DoD awards $42M for ALR-56M Radar Warning Receiver Shipsets to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $42,000,000 ($42.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2021-12-30

End Date: 2024-05-14

Contract Duration: 866 days

Daily Burn Rate: $48.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALR-56M RADAR WARNING RECEIVER SHIPSETS

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $42.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: ALR-56M RADAR WARNING RECEIVER SHIPSETS Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract duration of over two years suggests a significant need for these specialized electronic components. 3. Limited competition may indicate a lack of alternative suppliers or a strategic decision by the agency. 4. The firm-fixed-price structure aims to control costs, but the absence of competition limits benchmarking. 5. This award falls under 'Other Electronic Component Manufacturing,' a broad category with varying market dynamics. 6. The contract's value, while substantial, needs to be assessed against the specific capabilities of the ALR-56M system.

Value Assessment

Rating: fair

The contract value of $42 million for ALR-56M Radar Warning Receiver Shipsets is difficult to benchmark due to its sole-source nature. Without competitive bids, it's challenging to determine if the pricing reflects fair market value or if there's an opportunity for cost savings. The firm-fixed-price contract type provides cost certainty for the government, but the lack of competition limits the ability to assess value for money against alternative solutions or suppliers. Further analysis would require understanding the specific technical requirements and the unique nature of the ALR-56M system.

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. This typically occurs when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, which could potentially lead to higher costs for the government compared to a fully competed contract. The agency's justification for this sole-source award would be critical to understanding the rationale.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government's ability to secure the best possible value is diminished when only one vendor is considered.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially other Department of Defense branches requiring advanced radar warning capabilities for their platforms. The contract delivers critical electronic warfare components essential for threat detection and survivability in combat environments. The geographic impact is primarily centered around the contractor's facilities in New York, but the end-use is global for deployed naval assets. This contract supports specialized manufacturing jobs within the defense electronics sector, particularly in New York.

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 the justification for sole-source procurement.
Long contract duration without clear performance metrics in the provided data.
Potential for vendor lock-in due to specialized nature of the equipment.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established defense contractor with likely experience in this domain.
Addresses a critical defense capability (radar warning receivers).

Sector Analysis

The defense electronics sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for specialized systems like radar warning receivers are often awarded to a limited number of prime contractors due to the complexity and proprietary nature of the technology. The market size for such components is tied to overall defense spending and modernization programs. This contract fits within the broader electronic warfare and avionics sub-sector, where innovation and reliability are paramount.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, and the prime contractor, BAE Systems, is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this award. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large sole-source contracts can sometimes limit opportunities for smaller suppliers if not actively managed.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and potentially the Department of Defense's Inspector General, especially given its sole-source nature. Accountability measures would be defined by the contract terms, including delivery schedules and quality specifications. Transparency is limited by the sole-source award, but contract award data is publicly available through systems like FPDS. The firm-fixed-price structure provides a degree of financial oversight.

Related Government Programs

Defense Logistics Agency Procurement
Electronic Warfare Systems
Radar Systems
Avionics Manufacturing
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Potential lack of competition
Limited price benchmarking data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. ALR-56M RADAR WARNING RECEIVER SHIPSETS

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $42.0 million.

What is the period of performance?

Start: 2021-12-30. End: 2024-05-14.

What is the specific justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically stems from situations where only one responsible source can provide the required supplies or services, or when there's a compelling urgency or national security reason that precludes full and open competition. For the ALR-56M Radar Warning Receiver Shipsets, BAE Systems likely possesses unique intellectual property, specialized manufacturing capabilities, or existing integration knowledge that makes them the only viable option. Without the official justification document (e.g., a Justification and Approval - J&A), it's impossible to confirm the exact reasons, but it often relates to proprietary technology, unique system compatibility, or critical sustainment needs for existing platforms where switching vendors would be prohibitively expensive or technically infeasible.

How does the $42 million contract value compare to historical spending on similar radar warning receiver systems?

Comparing the $42 million contract value requires access to historical spending data for similar radar warning receiver (RWR) systems, ideally from the same or comparable platforms. Without specific historical data points for the ALR-56M or equivalent systems, a direct comparison is difficult. However, RWR systems are complex and critical components of electronic warfare suites, often involving significant R&D and specialized manufacturing. Values in the tens of millions of dollars are not uncommon for shipsets or major upgrades of such systems, especially when considering the full lifecycle support and integration costs. A detailed analysis would involve benchmarking against previous awards for RWRs, considering factors like system capabilities, quantities, and contract type.

What are the key performance risks associated with this sole-source contract?

Key performance risks for this sole-source contract include potential complacency from the contractor due to the lack of competitive pressure, which could impact delivery timelines or product quality. There's also a risk of cost overruns if the firm-fixed-price is not adequately negotiated or if unforeseen technical challenges arise that are not covered by contingency clauses. Furthermore, reliance on a single source can create supply chain vulnerabilities and make future upgrades or modifications more complex and expensive. The government's ability to enforce stringent performance standards is crucial, and oversight mechanisms must be robust to mitigate these risks.

What is the operational significance of the ALR-56M Radar Warning Receiver system for the Department of Defense?

The ALR-56M Radar Warning Receiver (RWR) system is a crucial component of the electronic warfare (EW) suite for various Department of Defense platforms, particularly aircraft. Its primary function is to detect and identify radar signals emitted by potential threats, such as enemy aircraft, surface-to-air missile (SAM) sites, and other radar-guided weapons. By providing timely and accurate warnings, the ALR-56M enables aircrews to take evasive action, deploy countermeasures, or adjust their mission tactics, thereby significantly enhancing survivability in contested airspace. Its operational significance lies in its ability to provide situational awareness regarding radar threats, which is fundamental to mission success and personnel safety in modern combat environments.

What are the potential long-term implications of this sole-source award on future procurement of similar systems?

The long-term implications of this sole-source award could include establishing BAE Systems as the incumbent and preferred provider for future iterations or upgrades of the ALR-56M system. This incumbency advantage can make it more challenging for competitors to enter the market in the future, potentially perpetuating sole-source awards unless the agency actively seeks to introduce competition. It may also influence the government's strategy for developing next-generation RWR systems, potentially leading to requirements that are tightly coupled with the existing ALR-56M architecture, further solidifying the incumbent's position. This underscores the importance of strategic sourcing and market research to foster competition over the long term.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRWA121R0021

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 100 CAMPUS RD STE 1, TOTOWA, NJ, 07512

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: $84,000,000

Exercised Options: $84,000,000

Current Obligation: $42,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX15D9441

IDV Type: IDC

Timeline