DoD awards $121.9M to BAE Systems for critical facility sustainment at Radford Army Ammunition Plant

Contract Overview

Contract Amount: $121,861,244 ($121.9M)

Contractor: BAE Systems Ordnance Systems Inc

Awarding Agency: Department of Defense

Start Date: 2023-05-12

End Date: 2026-08-31

Contract Duration: 1,207 days

Daily Burn Rate: $101.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: RFAAP SOLVENT SUSTAINMENT PHASE II TO REPAIR THE MOST CRITICAL EQUIPMENT AND INFRASTRUCTURE AT VARIOUS OPERATIONS (BUILDINGS) OF THE GREENLINE'S AND FINISHING AREA FACILITIES.

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24141

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $121.9 million to BAE SYSTEMS ORDNANCE SYSTEMS INC for work described as: RFAAP SOLVENT SUSTAINMENT PHASE II TO REPAIR THE MOST CRITICAL EQUIPMENT AND INFRASTRUCTURE AT VARIOUS OPERATIONS (BUILDINGS) OF THE GREENLINE'S AND FINISHING AREA FACILITIES. Key points: 1. Contract focuses on repairing critical equipment and infrastructure at the Radford Army Ammunition Plant. 2. BAE Systems Ordnance Systems Inc. is the sole awardee for this sustainment phase. 3. The contract spans over three years, indicating a long-term need for facility maintenance. 4. This award represents a significant investment in maintaining operational readiness at a key defense facility. 5. The contract type (Cost Plus Fixed Fee) suggests potential for cost overruns if not closely managed. 6. The facility's critical nature implies high stakes for successful project execution and timely completion.

Value Assessment

Rating: fair

The contract value of $121.9 million for facility sustainment over approximately three years appears substantial. Benchmarking this against similar large-scale facility maintenance contracts for defense installations is challenging without more specific scope details. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for complex projects, carries inherent risks of cost escalation if not meticulously managed and overseen. The absence of a clear per-unit cost benchmark makes direct value-for-money assessment difficult, relying heavily on the contractor's efficiency and the government's oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was initiated. This approach is generally intended to foster price discovery and ensure the government receives competitive pricing by allowing a wide range of qualified contractors to participate.

Taxpayer Impact: A full and open competition process is favorable for taxpayers as it increases the likelihood of obtaining the best value by encouraging a broad range of offers and potentially driving down prices through market forces.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Army, ensuring the operational readiness of the Radford Army Ammunition Plant. Services delivered include the repair of critical equipment and infrastructure within buildings at the Greenline's and Finishing Area facilities. The geographic impact is localized to the Radford Army Ammunition Plant in Virginia. Workforce implications may include job creation or retention for skilled trades and facility maintenance personnel employed by BAE Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
The critical nature of the facilities means any delays or failures in repair could impact national security operations.
Reliance on a single contractor for a large sustainment phase requires robust oversight to ensure performance standards are met.
The long duration of the contract (over 3 years) necessitates sustained attention to performance and cost control.

Positive Signals

Awarded through full and open competition, suggesting a competitive process was undertaken.
Focus on critical infrastructure repair addresses essential needs for operational readiness.
The contractor, BAE Systems, is a well-established defense contractor with experience in similar operations.
The contract duration allows for comprehensive planning and execution of necessary repairs.

Sector Analysis

This contract falls within the Facilities Support Services sector, a critical component of maintaining government and defense installations. The market for such services is substantial, driven by the extensive infrastructure managed by federal agencies. BAE Systems Ordnance Systems Inc. operates within this sector, providing specialized services. Comparable spending benchmarks for large-scale facility sustainment at ammunition plants are not readily available, but the scale of this award suggests it is a significant project within its niche.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this prime contract. Therefore, the direct impact on small business set-asides is minimal. However, BAE Systems may engage small businesses as subcontractors to fulfill parts of the contract, which could provide opportunities within the small business ecosystem. The extent of subcontracting to small businesses would need further investigation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, potentially through contracting officers and technical representatives. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to successful completion of milestones. Transparency is facilitated through contract awards databases, though detailed operational oversight specifics are typically internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Radford Army Ammunition Plant Operations
Defense Infrastructure Sustainment Programs
Ordnance Facility Maintenance
Federal Facilities Management Contracts
Army Ammunition Plant Modernization

Risk Flags

Potential for cost overruns due to CPFF contract type.
Risk of schedule delays impacting critical facility operations.
Ensuring adequate quality control for critical infrastructure repairs.
Dependency on contractor performance for national security asset maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $121.9 million to BAE SYSTEMS ORDNANCE SYSTEMS INC. RFAAP SOLVENT SUSTAINMENT PHASE II TO REPAIR THE MOST CRITICAL EQUIPMENT AND INFRASTRUCTURE AT VARIOUS OPERATIONS (BUILDINGS) OF THE GREENLINE'S AND FINISHING AREA FACILITIES.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS ORDNANCE SYSTEMS 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 $121.9 million.

What is the period of performance?

Start: 2023-05-12. End: 2026-08-31.

What is the track record of BAE Systems Ordnance Systems Inc. in managing large-scale facility sustainment contracts for the Department of Defense, particularly at ammunition plants?

BAE Systems Ordnance Systems Inc. has a significant history of managing operations and sustainment at government-owned, contractor-operated (GOCO) facilities, including ammunition plants. They are known for their work at facilities like the Radford Army Ammunition Plant itself, often under long-term contracts. Their experience typically encompasses a wide range of services, including maintenance, repair, modernization, and operational support for complex industrial infrastructure. While specific performance metrics for past contracts are not detailed here, their continued selection for such critical roles suggests a generally satisfactory performance history in meeting the government's requirements for safety, security, and operational readiness. Further analysis would involve reviewing past performance evaluations and contract histories for similar projects.

How does the $121.9 million cost compare to similar facility sustainment contracts at other Army Ammunition Plants?

Directly comparing the $121.9 million cost to similar contracts at other Army Ammunition Plants is challenging without detailed scope and duration information for those other contracts. Facility sustainment needs vary significantly based on the age of infrastructure, specific operational requirements (e.g., types of munitions produced), and the criticality of the equipment. However, this award represents a substantial investment, indicative of significant repair and maintenance needs at the Radford facility. Large-scale sustainment and modernization projects at major defense industrial facilities can often run into the tens or hundreds of millions of dollars over several years. This figure suggests a major phase of work is being undertaken to address critical deficiencies.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this project, and how are they being mitigated?

The primary risk with a CPFF contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. If costs escalate beyond initial projections, the total contract value can increase significantly, potentially exceeding the government's budget. Mitigation strategies typically involve rigorous government oversight of all incurred costs, detailed audits, and strict adherence to the contract's definition of allowable expenses. The fixed fee provides some incentive for the contractor to control costs, as their profit margin is predetermined. However, effective management by the contracting officer and technical team is crucial to ensure costs remain reasonable and necessary for the project's completion.

What is the expected impact of this contract on the operational readiness and capabilities of the Radford Army Ammunition Plant?

This contract is specifically designed to address the repair of 'most critical equipment and infrastructure.' Therefore, its primary impact is expected to be a significant enhancement of the operational readiness and capabilities of the Radford Army Ammunition Plant. By ensuring that essential buildings, equipment, and infrastructure are in good working order, the contract aims to prevent disruptions to production, improve safety conditions, and maintain the plant's ability to fulfill its mission requirements. Successful execution of these repairs will bolster the facility's long-term viability and its capacity to support national defense needs.

How has spending on facility sustainment at the Radford Army Ammunition Plant trended over the past five years prior to this award?

Historical spending data specifically for facility sustainment at the Radford Army Ammunition Plant prior to this $121.9 million award is not provided in the given data. However, the nature of ammunition plants often requires continuous investment in infrastructure maintenance and upgrades due to the demanding operational environment and the age of some facilities. A significant award like this suggests that either previous sustainment efforts were insufficient to address critical needs, or a planned, multi-year modernization initiative is now underway. Understanding past spending patterns would require accessing historical contract databases and budget allocations for the facility.

What are the key performance indicators (KPIs) that will be used to measure the success of this contract?

While specific KPIs are not detailed in the provided summary, typical performance indicators for facility sustainment contracts include metrics related to schedule adherence (completion of repair milestones on time), cost control (managing expenses within projections), quality of work (meeting technical specifications and standards), safety performance (incident rates and compliance), and overall impact on facility operational readiness. The government's quality assurance personnel would monitor these KPIs closely. Successful completion of repairs to critical systems and infrastructure, ensuring minimal disruption to ongoing operations, would be a primary measure of success.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: STATE RT 114, RADFORD, VA, 24141

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $133,590,940

Exercised Options: $121,861,244

Current Obligation: $121,861,244

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: W52P1J11G0002

IDV Type: BOA

Timeline