DoD awards $26.3M for Phase Shifter, Electronic components to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $26,305,634 ($26.3M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2020-10-14

End Date: 2025-04-04

Contract Duration: 1,633 days

Daily Burn Rate: $16.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PHASE SHIFTER,ELECT

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $26.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: PHASE SHIFTER,ELECT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long performance period of over 4 years suggests a critical, ongoing need. 3. Firm Fixed Price contract type shifts cost risk to the contractor. 4. Awarded by the Department of Defense, indicating a national security focus. 5. The North American Industry Classification System (NAICS) code 336413 points to specialized aircraft parts manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging due to its sole-source nature and specialized components. Without competitive bids, it's difficult to ascertain if the $26.3 million price represents optimal value for money. The firm fixed-price structure does offer cost certainty, but the lack of competition raises concerns about potential overpayment compared to a more open market scenario. Further analysis would require access to cost breakdowns or historical pricing for similar components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit taxpayer value by removing the downward pressure on prices that competition provides. This can result in higher overall spending for essential defense components.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical electronic components for its operations. This contract supports the manufacturing of specialized aircraft parts, likely contributing to national defense capabilities. The contract's performance is based in New York, potentially impacting the local economy and workforce in that region. The workforce implications include employment opportunities within BAE Systems and its supply chain for specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in pricing due to no competitive bidding process.
Long contract duration could mask inefficiencies if not closely monitored.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor, providing budget certainty.
Award to an established defense contractor (BAE Systems) suggests a level of trust and proven capability.
Specialized nature of the components implies critical functionality for defense systems.

Sector Analysis

The contract falls within the aerospace and defense manufacturing sector, specifically focusing on electronic components for aircraft. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality and security requirements. Spending in this area is driven by defense modernization efforts and the need for advanced technological capabilities. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar specialized electronic systems within defense contracts.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, BAE Systems, will likely handle the majority of the work internally or with larger partners, potentially limiting opportunities for small businesses within the defense supply chain for this specific award.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of accountability by placing cost risk on the contractor. Transparency is limited due to the sole-source award, but contract actions and performance would typically be subject to internal DoD reviews and potentially Inspector General oversight if performance issues arise.

Related Government Programs

Defense Contract Awards
Aerospace Manufacturing
Electronic Components
Sole-Source Procurements
BAE Systems Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. PHASE SHIFTER,ELECT

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $26.3 million.

What is the period of performance?

Start: 2020-10-14. End: 2025-04-04.

What is the specific function of the 'PHASE SHIFTER,ELECT' components being procured?

The specific function of the 'PHASE SHIFTER,ELECT' components is not detailed in the provided data. However, given the context of the award to BAE Systems Information and Electronic Systems Integration Inc. by the Department of Defense under NAICS code 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing), these components are highly likely to be critical parts of an aircraft's electronic warfare systems, radar, communication, or navigation systems. Phase shifters are essential in controlling the phase of an electronic signal, which is fundamental for beamforming in radar and antenna arrays, signal modulation, and other advanced electronic functions critical for modern military aircraft performance and survivability.

How does the $26.3 million contract value compare to similar sole-source awards for electronic components in the defense sector?

Directly comparing the $26.3 million value of this sole-source contract for 'PHASE SHIFTER,ELECT' to similar awards is challenging without more specific technical details and market intelligence. Sole-source procurements inherently lack the price transparency of competitive bids. However, for specialized, high-technology electronic components crucial for defense applications, contract values can range widely from hundreds of thousands to tens of millions of dollars, depending on complexity, quantity, and technological sophistication. BAE Systems is a major defense contractor, and their pricing for such critical systems is often negotiated based on proprietary technology and established relationships, making external benchmarking difficult. The value appears substantial, underscoring the critical nature of these components.

What are the primary risks associated with this sole-source contract award?

The primary risks associated with this sole-source contract are related to cost and potential lack of innovation. Firstly, the absence of competition means the government may not be achieving the best possible price, as there's no market pressure to drive down costs. This could lead to overpayment. Secondly, sole-source awards can sometimes stifle innovation, as the contractor may have less incentive to develop more cost-effective or advanced solutions if they are guaranteed the contract regardless of alternatives. Lastly, there's a risk of vendor lock-in, where the government becomes dependent on a single supplier for critical components, potentially limiting future flexibility and negotiation power.

What is BAE Systems' track record with the Department of Defense for similar types of contracts?

BAE Systems has a long and extensive track record of contracting with the Department of Defense (DoD) across a wide array of defense systems, including electronic warfare, communications, naval systems, and aerospace components. They are a major defense prime contractor. For contracts involving specialized electronic components and aircraft parts, BAE Systems has consistently secured significant awards. Their history with the DoD suggests a proven capability to deliver complex systems and meet stringent defense requirements. While specific performance metrics for this 'PHASE SHIFTER,ELECT' contract are not detailed, BAE Systems' overall relationship with the DoD is robust, characterized by numerous large-value contracts, indicating a generally reliable, albeit often sole-source or limited-competition, supplier.

How does the duration of this contract (over 4 years) impact the assessment of its value and risk?

The extended duration of this contract, from October 2020 to April 2025 (over 4 years), suggests that the 'PHASE SHIFTER,ELECT' components are integral to an ongoing, long-term defense program or platform. From a value perspective, a longer contract can sometimes allow for economies of scale and more predictable production planning, potentially leading to better unit costs over time compared to multiple short-term contracts. However, it also increases the risk of cost escalation if market conditions change significantly or if the initial pricing was not adequately forward-looking. For risk assessment, the long duration necessitates robust oversight to ensure continued performance, quality, and adherence to the fixed price throughout the contract's life. It also implies a critical dependency on these components for the duration of the program.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: 450 PULASKI RD, GREENLAWN, NY, 11740

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: $26,305,634

Exercised Options: $26,305,634

Current Obligation: $26,305,634

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $3,912,756

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRPA117GC201

IDV Type: BOA

Timeline