Department of Defense awards $38.9M for expanded metal armor, a sole-source contract with BAE Systems

Contract Overview

Contract Amount: $38,890,082 ($38.9M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2009-01-31

Contract Duration: 488 days

Daily Burn Rate: $79.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE OF EXPANDED METAL ARMOR

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $38.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: PURCHASE OF EXPANDED METAL ARMOR Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The fixed-price contract structure aims to control costs, but the lack of competition limits benchmarking. 3. Performance period spans over a year, indicating a need for sustained supply of this specialized armor. 4. The contract falls within the broader defense manufacturing sector, supporting armored vehicle components. 5. No small business set-aside was utilized, suggesting the primary contractor is a large entity. 6. The award value is significant, reflecting the specialized nature and material costs of advanced armor.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging due to its sole-source nature and the specialized product. The award amount of approximately $38.9 million for expanded metal armor over a 488-day period suggests a substantial per-unit cost. Without competitive bids, it's difficult to definitively assess if this represents excellent value for money. However, the firm fixed-price contract type provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or proprietary rights to fulfill the requirement. The lack of competition means there were no other bidders to compare against, potentially limiting the government's ability to secure the lowest possible price through market forces.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding processes.

Public Impact

The primary beneficiary is the Department of the Army, receiving critical armor components for its vehicles. The contract delivers expanded metal armor, a key protective element for military platforms. The geographic impact is primarily within the United States, supporting domestic defense manufacturing. Workforce implications include employment at BAE Systems and its supply chain, particularly in manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source award limits transparency in pricing and value assessment.
Reliance on a single supplier could pose supply chain risks if issues arise with the contractor.
No small business participation is explicitly noted, potentially limiting broader economic impact.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contract supports critical defense needs for armored vehicle protection.
Award to an established defense contractor like BAE Systems suggests a level of proven capability.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on the production of specialized armor components. The North American Industry Classification System (NAICS) code 331315, 'Aluminum Sheet, Plate, and Foil Manufacturing,' indicates the raw materials involved. The market for military armor is driven by defense spending and the evolving threats faced by armed forces, requiring advanced materials and manufacturing techniques. Comparable spending benchmarks are difficult to ascertain without more specific product details and competitive data.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award was made directly to BAE Systems Land & Armaments L.P., a large defense contractor. This suggests that subcontracting opportunities for small businesses may exist within BAE Systems' supply chain, but there is no direct contractual obligation for them to participate in this specific award. The impact on the small business ecosystem is therefore indirect, relying on the prime contractor's procurement practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the Department of Defense Inspector General (IG) for potential fraud, waste, and abuse. Transparency is limited due to the sole-source nature, but contract award data is publicly available through federal procurement databases. Accountability measures are inherent in the firm fixed-price contract terms, which hold the contractor responsible for delivering the specified goods within the agreed price.

Related Government Programs

Department of Defense Vehicle Procurement
Military Vehicle Armor Systems
Defense Industrial Base Manufacturing
BAE Systems Land & Armaments Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.9 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. PURCHASE OF EXPANDED METAL ARMOR

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 $38.9 million.

What is the period of performance?

Start: 2007-10-01. End: 2009-01-31.

What is the specific type and application of the 'expanded metal armor' being purchased?

The term 'expanded metal armor' typically refers to a type of protective plating made from a metal sheet that has been slit and stretched to form a diamond-shaped mesh. This mesh can be used as a component in composite armor systems or as a standalone protective layer for military vehicles, aircraft, or personnel. Its open structure can provide protection against certain threats, such as fragmentation or shaped charges, while potentially offering weight savings compared to solid armor plates. The specific application within the Department of Defense would likely be for enhancing the survivability of ground combat vehicles or other tactical platforms against battlefield threats.

How does the $38.9 million award compare to historical spending on similar armor systems by the Department of Defense?

Direct comparison of this $38.9 million award to historical spending on 'expanded metal armor' is challenging without more granular data on specific product types and contract vehicles. Defense spending on armor is highly variable, influenced by evolving threat assessments, technological advancements, and the specific platforms being protected. Larger programs for vehicle upgrades or new platform acquisitions often involve hundreds of millions or even billions of dollars, with armor being a significant cost component. Smaller, specialized procurements like this one for specific armor materials would represent a fraction of overall defense spending. The sole-source nature of this award also complicates direct price comparisons with previously competed contracts for similar materials.

What are the key risks associated with a sole-source award for critical defense components like armor?

The primary risk associated with a sole-source award for critical defense components like armor is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may pay more than necessary. Another significant risk is reduced innovation and responsiveness, as the sole provider may have less incentive to improve products or delivery timelines. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if the contractor experiences production issues, quality control problems, or financial instability, the government's ability to procure essential armor could be severely impacted, potentially delaying critical military operations or vehicle fielding.

What is BAE Systems Land & Armaments L.P.'s track record with Department of Defense armor contracts?

BAE Systems Land & Armaments L.P. is a major defense contractor with a substantial track record in providing armored vehicles and related components to the Department of Defense. They are involved in numerous programs, including the production and sustainment of Abrams tanks, Bradley Fighting Vehicles, and other armored platforms. Their experience encompasses the design, manufacturing, and integration of various armor technologies, including advanced composite materials and reactive armor systems. While specific details on their performance for 'expanded metal armor' are not provided in this data, their overall history suggests they possess the manufacturing capabilities and security clearances necessary for such defense contracts. Past performance reviews and contract awards would offer further insight into their reliability and quality.

What are the implications of the 'Aluminum Sheet, Plate, and Foil Manufacturing' NAICS code for this contract?

The NAICS code 331315, 'Aluminum Sheet, Plate, and Foil Manufacturing,' indicates that the primary manufacturing activity related to this contract involves the production of aluminum in these forms. Expanded metal armor is often constructed from metal sheets that are then processed. This NAICS code suggests that the raw material or the initial processing stage of the armor material falls under this industrial classification. It implies that the contractor, or a key part of their supply chain, is involved in the fabrication of aluminum products. This classification helps in understanding the industrial sector and the type of manufacturing capabilities required for producing the specified armor components.

Industry Classification

NAICS: Manufacturing › Alumina and Aluminum Production and Processing › Aluminum Sheet, Plate, and Foil Manufacturing

Product/Service Code: METAL BARS, SHEETS, SHAPES

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,890,082

Exercised Options: $38,890,082

Current Obligation: $38,890,082

Timeline