DoD Awards BAE Systems $431.8M for 53 Army Vehicles and ASL Sets
Contract Overview
Contract Amount: $431,766,942 ($431.8M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2014-09-26
End Date: 2019-09-30
Contract Duration: 1,830 days
Daily Burn Rate: $235.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: M88 PRODUCTION PROCUREMENT OF 53 ARMY VEHICLES AND 3 SETS OF ASL
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $431.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: M88 PRODUCTION PROCUREMENT OF 53 ARMY VEHICLES AND 3 SETS OF ASL Key points: 1. Significant investment in armored vehicle production for the Army. 2. Sole-source award to BAE Systems, limiting competitive pricing. 3. Long contract duration (1830 days) may impact price adjustments. 4. Focus on military vehicle manufacturing within the defense sector.
Value Assessment
Rating: fair
The total award of $431.8 million for 53 vehicles and 3 ASL sets suggests a per-unit cost of approximately $8.15 million. Without specific details on the vehicle type and ASL complexity, direct comparison is difficult, but this appears to be a substantial investment.
Cost Per Unit: $8,146,546
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to BAE Systems. This lack of competition limits the government's ability to leverage market forces for potentially lower prices and may result in a higher overall cost.
Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may not be receiving the best possible price for these critical Army vehicles.
Public Impact
Enhances Army's armored vehicle capabilities. Supports a major defense contractor's production line. Potential for long-term sustainment and upgrade contracts. Impacts readiness and operational effectiveness of ground forces.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Long contract duration may lead to cost overruns.
- Lack of transparency in pricing justification.
Positive Signals
- Procures essential military hardware.
- Supports domestic manufacturing capabilities.
Sector Analysis
This contract falls within the Defense sector, specifically military vehicle manufacturing. Spending benchmarks for similar large-scale armored vehicle procurements can vary widely based on vehicle type, technology, and quantity, but this award represents a significant allocation of resources.
Small Business Impact
The contract was awarded to BAE Systems Land & Armaments L.P., a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The contract was awarded by the Department of the Army. Oversight would typically involve program management, quality assurance, and financial tracking to ensure delivery of specified vehicles and adherence to contract terms. The sole-source nature warrants close scrutiny of cost and performance.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for cost overruns due to long contract duration.
- Limited transparency on specific vehicle capabilities and justification.
- No clear indication of small business participation.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $431.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. M88 PRODUCTION PROCUREMENT OF 53 ARMY VEHICLES AND 3 SETS OF ASL
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 $431.8 million.
What is the period of performance?
Start: 2014-09-26. End: 2019-09-30.
What is the specific type of Army vehicle being procured and what are the key capabilities it provides to justify the significant per-unit cost?
The specific vehicle type is not detailed in the provided data, but it is identified as M88 Production Procurement. The M88 is an armored recovery vehicle, crucial for battlefield logistics, enabling the recovery, repair, and evacuation of damaged or disabled armored vehicles. Its robust design and recovery capabilities justify a higher cost due to specialized engineering and materials required for heavy-duty operations in combat zones.
Given the sole-source nature of this award, what mechanisms are in place to ensure BAE Systems is providing a fair and reasonable price to the government?
For sole-source contracts, the government typically requires detailed cost proposals from the contractor, including data on labor, materials, and overhead. Agencies often conduct 'should-cost' analyses and negotiations to ensure the price is fair and reasonable. However, the lack of competitive bidding inherently reduces the government's leverage in price discovery, making robust negotiation and cost auditing critical.
How does the procurement of these M88 vehicles align with current Army modernization strategies and overall defense readiness objectives?
The M88 is a vital component of armored formations, ensuring operational readiness by maintaining the fleet's mobility and availability. Procuring these vehicles supports the Army's objective of maintaining a capable and responsive ground force. Their role in battlefield recovery is essential for sustaining combat power and minimizing downtime of other high-value assets, directly contributing to overall defense readiness.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV14R0255
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC
Address: 1100 BAIRS RD, YORK, PA, 17408
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,061,455,146
Exercised Options: $431,766,942
Current Obligation: $431,766,942
Subaward Activity
Number of Subawards: 570
Total Subaward Amount: $232,982,408
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-09-26
Current End Date: 2019-09-30
Potential End Date: 2019-09-30 12:09:00
Last Modified: 2022-08-05
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