DoD's $45.6M R&D contract for tactical signals intelligence payload awarded to BAE Systems

Contract Overview

Contract Amount: $45,568,970 ($45.6M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-28

End Date: 2015-10-02

Contract Duration: 1,465 days

Daily Burn Rate: $31.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: ENGINEERING AND MANUFACTURING PHASE FOR THE TACTICAL SIGNALS INTELLIGENCE PAYLOAD (TSP). RESEARCH AND DEVELOPMENT SERVICES TO PRODUCE THREE EMD TSP AND TWO GROUND WORKSTATIONS.

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $45.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: ENGINEERING AND MANUFACTURING PHASE FOR THE TACTICAL SIGNALS INTELLIGENCE PAYLOAD (TSP). RESEARCH AND DEVELOPMENT SERVICES TO PRODUCE THREE EMD TSP AND TWO GROUND WORKSTATIONS. Key points: 1. Contract focuses on research and development for a tactical signals intelligence payload and ground workstations. 2. The contract type is Cost Plus Incentive Fee, suggesting performance incentives tied to cost targets. 3. Awarded through full and open competition, indicating a broad market solicitation. 4. The duration of the contract is approximately 4 years, covering a significant development period. 5. The project involves the production of three Engineering and Manufacturing Development (EMD) payloads and two ground workstations. 6. The North American Industry Classification System (NAICS) code 334511 points to the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems and instruments.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific performance metrics or comparable development contracts. The Cost Plus Incentive Fee structure aims to control costs, but the final price can fluctuate based on performance against targets. The total award amount of $45.6 million for three EMD payloads and two ground workstations suggests a substantial investment in advanced technology development. Further analysis would require understanding the technical complexity and the specific milestones achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit proposals. This approach is generally expected to foster a competitive environment, potentially leading to better pricing and innovation. The number of bidders is not specified, but the open competition suggests that multiple companies likely vied for this significant R&D effort.

Taxpayer Impact: Taxpayers benefit from full and open competition through the potential for more cost-effective solutions and a wider array of technological advancements being considered.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive advanced tactical signals intelligence capabilities. The services delivered include the research, development, and production of critical intelligence hardware and software. The geographic impact is primarily within the United States, where the contractor is based and where the development will occur. Workforce implications include specialized engineering, manufacturing, and technical roles within BAE Systems and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns are a potential concern in Cost Plus Incentive Fee contracts if performance targets are not met.
The long development cycle for complex defense systems can introduce risks related to technological obsolescence.
Reliance on a single contractor for the EMD phase could pose risks if unforeseen issues arise with BAE Systems.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
The contract specifies the development of critical intelligence capabilities for national security.
BAE Systems is a well-established defense contractor with significant experience in electronic systems.

Sector Analysis

This contract falls within the defense electronics and systems manufacturing sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high R&D investment, long product development cycles, and stringent performance requirements. The market size for such specialized intelligence systems is significant, driven by ongoing national security needs and technological advancements. Comparable spending benchmarks would typically involve other major defense R&D programs for advanced sensor and communication systems.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside criterion for this specific award (ss: false, sb: false). While BAE Systems, as a large prime contractor, may engage small businesses as subcontractors, the direct award does not prioritize small business set-asides. The impact on the small business ecosystem would depend on BAE Systems' subcontracting strategy and the availability of small businesses capable of supporting specialized R&D and manufacturing tasks in this domain.

Oversight & Accountability

Oversight for this contract would likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the Cost Plus Incentive Fee structure, linking contractor profit to performance against cost and schedule targets. Transparency is facilitated through contract reporting requirements, though specific details of R&D progress may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tactical Intelligence Systems
Signals Intelligence (SIGINT) Programs
Defense Research and Development
Electronic Warfare Systems
Ground Station Development

Risk Flags

Cost Overrun Potential
Technological Obsolescence Risk
Performance Incentive Alignment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. ENGINEERING AND MANUFACTURING PHASE FOR THE TACTICAL SIGNALS INTELLIGENCE PAYLOAD (TSP). RESEARCH AND DEVELOPMENT SERVICES TO PRODUCE THREE EMD TSP AND TWO GROUND WORKSTATIONS.

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 $45.6 million.

What is the period of performance?

Start: 2011-09-28. End: 2015-10-02.

What is the track record of BAE Systems in delivering similar tactical signals intelligence payloads?

BAE Systems Information and Electronic Systems Integration Inc. has a substantial track record in developing and manufacturing advanced electronic systems for defense applications, including intelligence, surveillance, and reconnaissance (ISR) platforms. They are known for their expertise in areas such as electronic warfare, radar systems, and secure communications. While specific details on past tactical signals intelligence payloads are often classified or proprietary, their broad experience in complex defense electronics suggests a strong capability to undertake this type of R&D contract. The company's history includes numerous successful programs with various defense agencies, indicating a capacity for managing intricate development cycles and meeting stringent technical requirements. Their involvement in previous SIGINT-related projects, even if not directly analogous, provides a foundation of relevant knowledge and established processes.

How does the $45.6 million cost compare to similar R&D efforts for intelligence payloads?

Comparing the $45.6 million cost for three Engineering and Manufacturing Development (EMD) Tactical Signals Intelligence Payloads (TSP) and two ground workstations requires context regarding the complexity, technological maturity, and specific capabilities of the systems being developed. R&D contracts for advanced defense systems, especially those involving novel intelligence gathering capabilities, can vary significantly in cost. Factors such as the required processing power, data throughput, sensor sensitivity, size, weight, and power (SWaP) constraints, and the level of miniaturization all influence the price. Without detailed technical specifications and a clear understanding of the program's objectives and risks, a direct cost comparison is difficult. However, for EMD phases of sophisticated defense electronics, this figure appears within a plausible range, especially considering the dual development of payloads and ground support infrastructure.

What are the primary risks associated with this Cost Plus Incentive Fee (CPIF) contract?

The primary risks associated with this Cost Plus Incentive Fee (CPIF) contract revolve around cost control and performance achievement. In a CPIF contract, the contractor is reimbursed for allowable costs plus a fee that is adjusted based on performance against target costs. If the contractor exceeds the target cost, the fee is reduced, and if they come in under, the fee is increased, up to a ceiling. The risk for the government lies in potential cost overruns if the contractor struggles to meet technical requirements efficiently, leading to higher allowable costs that eat into the incentive fee or even exceed the contract ceiling. Conversely, the contractor bears the risk of reduced profit if costs escalate. Another risk is that the incentive structure might inadvertently encourage cutting corners on quality or performance to meet cost targets, although quality assurance measures are typically in place to mitigate this.

How effective is the 'full and open competition' approach for specialized defense R&D like this?

The 'full and open competition' approach is generally considered highly effective for specialized defense R&D, as it maximizes the pool of potential innovators and ensures that the government receives proposals from the most capable sources. For complex R&D efforts like the development of a tactical signals intelligence payload, opening the competition allows a wider range of companies, including those with novel approaches or emerging technologies, to submit bids. This broad solicitation increases the likelihood of identifying the best technical solution at a competitive price. While it requires a more extensive evaluation process, the potential benefits include greater innovation, better value for taxpayer money, and reduced risk of contractor lock-in. The success of this approach hinges on clearly defined requirements and a robust evaluation methodology that fairly assesses technical merit, past performance, and cost.

What is the historical spending pattern for tactical signals intelligence payloads within the Department of Defense?

Historical spending patterns for tactical signals intelligence (SIGINT) payloads within the Department of Defense are characterized by consistent, albeit often classified, investment driven by evolving threats and technological advancements. These programs typically involve significant research and development (R&D) funding, followed by procurement phases for operational deployment. Spending can fluctuate based on strategic priorities, the lifecycle of existing systems, and the emergence of new SIGINT capabilities. Major defense contractors like BAE Systems, Lockheed Martin, Northrop Grumman, and Raytheon are frequent recipients of such contracts. The overall trend reflects a continuous effort to enhance intelligence gathering capabilities across various platforms, from ground-based systems to airborne and space-based assets. Specific dollar amounts are often sensitive due to national security implications, but the sustained nature of these investments underscores their critical importance to military operations.

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: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W15P7T11RS801

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

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

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

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

Financial Breakdown

Contract Ceiling: $61,451,197

Exercised Options: $45,568,970

Current Obligation: $45,568,970

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $2,915,454

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline