DoD awards $76.4M for Bradley vehicle track maintenance to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $76,414,193 ($76.4M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2011-07-07

End Date: 2015-08-31

Contract Duration: 1,516 days

Daily Burn Rate: $50.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AWARD FOR TRACK MAINTENANCE OF THE BRADLEY VEHICLES AND OTHER VARIANTS

Plain-Language Summary

Department of Defense obligated $76.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: AWARD FOR TRACK MAINTENANCE OF THE BRADLEY VEHICLES AND OTHER VARIANTS Key points: 1. Contract awarded for essential track maintenance on Bradley vehicles, crucial for armored personnel carriers. 2. Sole-source award to BAE Systems, the original equipment manufacturer, raises questions about competitive pricing. 3. Contract duration of over 4 years suggests a long-term need for these specialized maintenance services. 4. The award type, Cost Plus Fixed Fee, can lead to cost overruns if not closely managed. 5. Focus on track maintenance indicates a critical component of vehicle readiness and operational capability. 6. Lack of competition limits opportunities for cost savings through market-based pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of track maintenance for Bradley vehicles. As BAE Systems is the original equipment manufacturer, their pricing is likely based on proprietary knowledge and established supply chains. However, without competitive bids, it's difficult to ascertain if the fixed fee and cost reimbursement represent the best possible value for the government. Comparisons to similar maintenance contracts for other armored vehicles might offer some insight, but direct apples-to-apples comparisons are rare.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to BAE Systems Land & Armaments L.P. This indicates that the government determined that only BAE Systems could provide the required services, likely due to proprietary technology, specialized knowledge, or the fact that they are the original equipment manufacturer for the Bradley vehicles. The absence of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the lack of competitive bidding. Without competing the requirement, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the U.S. Army units operating Bradley Fighting Vehicles, ensuring their operational readiness. Services delivered include essential maintenance and repair of vehicle tracks, a critical component for mobility. Geographic impact is nationwide, supporting Army installations and deployment readiness. Workforce implications include the need for specialized technicians familiar with BAE Systems' equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns if not meticulously managed.
Lack of transparency in pricing due to sole-source nature makes independent value assessment difficult.
Dependence on a single supplier (BAE Systems) for critical maintenance could create future supply chain vulnerabilities.

Positive Signals

Award ensures continued operational readiness of vital Bradley Fighting Vehicles.
BAE Systems, as the OEM, possesses unique expertise for this specialized maintenance.
Contract provides a stable, long-term solution for a critical defense requirement.

Sector Analysis

The defense sector relies heavily on specialized maintenance and sustainment contracts to ensure the readiness of complex military equipment. The market for armored vehicle maintenance is often dominated by original equipment manufacturers (OEMs) like BAE Systems due to proprietary knowledge and specialized tooling. Spending in this area is critical for national security, with contracts often being long-term and awarded through various procurement methods, including sole-source when justified. Benchmarks for such specialized maintenance are difficult to establish publicly due to the unique nature of each platform.

Small Business Impact

This contract does not appear to involve small business set-asides. As a sole-source award to a large prime contractor (BAE Systems), there is no direct indication of subcontracting opportunities for small businesses within this specific award document. The impact on the small business ecosystem is therefore indirect, potentially limiting opportunities if BAE Systems does not proactively engage small businesses in its supply chain for this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is limited due to the sole-source nature, but contract performance reviews and audits by the Defense Contract Audit Agency (DCAA) would be standard oversight mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Bradley Fighting Vehicle Systems
Armored Vehicle Maintenance
Department of Defense Sustainment Contracts
Cost Plus Fixed Fee Contracts
Sole Source Procurements

Risk Flags

Sole Source Award
Cost Plus Fixed Fee Contract Type
Lack of Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. AWARD FOR TRACK MAINTENANCE OF THE BRADLEY VEHICLES AND OTHER VARIANTS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $76.4 million.

What is the period of performance?

Start: 2011-07-07. End: 2015-08-31.

What is the track record of BAE Systems Land & Armaments L.P. in fulfilling similar maintenance contracts for the Department of Defense?

BAE Systems Land & Armaments L.P. has a long and extensive history of providing support and maintenance services for U.S. military platforms, including the Bradley Fighting Vehicle. As the original equipment manufacturer (OEM) for the Bradley, they possess specialized knowledge, tooling, and access to proprietary technical data essential for its upkeep. Their track record typically involves complex sustainment programs, upgrades, and repair services across various military vehicles. While specific contract performance metrics are often not publicly detailed, their continued role as a primary supplier suggests a generally satisfactory performance history in meeting the DoD's requirements for these critical systems. However, the nature of sole-source contracts means that direct comparisons of their performance against competitors are not readily available.

How does the pricing structure (Cost Plus Fixed Fee) for this contract compare to industry standards for similar specialized maintenance services?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense contracting, particularly for services where the scope of work can be difficult to define precisely upfront or involves evolving requirements. It allows the contractor to recover allowable costs plus a predetermined fixed fee representing profit. While standard in the industry, CPFF contracts carry a higher risk of cost growth compared to fixed-price contracts if cost controls are not robust. Benchmarking CPFF pricing is complex as it depends heavily on the specific services, overhead rates, labor costs, and the negotiated fee. For specialized maintenance like that of the Bradley vehicle tracks, where BAE Systems is the OEM, the 'cost' component is influenced by their internal labor rates, material costs, and overhead. The 'fixed fee' is a negotiated profit margin. Without access to BAE's specific cost data and the negotiation details, a precise comparison to 'industry standards' is challenging. However, the lack of competition in this sole-source award suggests that the government did not have the benefit of market-driven price discovery to ensure the most competitive fee and cost structure.

What are the primary risks associated with a sole-source award for critical military vehicle maintenance, and how are they mitigated?

The primary risks associated with a sole-source award for critical military vehicle maintenance include potential overpricing due to lack of competition, reduced incentive for contractor efficiency, and a lack of innovation. Taxpayers may bear higher costs as the government cannot leverage market forces to secure the best price. Contractor efficiency might be lower as there's less pressure to optimize operations. Mitigation strategies employed by the government often include rigorous cost analysis, detailed technical evaluations, strong contract surveillance, and performance management. The Defense Contract Audit Agency (DCAA) may conduct audits to verify costs. Furthermore, the government may negotiate specific performance metrics and service level agreements within the contract to ensure quality and timeliness, even without direct price competition. Long-term strategic partnerships can also be managed to foster collaboration and continuous improvement.

What is the historical spending pattern for Bradley vehicle track maintenance, and how does this award fit within that trend?

Historical spending on Bradley vehicle track maintenance is intrinsically linked to the operational tempo, deployment cycles, and modernization efforts of the U.S. Army. As the Bradley has been a mainstay for decades, consistent spending on its sustainment, including track maintenance, is expected. Awards for such services often occur through multi-year contracts or task orders against indefinite-delivery/indefinite-quantity (IDIQ) vehicles. This specific $76.4 million award, spanning over four years, appears to represent a significant but likely typical investment for maintaining a fleet of these vehicles. Without access to a comprehensive database of all prior Bradley track maintenance contracts, it's difficult to definitively state if this award is higher or lower than historical averages on an annual basis. However, the duration and value suggest a sustained commitment to ensuring the operational readiness of this key platform, aligning with ongoing defense sustainment strategies.

What are the implications of this contract for the overall readiness and operational capability of the U.S. Army's Bradley Fighting Vehicle fleet?

This contract has direct and positive implications for the overall readiness and operational capability of the U.S. Army's Bradley Fighting Vehicle fleet. The Bradley is a critical component of the Army's armored infantry and cavalry formations, providing essential firepower, protection, and mobility. The tracks are a fundamental element of its mobility system; worn or damaged tracks can render the vehicle immobile, severely impacting its combat effectiveness and ability to deploy. By ensuring the availability of specialized maintenance services for these tracks through a dedicated contract with the OEM, the Army guarantees that its Bradleys can be kept in operational condition. This supports training exercises, deployments, and sustained combat readiness, ensuring that soldiers have reliable equipment when and where it is needed.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 1100 BAIRS RD, YORK, PA, 17408

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $76,414,193

Exercised Options: $76,414,193

Current Obligation: $76,414,193

Subaward Activity

Number of Subawards: 48

Total Subaward Amount: $22,216,368

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline