DoD Spends $68M on BAE Systems LRUs for Army QRC Program Without Competition
Contract Overview
Contract Amount: $67,963,673 ($68.0M)
Contractor: BAE Systems Information and Electronic Systems Integration Inc.
Awarding Agency: Department of Defense
Start Date: 2012-09-21
End Date: 2015-01-30
Contract Duration: 861 days
Daily Burn Rate: $78.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCUREMENT OF 141 B-KIT LINE REPLACEABLE UNITS (LRUS) IN SUPPORT OF A QUICK REACTION CAPABILITY (QRC) PROGRAM
Place of Performance
Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $68.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: PROCUREMENT OF 141 B-KIT LINE REPLACEABLE UNITS (LRUS) IN SUPPORT OF A QUICK REACTION CAPABILITY (QRC) PROGRAM Key points: 1. Significant expenditure on specialized electronic components for a critical defense capability. 2. Sole-source award to BAE Systems suggests limited market alternatives or specific technical requirements. 3. Lack of competition raises concerns about price reasonableness and potential for inflated costs. 4. The 'Quick Reaction Capability' designation implies urgency, which may have influenced procurement strategy.
Value Assessment
Rating: questionable
The contract value of $67.96 million for 141 LRUs is substantial. Without competitive bids, it's difficult to assess if this price is aligned with market rates for similar complex electronic components.
Cost Per Unit: $482,000 per unit (estimated)
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition in this sole-source procurement may result in taxpayers paying a premium for these critical LRUs.
Public Impact
Ensures operational readiness for a specific Army capability. Supports advanced military technology and defense infrastructure. Potential for cost overruns impacts overall defense budget allocation. Limited visibility into the justification for sole-source procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High per-unit cost
Positive Signals
- Supports a Quick Reaction Capability
- Procurement of critical components
Sector Analysis
This procurement falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is often characterized by high R&D costs and specialized manufacturing, with significant government investment.
Small Business Impact
The contract was awarded to BAE Systems, a large defense contractor. There is no indication that small businesses were involved in this specific sole-source procurement.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the justification was robust and that the pricing reflects fair and reasonable value, despite the absence of competition.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- High estimated per-unit cost requires validation.
- Potential for cost overruns due to lack of competition.
- Limited transparency regarding justification for sole-sourcing.
Tags
search-detection-navigation-guidance-aer, department-of-defense, nh, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $68.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. PROCUREMENT OF 141 B-KIT LINE REPLACEABLE UNITS (LRUS) IN SUPPORT OF A QUICK REACTION CAPABILITY (QRC) PROGRAM
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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $68.0 million.
What is the period of performance?
Start: 2012-09-21. End: 2015-01-30.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative solutions or suppliers considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can meet the requirement. Without access to the specific contract file and justification documentation, it's impossible to detail the exact reasons. However, agencies must demonstrate that competition is not feasible or would not be in the government's best interest.
How does the per-unit cost of these LRUs compare to similar components procured competitively by the DoD or other government agencies?
Benchmarking the $482,000 estimated per-unit cost is challenging without specific details on the LRUs' complexity and function. However, this figure appears high for standard electronic components. A thorough analysis would require comparing specifications, performance metrics, and pricing data from other competitive procurements of analogous systems to determine if this represents a fair market price.
What is the long-term strategy for sustaining this QRC program, and will future procurements also be sole-source?
The long-term strategy for sustaining the QRC program is crucial for understanding future spending. If the technology remains proprietary or highly specialized to BAE Systems, future procurements may also face sole-source challenges. Agencies should explore options for technology transfer, developing alternative sources, or ensuring robust long-term support agreements to mitigate risks and control costs over the program's lifecycle.
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: COMM/DETECT/COHERENT RADIATION
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: 65 SPIT BROOK RD, NASHUA, NH, 03060
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: $67,963,673
Exercised Options: $67,963,673
Current Obligation: $67,963,673
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2012-09-21
Current End Date: 2015-01-30
Potential End Date: 2015-01-30 00:00:00
Last Modified: 2015-01-09
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