DoD's $575M Ground Combat Vehicle Tech Phase Awarded to BAE Systems Under Full and Open Competition
Contract Overview
Contract Amount: $575,142,929 ($575.1M)
Contractor: BAE Systems Land and Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2011-08-18
End Date: 2014-06-04
Contract Duration: 1,021 days
Daily Burn Rate: $563.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: TECHNOLOGY DEVELOPMENT PHASE OF THE GROUND COMBAT VEHICLE
Place of Performance
Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48312
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $575.1 million to BAE SYSTEMS LAND AND ARMAMENTS L.P. for work described as: TECHNOLOGY DEVELOPMENT PHASE OF THE GROUND COMBAT VEHICLE Key points: 1. Significant investment in advanced military technology development. 2. BAE Systems, a major defense contractor, secured the award. 3. Full and open competition suggests a robust price discovery process. 4. Fixed Price Incentive contract type aims to balance cost and performance.
Value Assessment
Rating: fair
The contract value of $575M for a technology development phase is substantial. Benchmarking against similar R&D contracts for complex weapon systems is difficult without more specific performance metrics and comparable projects.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The award was made under full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing and allows the government to select the best value offer.
Taxpayer Impact: Taxpayer funds are being invested in developing next-generation combat vehicle technology, with the potential for long-term defense capabilities. The competitive award process aims to ensure efficient use of these funds.
Public Impact
Advancement of military ground vehicle technology. Potential for enhanced soldier protection and battlefield effectiveness. Economic impact through defense contractor activity and potential job creation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Technology development phases can be prone to cost overruns and schedule delays.
- The effectiveness of the developed technology in real-world combat scenarios is yet to be determined.
- Long-term sustainment and upgrade costs for the vehicle are not addressed in this phase.
Positive Signals
- Awarded under full and open competition, suggesting competitive pricing.
- Fixed Price Incentive contract structure incentivizes contractor performance.
- Investment in critical defense modernization.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on armored vehicle manufacturing. Spending on major defense platforms like this is typical for modernization efforts, with costs varying widely based on complexity and quantity.
Small Business Impact
While BAE Systems is a large prime contractor, the subcontracting opportunities for small businesses are not detailed in this data. Large defense contracts often involve a network of suppliers, potentially including small businesses for specialized components or services.
Oversight & Accountability
The Department of the Army's acquisition process, including competitive bidding and contract management, provides oversight. However, the effectiveness of oversight in controlling costs and ensuring timely delivery for complex R&D projects remains a key accountability factor.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns in technology development.
- Uncertainty in achieving desired technological advancements.
- Long-term program viability and future funding.
- Effectiveness of the technology in operational environments.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, mi, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $575.1 million to BAE SYSTEMS LAND AND ARMAMENTS L.P.. TECHNOLOGY DEVELOPMENT PHASE OF THE GROUND COMBAT VEHICLE
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS LAND AND 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 $575.1 million.
What is the period of performance?
Start: 2011-08-18. End: 2014-06-04.
What is the projected lifecycle cost of the Ground Combat Vehicle program, and how does this initial technology development phase contribute to that overall budget?
The provided data only covers the technology development phase, with a value of $575M. Estimating the full lifecycle cost requires further program phases, including prototyping, testing, production, and sustainment. This initial phase is crucial for defining requirements and mitigating technical risks, but its contribution to the overall budget is only one part of a much larger, multi-year investment.
What specific performance improvements or technological advancements does this contract aim to achieve for the Ground Combat Vehicle, and how will these be measured?
The contract focuses on the 'TECHNOLOGY DEVELOPMENT PHASE,' implying the goal is to mature key technologies related to the Ground Combat Vehicle. Specific advancements are not detailed, but typically involve areas like survivability, mobility, lethality, and network integration. Success will be measured against technical performance specifications and milestones outlined in the contract, likely involving rigorous testing and evaluation.
Given the 'FIXED PRICE INCENTIVE' contract type, what are the defined target costs, ceiling prices, and incentive sharing mechanisms that govern cost control and contractor performance?
The data indicates a 'FIXED PRICE INCENTIVE' (FPI) contract type, which means there's a target cost, target profit, and a price ceiling. The contractor and the government share any cost savings or overruns relative to the target cost, up to the ceiling. Specific details on the target cost, ceiling price, and the sharing ratio (e.g., 80/20) are critical for understanding the financial risk and reward structure for both parties.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W56HZV11R0001
Offers Received: 3
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 2855 COOLIDGE HWY STE 300, TROY, MI, 48084
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: $575,142,929
Exercised Options: $575,142,929
Current Obligation: $575,142,929
Subaward Activity
Number of Subawards: 534
Total Subaward Amount: $516,178,879
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-08-18
Current End Date: 2014-06-04
Potential End Date: 2014-06-04 00:00:00
Last Modified: 2016-10-13
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