRODUCTION SYSTEMS

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $7.6 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: LIMITED PRODUCTION SYSTEMS Key points: 1. Contract value represents a portion of broader aircraft manufacturing spending. 2. BAE Systems has a significant presence in defense contracting. 3. The contract duration is over 4 years, suggesting a need for sustained support. 4. Fixed-price contract type may offer cost certainty but limits flexibility. 5. The specific North American Industry Classification System (NAICS) code 336411 points to aircraft engine and engine parts manufacturing. 6. Geographic location in Maryland may indicate a specific operational hub.

Value Assessment

Rating: fair

The contract value of $7.56 million is modest in the context of large-scale defense procurements. Without specific benchmarks for 'LIMITED PRODUCTION SYSTEMS' within aircraft manufacturing, a direct value-for-money assessment is challenging. The firm-fixed-price structure provides some cost predictability for the government. However, a deeper analysis would require comparing this award to similar limited production contracts for aircraft components or systems to ascertain if the pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. This approach generally fosters a competitive environment, which can lead to better pricing and innovation. The number of bidders is not specified, but the 'full and open' designation suggests a robust competition was intended.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is expected to drive down costs through market forces and encourage a wider range of potential suppliers.

Public Impact

The Department of the Navy benefits from the acquisition of limited production aircraft systems. This contract supports the manufacturing and delivery of critical aircraft components or systems. The primary impact is on the defense industrial base, specifically within aircraft manufacturing. Workforce in Maryland may see employment opportunities related to specialized manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited production contracts can sometimes be less cost-effective than full-rate production due to setup and learning curve inefficiencies.
Reliance on a single prime contractor, even from full and open competition, can create vendor lock-in for future needs.
The specific nature of 'limited production' may indicate niche requirements that are difficult to benchmark against broader market trends.

Positive Signals

Awarding under full and open competition maximizes the potential for competitive pricing.
The firm-fixed-price contract type provides budget certainty for the government.
The long contract duration (over 4 years) suggests a stable, long-term need being met.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft manufacturing (NAICS 336411). This sector is characterized by high technological complexity, significant R&D investment, and stringent quality requirements. Spending in this area is often driven by national security needs and technological advancements. Comparable spending benchmarks would typically involve analyzing other contracts for aircraft components, systems, or limited production runs within the Department of Defense.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this specific contract. While the prime contractor is a large entity, there may be opportunities for small businesses to participate as subcontractors. Further investigation into the subcontracting plan would be necessary to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract structure, which obligates the contractor to deliver specified goods or services at an agreed-upon price. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Aircraft Manufacturing
Defense Procurement
Aerospace Components
Limited Production Contracts

Risk Flags

Potential for cost overruns due to fixed-price nature on complex systems.
Limited competition insights without bidder numbers.
Scope creep risk in limited production scenarios.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.6 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. LIMITED PRODUCTION SYSTEMS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES 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 $7.6 million.

What is the period of performance?

Start: 2022-03-03. End: 2026-03-13.

What is the historical spending pattern for BAE Systems Technology Solutions & Services Inc. with the Department of the Navy for aircraft manufacturing?

Analyzing historical spending for BAE Systems Technology Solutions & Services Inc. with the Department of the Navy for aircraft manufacturing (NAICS 336411) would involve reviewing contract databases like FPDS-NG or SAM.gov. This would reveal the frequency, value, and types of contracts awarded to this specific entity within this domain. For instance, one might look for trends in fixed-price versus cost-plus contracts, the average duration of awards, and whether previous awards were for similar 'limited production' items. Understanding this history provides context for the current $7.56 million award, indicating if it represents a continuation of a relationship, an expansion of services, or a new venture. Without direct access to this historical data, it's difficult to provide specific figures, but the process involves identifying all relevant contract actions over a defined period (e.g., the last 5-10 fiscal years) and aggregating the data.

How does the $7.56 million contract value compare to other limited production contracts for aircraft systems within the DoD?

To benchmark the $7.56 million contract value against similar 'limited production systems' for aircraft within the DoD, one would need to query contract databases using relevant NAICS codes (like 336411) and keywords such as 'limited production,' 'prototype,' or 'low-rate initial production.' The analysis would focus on contracts awarded over a similar timeframe (e.g., 2020-2024) and by comparable agencies (e.g., Air Force, Army). The goal is to identify the typical range of contract values for such specialized procurements. If the $7.56 million falls within the median or average range for comparable contracts, it suggests fair market pricing. If it is significantly higher or lower, it warrants further investigation into the scope, complexity, and specific requirements of the systems being procured. Without this comparative data, assessing the value-for-money is speculative.

What are the specific risks associated with a firm-fixed-price contract for limited production aircraft systems?

Firm-fixed-price (FFP) contracts offer cost certainty to the government but can introduce risks for the contractor, which may be passed on through higher initial pricing. For 'limited production systems' in aircraft manufacturing, key risks include scope creep, where requirements evolve beyond the initial agreement, potentially leading to contractor claims for additional costs or reduced quality to maintain profitability. Unforeseen technical challenges or material cost increases during the production run can also strain the contractor's margins. If the initial price was set too low due to aggressive bidding or inaccurate cost estimation, the contractor might face financial losses. Conversely, if the contractor overestimates costs to mitigate risk, the government may end up paying a premium. The 'limited' nature of the production might also mean less opportunity for the contractor to achieve economies of scale or learning curve efficiencies, further increasing the risk of cost overruns relative to the fixed price.

What is the typical performance period for aircraft manufacturing contracts of this nature and value?

The performance period for this contract is from March 3, 2022, to March 13, 2026, totaling approximately four years. This duration is relatively standard for contracts involving limited production runs of complex systems, especially in the defense sector. Aircraft manufacturing, even at a limited scale, requires significant lead times for material procurement, specialized manufacturing processes, quality assurance, and testing. A multi-year performance period allows the contractor sufficient time to manage these complexities without the need for frequent, short-term contract extensions, which can be administratively burdensome and potentially disruptive. The duration also suggests a sustained, albeit not high-volume, demand for the specific systems being produced.

What does the NAICS code 336411 specifically encompass in terms of aircraft manufacturing?

The North American Industry Classification System (NAICS) code 336411 specifically covers establishments primarily engaged in manufacturing aircraft engines and engine parts. This includes establishments that manufacture complete aircraft engines (jet, turboprop, and other types), as well as those that produce engine parts such as turbine blades, pistons, and cylinders. It is distinct from establishments primarily engaged in manufacturing complete aircraft (NAICS 336410) or aircraft parts and auxiliary equipment (NAICS 336413). Therefore, this contract likely pertains to the production of engines or critical engine components for aircraft, rather than the entire airframe or other non-engine related parts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042116R0040

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

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: $7,558,826

Exercised Options: $7,558,826

Current Obligation: $7,558,826

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $460,050

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042117D0045

IDV Type: IDC

Timeline