DoD's $18.8M M113 FOV Upgrade Program Awarded to BAE Systems Amidst Limited Competition

Contract Overview

Contract Amount: $18,807,376 ($18.8M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2007-02-28

End Date: 2009-02-28

Contract Duration: 731 days

Daily Burn Rate: $25.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PHASE III OF JORDAN M113FOV UPGRADE PROGRAM - FMS PROGRAM - UCA

Place of Performance

Location: SANTA CLARA, SANTA CLARA County, CALIFORNIA, 95050

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: PHASE III OF JORDAN M113FOV UPGRADE PROGRAM - FMS PROGRAM - UCA Key points: 1. The contract represents a significant investment in modernizing armored vehicle fleets. 2. BAE Systems, a major defense contractor, is the sole awardee, indicating a specialized capability or existing relationship. 3. The fixed-price contract structure aims to control costs, but the limited competition raises questions about optimal pricing. 4. Performance is tied to the Foreign Military Sales (FMS) program, suggesting international implications. 5. The contract duration of two years provides a defined period for program execution. 6. The award falls under the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' industry code.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable FMS upgrade programs for the M113 FOV. The firm fixed-price nature suggests an attempt to control costs, but the lack of robust competition means there's less market pressure to ensure the lowest possible price. Without more data on the scope of work and the specific upgrades included, a definitive value-for-money assessment is difficult. However, the award amount appears substantial for a two-year upgrade program.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source basis, meaning it was not open to competitive bidding. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the requirement. In this case, BAE Systems likely has the proprietary knowledge or existing production lines for the M113 FOV upgrades. The lack of competition limits the government's ability to explore alternative solutions or leverage market dynamics for better pricing.

Taxpayer Impact: For taxpayers, sole-source awards can mean paying a premium compared to a competitive environment. While necessary in some cases, it reduces the potential for cost savings that competition typically drives.

Public Impact

The primary beneficiaries are the foreign military partners who will receive upgraded M113 Family of Vehicles. The services delivered include the upgrade and modernization of armored vehicles, enhancing their operational capabilities. The geographic impact is primarily international, as the upgrades are for FMS customers. Workforce implications may include specialized manufacturing and engineering roles at BAE Systems facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs for taxpayers.
Sole-source awards reduce transparency and potential for innovation from other vendors.
Dependence on a single contractor can create supply chain risks.

Positive Signals

Firm fixed-price contract helps manage cost overruns.
BAE Systems is an established defense contractor with relevant experience.
The contract addresses a clear need for vehicle modernization.

Sector Analysis

The defense sector, particularly armored vehicle manufacturing and upgrades, is characterized by high barriers to entry and significant R&D investment. Contracts like this are crucial for maintaining the technological edge of military equipment. The M113 FOV upgrade program fits within the broader trend of extending the service life of existing platforms through modernization rather than complete replacement, a common strategy in defense procurement due to cost considerations. Spending in this sub-sector is often driven by geopolitical needs and technological advancements.

Small Business Impact

There is no indication that this contract included small business set-asides. As a sole-source award to a large prime contractor, BAE Systems, the primary subcontracting opportunities would likely be with other large defense suppliers or specialized firms. The impact on the broader small business ecosystem is minimal for this specific award, though BAE Systems may have its own small business subcontracting goals on other programs.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As part of the FMS program, there are also oversight mechanisms involving the Defense Contract Management Agency (DCMA) for quality assurance and delivery. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal DoD review. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

M1 Abrams Tank Program
Bradley Fighting Vehicle Program
Stryker Armored Vehicle Program
Foreign Military Sales (FMS) Programs
Armored Vehicle Modernization Initiatives

Risk Flags

Sole-source award limits competition.
Potential for cost overruns in sole-source contracts.
Lack of transparency in procurement process.
Dependence on a single contractor for critical upgrades.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. PHASE III OF JORDAN M113FOV UPGRADE PROGRAM - FMS PROGRAM - UCA

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 $18.8 million.

What is the period of performance?

Start: 2007-02-28. End: 2009-02-28.

What is the specific scope of the M113 FOV upgrade being performed under this contract?

The provided data indicates this contract is for 'PHASE III OF JORDAN M113FOV UPGRADE PROGRAM - FMS PROGRAM - UCA'. While 'UCA' might refer to a specific upgrade package or variant, the exact technical specifications of the upgrades are not detailed. Typically, M113 FOV upgrades can include enhancements to armor protection, mobility (engine, transmission, suspension), firepower (new weapon stations), situational awareness (sensors, communication systems), and crew survivability features. The 'Phase III' designation suggests this is a continuation or a later stage of a larger upgrade effort for the Jordanian M113 fleet, likely building upon previous phases of modernization.

How does the $18.8 million contract value compare to other M113 upgrade programs?

Directly comparing the $18.8 million value is difficult without knowing the exact scope and number of vehicles upgraded. However, M113 modernization programs can vary significantly in cost per vehicle depending on the level of upgrade. Some basic armor or engine upgrades might cost tens of thousands of dollars per vehicle, while comprehensive overhauls involving new power packs, weapon systems, and advanced electronics could run into hundreds of thousands of dollars per vehicle. Given the 'Phase III' and FMS context, this $18.8 million likely covers a substantial number of vehicles or a complex set of upgrades, making it a significant but not necessarily outlier figure for a fleet modernization effort.

What are the primary risks associated with a sole-source award for defense vehicle upgrades?

The primary risks of a sole-source award for defense vehicle upgrades include potential cost inefficiencies, reduced innovation, and contractor lock-in. Without competitive pressure, the contractor may not be incentivized to offer the most cost-effective solution, potentially leading to higher prices for the government. Furthermore, the lack of competition limits the introduction of new technologies or alternative approaches that other firms might offer. Contractor lock-in occurs when the government becomes heavily reliant on a single supplier for critical upgrades or sustainment, making it difficult and costly to switch providers in the future, which can impact long-term program flexibility and affordability.

What is BAE Systems' track record with M113 upgrades or similar armored vehicle programs?

BAE Systems Land & Armaments L.P. is a major global defense contractor with extensive experience in armored vehicle manufacturing, modernization, and sustainment. They have been involved in numerous upgrade programs for various platforms, including the M113 family of vehicles, often through acquisitions of other defense companies. Their portfolio includes upgrades for survivability, mobility, and lethality across a wide range of armored personnel carriers and fighting vehicles. Their long-standing presence and significant market share in the defense sector suggest a substantial track record, though the specifics of their involvement in the 'Jordan M113FOV Upgrade Program' would require deeper investigation into their contract history.

What are the historical spending patterns for M113 FOV upgrades within the Department of Defense or FMS programs?

Historical spending on M113 upgrades, both domestically and through FMS, has been substantial over the decades as the platform has undergone various modernization efforts to extend its service life. The DoD has invested billions in upgrading its own M113 fleet and facilitating upgrades for allies. FMS programs for M113 modernization are common, reflecting the widespread use of the platform globally and the need for allies to maintain operational readiness. Specific spending patterns vary year-to-year and by country, influenced by defense budgets, threat assessments, and the availability of newer platforms. This $18.8 million contract is one component of a larger, ongoing global effort to enhance the capabilities of this legacy vehicle.

What are the implications of this contract being part of the Foreign Military Sales (FMS) program?

Being part of the FMS program means this contract is facilitating the sale of U.S. defense articles and services to a foreign government (Jordan, in this case), managed by the U.S. Department of Defense. This allows allies to procure U.S. military equipment and services, enhancing interoperability and strengthening security relationships. For the U.S. taxpayer, FMS programs are intended to be cost-reimbursed by the foreign purchaser, meaning the U.S. government acts as an intermediary. However, the U.S. government may incur administrative costs. The FMS framework also involves U.S. government oversight to ensure proper execution and compliance with U.S. foreign policy and export control regulations.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

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: 2890 DE LA CRUZ BLVD, SANTA CLARA, CA, 17

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,827,376

Exercised Options: $18,807,376

Current Obligation: $18,807,376

Timeline