DoD Awards BAE Systems $51M for M113A2MK1 Upgrade Hardware and Services for Brazil
Contract Overview
Contract Amount: $51,003,777 ($51.0M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2015-07-16
End Date: 2019-12-31
Contract Duration: 1,629 days
Daily Burn Rate: $31.3K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THIS LETTER CONTRACT IS TO FUND THE UPGRADE HARDWARE, TOOLING, CONTRACTOR TECHNICAL SERVICES FOR THE M113A2MK1 UPGRADE PROGRAM FOR THE COUNTRY OF BRAZIL
Place of Performance
Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95119
Plain-Language Summary
Department of Defense obligated $51.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: THIS LETTER CONTRACT IS TO FUND THE UPGRADE HARDWARE, TOOLING, CONTRACTOR TECHNICAL SERVICES FOR THE M113A2MK1 UPGRADE PROGRAM FOR THE COUNTRY OF BRAZIL Key points: 1. Contract focuses on hardware, tooling, and technical services for a specific vehicle upgrade. 2. Sole-source award to BAE Systems, indicating limited competition. 3. Significant taxpayer investment in military hardware for a foreign ally. 4. The sector is dominated by large defense contractors with specialized capabilities.
Value Assessment
Rating: fair
The contract value of $51M for hardware, tooling, and services appears substantial. Without specific benchmarks for M113A2MK1 upgrades or comparable international sales, a precise value assessment is difficult. The firm fixed-price structure offers some cost control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not available for competition, likely due to specialized knowledge or existing platform integration by BAE Systems. This lack of competition limits price discovery and potentially increases costs for the government.
Taxpayer Impact: Taxpayer funds are being used to procure military hardware upgrades for a foreign nation, impacting the defense budget and potentially influencing international relations.
Public Impact
Funds allocated for military hardware upgrades for an allied nation. Supports the modernization of armored vehicle fleets for international partners. Potential for technology transfer and strengthening of defense relationships.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated pricing.
- Potential for cost overruns on complex upgrade programs.
- Long-term sustainment costs for upgraded vehicles are not detailed.
Positive Signals
- Supports a key ally's military modernization efforts.
- Firm fixed-price contract provides cost certainty.
- Addresses specific upgrade requirements for a known platform.
Sector Analysis
This contract falls within the Defense Industrial Base, specifically focusing on armored vehicle manufacturing and upgrades. Spending in this sector is often driven by geopolitical needs and technological advancements, with significant capital investment required for R&D and production.
Small Business Impact
This contract was awarded directly to BAE Systems, a large prime contractor, and there is no indication of subcontracting opportunities for small businesses within the provided data. The nature of specialized military hardware upgrades often favors large, established manufacturers.
Oversight & Accountability
The Department of the Army is the contracting agency. Oversight would typically involve program management, contract administration, and quality assurance to ensure deliverables meet specifications and budget constraints. The firm fixed-price nature implies less financial oversight is needed for cost changes.
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 limits competitive pricing.
- Potential for cost creep in upgrade programs.
- Lack of transparency on specific technical requirements.
- Focus on foreign military sales rather than domestic needs.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. THIS LETTER CONTRACT IS TO FUND THE UPGRADE HARDWARE, TOOLING, CONTRACTOR TECHNICAL SERVICES FOR THE M113A2MK1 UPGRADE PROGRAM FOR THE COUNTRY OF BRAZIL
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 $51.0 million.
What is the period of performance?
Start: 2015-07-16. End: 2019-12-31.
What is the specific technical scope of the 'upgrade hardware' and 'contractor technical services' for the M113A2MK1, and how does this scope justify a sole-source award?
The provided data lacks specific details on the technical scope of the upgrade. A sole-source justification typically relies on factors like unique capabilities, proprietary technology, essential integration with existing systems, or urgent needs where only one source can fulfill the requirement. Further documentation would be needed to assess the validity of this justification.
How does the $51 million contract value compare to historical upgrade costs for similar armored vehicles, and what is the projected return on investment for Brazil?
Benchmarking this $51 million contract against historical upgrade costs for similar armored vehicles is challenging without access to detailed cost data for comparable programs. The return on investment for Brazil is primarily strategic, relating to enhanced defense capabilities and operational readiness, rather than a direct financial return.
What are the long-term implications of this contract for US foreign military sales policy and the sustainment of M113 variants globally?
This contract highlights the US commitment to supporting allied military modernization through hardware sales and services. It reinforces the M113 platform's continued relevance and the role of US defense contractors in global military logistics. Long-term implications include potential follow-on sustainment contracts and the standardization of upgrade packages among allied forces.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV15R0062
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 1205 COLEMAN AVE, SANTA CLARA, CA, 95050
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: $52,364,772
Exercised Options: $51,003,777
Current Obligation: $51,003,777
Subaward Activity
Number of Subawards: 35
Total Subaward Amount: $30,479,685
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-07-16
Current End Date: 2019-12-31
Potential End Date: 2019-12-31 12:12:00
Last Modified: 2018-10-05
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