Army awards $41.6M for urgent RPG armor kits to BAE Systems, supporting troops in OEF/OIF

Contract Overview

Contract Amount: $41,574,183 ($41.6M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2007-08-29

End Date: 2011-06-28

Contract Duration: 1,399 days

Daily Burn Rate: $29.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE US ARMY TACOM LIFE CYCLE MANAGEMENT COMMAND PROPOSES TO ISSUE A LETTER CONTRACT IN ORDER TO BUY 545 ROCKET PROPELLED GRENADE (RPG)ALUMINUM BAR ARMOR KITS FROM BAE SYSTEMS. THE 545 KITS CONSISTS OF 371 KITS IN SUPPORT OF THE RG-31 MEDIUM MINE PROTECTED VEHICLES AND 714 KITS SUPPORTING THE JOINT ENGINEERING RAPID RESPONSE VEHICLES (JERRV). THESE RPG KITS ARE URGENTLY REQUIRED IN THEATER TO SUPPORT OPERATION ENDURING FREEDOM AND OPERATION IRAQI FREEDOM.

Place of Performance

Location: MANASSAS PARK, MANASSAS PARK (CITY) County, VIRGINIA, 20111

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $41.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: THE US ARMY TACOM LIFE CYCLE MANAGEMENT COMMAND PROPOSES TO ISSUE A LETTER CONTRACT IN ORDER TO BUY 545 ROCKET PROPELLED GRENADE (RPG)ALUMINUM BAR ARMOR KITS FROM BAE SYSTEMS. THE 545 KITS CONSISTS OF 371 KITS IN SUPPORT OF THE RG-31 MEDIUM MINE PROTECTED VEHICLES AND 714 KITS SU… Key points: 1. Contract addresses urgent need for RPG protection for RG-31 and JERRV vehicles. 2. BAE Systems is the sole awardee, raising questions about competition. 3. The contract's urgency suggests potential for premium pricing. 4. Fixed-price contract type aims to control costs, but urgency may override. 5. This award falls under the broader category of military vehicle component manufacturing. 6. The duration of the contract is over three years, indicating sustained need.

Value Assessment

Rating: fair

The total award of $41.6 million for 545 RPG aluminum bar armor kits appears substantial. Without specific per-unit cost data or comparisons to similar recent procurements for equivalent protection systems, it is difficult to definitively assess value for money. The urgent requirement may have necessitated a premium. However, the fixed-price nature of the contract provides some cost control for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was considered, it was ultimately limited. This suggests that BAE Systems may have been the only viable or responsive bidder for this specific urgent requirement, or that other sources were excluded for specific reasons. The limited competition could impact price discovery and potentially lead to higher costs than a fully open competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the limited competition, as fewer bidders generally result in less downward pressure on pricing. The urgency of the requirement also likely contributed to a less competitive environment.

Public Impact

Troops deployed in Operation Enduring Freedom and Operation Iraqi Freedom will benefit from enhanced protection against rocket-propelled grenades. The contract delivers 545 RPG aluminum bar armor kits. These kits are specifically for RG-31 medium mine-protected vehicles and Joint Engineering Rapid Response Vehicles (JERRV). The geographic impact is primarily in theater of operations, supporting ongoing military missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than a fully open solicitation.
The urgent nature of the requirement could have led to less rigorous price negotiation.
Lack of detailed cost breakdown makes independent value assessment challenging.

Positive Signals

The contract is Firm Fixed Price, providing cost certainty for the government.
The award addresses a critical and urgent need for soldier protection in combat zones.
The contract duration allows for sustained support and delivery of essential equipment.

Sector Analysis

This contract falls within the defense industrial sector, specifically focusing on armored vehicle components. The market for such specialized armor is dominated by a few key defense contractors capable of meeting stringent military specifications and production demands. Spending in this area is driven by ongoing military operations and the need to protect personnel and equipment in high-threat environments. Comparable spending benchmarks would typically involve other contracts for vehicle armor upgrades or new armored vehicle production.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the specialized nature of military armor manufacturing and the large dollar value, it is unlikely that small businesses would be primary awardees for the prime contract. However, BAE Systems may engage small businesses as subcontractors for specific components or services, though this is not detailed in the provided data.

Oversight & Accountability

The contract is managed by the US Army TACOM Life Cycle Management Command, a key entity within the Department of Defense responsible for vehicle acquisition and sustainment. Oversight would typically involve program managers, contracting officers, and potentially the Defense Contract Management Agency (DCMA). Transparency is generally maintained through contract databases like FPDS, though detailed cost breakdowns are often proprietary. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Mine-Resistant Ambush Protected (MRAP) Vehicles
Tactical Wheeled Vehicles
Armored Vehicle Component Manufacturing
Operation Enduring Freedom Support Contracts
Operation Iraqi Freedom Support Contracts

Risk Flags

Urgent requirement may lead to premium pricing.
Limited competition could reduce price discovery.
Lack of detailed cost breakdown hinders value assessment.
Contract duration extends over three years, indicating sustained need.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.6 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. THE US ARMY TACOM LIFE CYCLE MANAGEMENT COMMAND PROPOSES TO ISSUE A LETTER CONTRACT IN ORDER TO BUY 545 ROCKET PROPELLED GRENADE (RPG)ALUMINUM BAR ARMOR KITS FROM BAE SYSTEMS. THE 545 KITS CONSISTS OF 371 KITS IN SUPPORT OF THE RG-31 MEDIUM MINE PROTECTED VEHICLES AND 714 KITS SUPPORTING THE JOINT ENGINEERING RAPID RESPONSE VEHICLES (JERRV). THESE RPG KITS ARE URGENTLY REQUIRED IN THEATER TO SUPPORT OPERATION ENDURING FREEDOM AND OPERATION IRAQI FREEDOM.

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 $41.6 million.

What is the period of performance?

Start: 2007-08-29. End: 2011-06-28.

What is the specific unit cost of these RPG armor kits, and how does it compare to similar systems?

The total contract value is $41,574,183.14 for 545 kits. This yields an approximate average unit cost of $76,282.94 per kit. However, this average includes kits for two different vehicle types (RG-31 and JERRV), which may have different complexities and costs. Without specific breakdowns for each vehicle type or comparative data from other procurements of similar RPG protection systems, it is challenging to benchmark this price effectively. Factors such as material costs (aluminum bar), manufacturing complexity, testing, and the urgent nature of the requirement would influence the final price. The limited competition also makes direct price comparison difficult.

What specific capabilities does BAE Systems possess that made them the sole or primary source for this urgent requirement?

BAE Systems is a major defense contractor with extensive experience in armored vehicle design, manufacturing, and integration. For this specific requirement, they likely possess the necessary technical expertise, production capacity, and existing supply chain relationships to rapidly produce the specialized aluminum bar armor kits. Their familiarity with the RG-31 and JERRV platforms, potentially through prior work or existing contracts, would also be a significant advantage. The urgent nature of the requirement likely favored contractors who could demonstrate immediate readiness and capability, potentially leading to a sole-source or limited-competition award if other potential sources could not meet the stringent timeline or technical specifications.

How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' classification impact the perceived value for taxpayers?

This classification suggests that while the government intended to seek competition, certain sources were excluded, or only one source was deemed capable of meeting the urgent requirement. This typically leads to less robust price competition compared to a truly 'full and open' competition where multiple bidders vie for the contract. Consequently, taxpayers may bear a higher cost, as the government has less leverage to negotiate the lowest possible price. The exclusion of sources, if not clearly justified by technical or urgency factors, raises concerns about whether the government secured the best possible value for taxpayer funds.

What are the risks associated with awarding a contract under urgent circumstances, particularly regarding cost and quality?

Urgent contracting carries inherent risks. Regarding cost, the pressure to expedite procurement can lead to less negotiation time, potentially resulting in higher prices. Contractors may also factor in premiums for expedited production or expedited delivery. Regarding quality, while not always the case, the rush to fulfill an urgent need could theoretically compromise rigorous testing or quality control processes if not carefully managed by the contracting agency. However, the fixed-price nature of this contract provides some cost control, and the Army's oversight mechanisms are expected to ensure quality standards are met despite the urgency.

What is the historical spending pattern for similar armored vehicle protection systems by the Department of the Army?

Historical spending on armored vehicle protection systems by the Department of the Army has been significant, particularly following the increased IED and RPG threats encountered in Iraq and Afghanistan. This includes spending on Mine-Resistant Ambush Protected (MRAP) vehicles, reactive armor, and add-on armor kits like the RPG armor mentioned here. Contracts for such systems often involve large dollar values and can be awarded through various competition levels, including sole-source or limited competition, especially when specific threats emerge rapidly or require specialized solutions. Tracking specific spending on RPG aluminum bar armor kits would require detailed analysis of contract databases, but it falls within a broader category of substantial investment in vehicle survivability.

Industry Classification

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

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1250 24TH ST NW STE 800, WASHINGTON, DC, 98

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $41,574,183

Exercised Options: $41,574,183

Current Obligation: $41,574,183

Contract Characteristics

Cost or Pricing Data: YES

Timeline