DoD awards $19.9M for MRAP sustainment parts to BAE Systems, raising concerns about competition

Contract Overview

Contract Amount: $19,932,153 ($19.9M)

Contractor: BAE Systems Tactical Vehicle Systems LP

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2010-05-25

Contract Duration: 601 days

Daily Burn Rate: $33.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MRAP SUSTAINMENT PARTS.

Place of Performance

Location: SEALY, COLORADO County, TEXAS, 77474

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $19.9 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP for work described as: MRAP SUSTAINMENT PARTS. Key points: 1. Significant award value for specialized vehicle parts. 2. Sole-source award to BAE Systems limits competitive pricing. 3. Potential risk of inflated costs due to lack of competition. 4. Defense sector spending on critical sustainment is high.

Value Assessment

Rating: questionable

The award of $19.9M for MRAP sustainment parts lacks a clear benchmark for comparison due to its sole-source nature. Without competitive bids, assessing whether this price is optimal for the government is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to BAE Systems Tactical Vehicle Systems LP. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: Taxpayer funds may be used inefficiently due to the absence of competitive bidding, potentially resulting in overpayment for sustainment parts.

Public Impact

Ensures operational readiness of MRAP vehicles. Supports critical defense supply chains. Potential for increased costs impacts overall defense budget.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for cost overruns

Positive Signals

Ensures availability of critical parts
Supports military readiness

Sector Analysis

Spending in the defense sector for vehicle sustainment is substantial, focusing on maintaining the operational readiness of aging fleets. This award falls within the typical range for specialized military vehicle components.

Small Business Impact

This contract was awarded to BAE Systems, a large prime contractor, and there is no indication of small business participation. The focus on specialized parts may limit opportunities for smaller suppliers.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure fair pricing and prevent potential waste. Accountability for the justification of non-competition is crucial.

Related Government Programs

Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns.
Limited transparency in pricing.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.9 million to BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP. MRAP SUSTAINMENT PARTS.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TACTICAL VEHICLE SYSTEMS LP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $19.9 million.

What is the period of performance?

Start: 2008-10-01. End: 2010-05-25.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of other responsible sources. For MRAP sustainment parts, it could relate to specific design requirements or existing manufacturer relationships that are deemed essential for compatibility and performance, thereby limiting competitive options.

What are the long-term cost implications of sole-source sustainment contracts for military vehicles?

Sole-source sustainment contracts can lead to higher long-term costs for the government. Without competitive pressure, the incumbent contractor may have less incentive to reduce prices or improve efficiency. This can result in sustained higher unit costs and potentially impact the overall lifecycle cost of the vehicle fleet.

How does the lack of competition affect the government's ability to ensure the quality of sustainment parts?

While a sole-source award doesn't inherently mean lower quality, the lack of competition can reduce the government's leverage in enforcing stringent quality standards. With fewer options, the government might be more reliant on the single supplier's quality control processes, making robust government inspection and acceptance procedures even more critical.

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: 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: 5000 INTERSTATE HWY 10 W, SEALY, TX, 10

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $30,675,775

Exercised Options: $19,932,153

Current Obligation: $19,932,153

Contract Characteristics

Cost or Pricing Data: NO

Timeline