DoD Spends $17M on BAE Systems Vehicle Parts, Lacking Competition

Contract Overview

Contract Amount: $17,048,803 ($17.0M)

Contractor: BAE Systems Tactical Vehicle Systems LP

Awarding Agency: Department of Defense

Start Date: 2009-07-27

End Date: 2010-09-28

Contract Duration: 428 days

Daily Burn Rate: $39.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AXLE ASSEMBLY, FRONT; AXLE ASSEMBLY, REAR; AXLE ASSEMBLY, INTERMEDIATE; ENGINE, DIESEL; WINCH, ELECTRIC

Place of Performance

Location: SEALY, COLORADO County, TEXAS, 77474

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $17.0 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP for work described as: AXLE ASSEMBLY, FRONT; AXLE ASSEMBLY, REAR; AXLE ASSEMBLY, INTERMEDIATE; ENGINE, DIESEL; WINCH, ELECTRIC Key points: 1. Significant spending on critical vehicle components. 2. Sole-source award to BAE Systems raises competition concerns. 3. Contract duration of over a year suggests substantial need. 4. Lack of small business participation noted.

Value Assessment

Rating: questionable

The total award amount of $17,048,802.60 for various axle and engine components appears high given the lack of competitive bidding. Without market research or comparable contract data, assessing true value is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium due to the absence of competitive pricing pressures.

Public Impact

Military readiness may be impacted by the availability of these critical vehicle parts. Taxpayers may be overpaying for essential defense components due to a lack of competition. The long contract duration suggests ongoing reliance on these specific parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
No small business participation
Lack of transparency in pricing

Positive Signals

Essential defense components procured
Contract awarded to established defense contractor

Sector Analysis

This spending falls within the 'All Other Motor Vehicle Parts Manufacturing' sector. Benchmarks for this sector are difficult to ascertain without more specific product details, but large sole-source awards warrant scrutiny.

Small Business Impact

The data indicates no small business participation in this contract. This is a missed opportunity to support small businesses and potentially leverage their agility and innovation.

Oversight & Accountability

The sole-source nature of this award suggests potential gaps in competitive sourcing strategies. Further oversight is needed to ensure fair and open competition whenever possible.

Related Government Programs

All Other Motor Vehicle Parts Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
No small business participation.
Potential for overpayment due to lack of competitive bidding.
Lack of transparency regarding pricing justification.
Long contract duration without clear competitive strategy.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.0 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP. AXLE ASSEMBLY, FRONT; AXLE ASSEMBLY, REAR; AXLE ASSEMBLY, INTERMEDIATE; ENGINE, DIESEL; WINCH, ELECTRIC

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $17.0 million.

What is the period of performance?

Start: 2009-07-27. End: 2010-09-28.

What was the justification for the sole-source award, and was a market research report conducted to confirm the necessity of this approach?

The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies typically conduct market research to determine if only one source can meet the requirement. Without this documentation, it's difficult to assess if the government truly exhausted all options for competitive procurement, potentially leading to suboptimal pricing and reduced innovation.

How does the unit cost of these axle and engine components compare to industry benchmarks or previous procurements of similar items?

Comparing the unit cost against industry benchmarks or historical data is essential for value assessment. If this contract's pricing is significantly higher, it indicates potential overpayment. The absence of competitive bidding makes this comparison even more critical to ensure taxpayer funds are used efficiently and effectively for these vital defense components.

What is the long-term strategy for procuring these critical vehicle parts, and are there plans to introduce competition in future solicitations?

Understanding the long-term procurement strategy is vital for sustained cost-effectiveness and supply chain resilience. If these parts are essential for a large fleet, exploring options for future competition, such as breaking down requirements or encouraging new entrants, could yield better prices and ensure a more robust supply base for the Department of Defense.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Parts Manufacturing › All Other Motor Vehicle Parts Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

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

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 5000 INTERSTATE HWY 10 W, SEALY, TX, 10

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $34,097,605

Exercised Options: $17,048,803

Current Obligation: $17,048,803

Contract Characteristics

Cost or Pricing Data: NO

Timeline