DoD awards $25.1M contract for Bradley vehicle conversion, raising questions on competition and value

Contract Overview

Contract Amount: $25,117,601 ($25.1M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2016-04-01

End Date: 2018-03-31

Contract Duration: 729 days

Daily Burn Rate: $34.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONVERSION OF BRADLEY M3 TO M2 VEHICLES.

Place of Performance

Location: YORK, YORK County, PENNSYLVANIA, 17408

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $25.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: CONVERSION OF BRADLEY M3 TO M2 VEHICLES. Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. The firm-fixed-price structure aims to control costs, but the lack of competition is a concern. 3. Performance period of 729 days suggests a focused effort on a specific set of vehicles. 4. The contract falls under the broad category of armored vehicle manufacturing, a critical defense sector. 5. No small business set-aside was utilized, indicating potential missed opportunities for smaller firms. 6. The contract's value is moderate within the context of large defense procurement programs.

Value Assessment

Rating: fair

The contract value of approximately $25.1 million for the conversion of Bradley M3 to M2 vehicles is difficult to benchmark without more specific details on the scope of work and the number of vehicles converted. However, given the lack of competition, it is challenging to definitively assess if this represents excellent value for money. The firm-fixed-price nature of the contract provides some cost certainty, but the absence of competitive bids means there's no market validation of the pricing.

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. This approach is typically used when only one source is capable of meeting the requirement, or in situations where competition is not feasible or practical. The lack of multiple bidders means there was no opportunity for price negotiation based on competitive offers, which can lead to higher prices than if the contract had been competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government did not benefit from the potential cost savings that often result from a competitive bidding process.

Public Impact

The primary beneficiaries are the U.S. Army, which will receive upgraded Bradley fighting vehicles. The services delivered involve the conversion of existing M3 Bradley vehicles to the M2 configuration, enhancing their combat capabilities. The geographic impact is primarily within the United States, likely at defense manufacturing facilities. Workforce implications include skilled labor in manufacturing, engineering, and logistics within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits transparency in pricing and value assessment.
Potential for contractor lock-in due to specialized nature of defense vehicle modifications.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Focus on upgrading existing platforms can be a cost-effective strategy compared to new procurement.
BAE Systems is an established defense contractor with expertise in armored vehicles.

Sector Analysis

This contract falls within the defense industrial base, specifically the manufacturing of armored vehicles. The market for military vehicles is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Spending in this sector is driven by national security needs and geopolitical factors. Comparable spending benchmarks would involve other major vehicle upgrade or production contracts within the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The prime contractor, BAE Systems, is a large defense manufacturer. This suggests that the primary benefits of this contract will flow to large businesses, and opportunities for small businesses would likely be through indirect subcontracting, if any.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specific outcomes at an agreed-upon price. Transparency is limited by the sole-source nature of the award, but contract details and performance reports are usually available through federal procurement databases.

Related Government Programs

Bradley Fighting Vehicle Systems
Armored Multi-Purpose Vehicle (AMPV) Program
Ground Combat Vehicle (GCV) Program (historical)
U.S. Army Vehicle Modernization Initiatives

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.1 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. CONVERSION OF BRADLEY M3 TO M2 VEHICLES.

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 $25.1 million.

What is the period of performance?

Start: 2016-04-01. End: 2018-03-31.

What is the specific technical scope of the M3 to M2 Bradley conversion, and what capabilities are being added or enhanced?

The conversion of the Bradley M3 (Cavalry Fighting Vehicle) to the M2 (Infantry Fighting Vehicle) configuration typically involves modifications to enhance its infantry support role. While the provided data does not detail the specific technical scope, common upgrades might include changes to the turret, armament systems, or internal layout to better accommodate infantry squads. The M2 variant is designed for transporting infantry and providing direct fire support, whereas the M3 variant is more focused on reconnaissance and command and control. The exact nature of the conversion would dictate the specific technical work performed by BAE Systems.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For defense platforms like the Bradley, sole-source awards might occur if the modification requires highly specialized knowledge, proprietary technology, or if the original equipment manufacturer (OEM) is the only entity capable of performing the conversion without significant risk or delay. Without further justification from the Department of the Army, the precise reason for the sole-source award remains unclear but likely relates to the specialized nature of the upgrade.

How does the cost of this conversion compare to the cost of procuring new M2 Bradley vehicles or other similar armored vehicles?

Direct cost comparison is challenging without detailed pricing breakdowns for this specific conversion contract and current market prices for new M2 Bradleys or comparable vehicles. However, converting existing platforms is generally intended to be more cost-effective than procuring entirely new vehicles, as it leverages existing platforms and avoids the full cost of new production. The $25.1 million contract value, spread over an unspecified number of vehicles, needs to be evaluated against the cost savings achieved by upgrading rather than replacing. The lack of competition complicates a definitive value assessment.

What is BAE Systems' track record with Bradley vehicle production and upgrades?

BAE Systems Land & Armaments L.P. has a long and established history with the Bradley Fighting Vehicle family. As a primary contractor and manufacturer, they have been involved in the production, sustainment, and modernization of Bradleys for decades. Their expertise encompasses various upgrades and configurations of the platform. This extensive experience suggests they possess the necessary technical knowledge and manufacturing capabilities to perform the M3 to M2 conversion effectively. Their track record in delivering complex armored vehicle programs is generally considered strong within the defense industry.

What are the potential risks associated with this sole-source conversion contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without market pressure, the contractor may not have the same incentive to offer the lowest possible price. Another risk is contractor performance; while BAE Systems has a strong track record, any sole-source award carries a degree of risk if issues arise, as alternative options are limited. Furthermore, the long-term sustainment costs and availability of spare parts for the converted vehicles could be a consideration, although this is less of a direct risk of the conversion contract itself.

How does this contract fit into the broader modernization strategy for the U.S. Army's armored vehicle fleet?

This contract likely represents a component of the U.S. Army's ongoing efforts to modernize its ground combat vehicle fleet. Converting M3 Bradleys to the M2 configuration addresses the need for versatile infantry fighting vehicles capable of supporting ground operations. It aligns with strategies that balance the acquisition of new platforms with the cost-effective upgrading of existing, proven systems. Such conversions can extend the service life of valuable assets and ensure they meet current operational requirements, contributing to the overall readiness and capability of the Army's armored formations.

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: W56HZV15R0149

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: $25,117,601

Exercised Options: $25,117,601

Current Obligation: $25,117,601

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $1,589,620

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline