DoD Awards BAE Systems $817M for 164 Bradley Fighting Vehicles Amidst Production Concerns
Contract Overview
Contract Amount: $816,977,021 ($817.0M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2018-06-14
End Date: 2025-05-31
Contract Duration: 2,543 days
Daily Burn Rate: $321.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: A4 UCA FOR PRODUCTION OF 164 BRADLEY M2A4 AND M7A4 VEHICLES
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $817.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: A4 UCA FOR PRODUCTION OF 164 BRADLEY M2A4 AND M7A4 VEHICLES Key points: 1. Significant investment in armored vehicle production, with BAE Systems as the sole awardee. 2. High contract value raises questions about cost-effectiveness and potential for overspending. 3. Lack of competition suggests limited price discovery and potential for inflated costs. 4. Focus on production efficiency and delivery timelines is critical for meeting defense needs.
Value Assessment
Rating: questionable
The contract value of $817 million for 164 vehicles results in a per-unit cost of approximately $5 million. This is a substantial investment, and without competitive benchmarking, it's difficult to assess if this price is optimal compared to similar armored vehicle production contracts.
Cost Per Unit: $5,001,710
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to BAE Systems. The absence of competition limits price discovery and may prevent the government from securing the most favorable terms and pricing.
Taxpayer Impact: The sole-source nature of this large contract raises concerns about taxpayer value, as competitive bidding could potentially lead to lower costs for these critical defense assets.
Public Impact
Ensures continued production of vital Bradley Fighting Vehicles for the U.S. Army. Supports advanced military capabilities through the M2A4 and M7A4 variants. Potential for long-term sustainment and upgrade contracts with the prime contractor. Impacts the defense industrial base and associated supply chains.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- High per-unit cost requires careful monitoring.
- Fixed Price Incentive contract type can lead to cost overruns if not managed properly.
- Long contract duration increases risk of scope creep and cost escalation.
Positive Signals
- Addresses critical need for modern armored vehicles.
- Secures production capacity with a known prime contractor.
- Potential for technological advancements in M2A4 and M7A4 variants.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on armored vehicle manufacturing. Spending benchmarks in this area are highly variable, influenced by technological complexity, production volume, and geopolitical demand. The $817 million award is significant for this niche.
Small Business Impact
The contract data indicates that small business participation was not a stated factor (sb: false). This suggests that the prime contractor, BAE Systems, is likely handling the majority of the work, with limited direct subcontracting opportunities for small businesses on this specific award.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of Defense to ensure fair pricing, adherence to specifications, and timely delivery. Regular performance reviews and cost audits will be crucial for accountability.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition.
- Potential for cost overruns due to FPI contract type.
- High per-unit cost.
- Long contract duration.
- No stated 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 $817.0 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. A4 UCA FOR PRODUCTION OF 164 BRADLEY M2A4 AND M7A4 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 $817.0 million.
What is the period of performance?
Start: 2018-06-14. End: 2025-05-31.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. To ensure fair pricing, the government likely conducted a price analysis based on historical data, cost breakdowns from the contractor, and potentially market research for comparable systems. However, without competition, the government's leverage in price negotiation is reduced, making rigorous oversight essential.
How does the per-unit cost of the Bradley M2A4/M7A4 compare to previous production runs or similar armored vehicles from other nations?
Benchmarking the $5 million per-unit cost requires detailed comparison with specific historical data for Bradley production and contemporary armored vehicle programs. Factors like inflation, technological upgrades (e.g., advanced armor, digital systems), and production scale significantly influence costs. A thorough analysis would need to account for these variables to determine if the current pricing represents a fair market value or an escalation.
What are the specific performance metrics and delivery milestones tied to the Fixed Price Incentive contract, and what are the penalties for non-compliance?
The Fixed Price Incentive (FPI) contract structure means the contractor is incentivized to control costs, but the government shares in cost savings or overruns beyond target levels. Specific performance metrics likely include vehicle reliability, combat effectiveness, and adherence to technical specifications. Delivery milestones would detail phased production schedules. Penalties for non-compliance could involve withholding payments, contract termination, or liquidated damages, depending on the contract's specific clauses.
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: W56HZV16R0188
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Ball Corporation
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: $1,080,651,140
Exercised Options: $816,977,021
Current Obligation: $816,977,021
Actual Outlays: $1,753,867
Subaward Activity
Number of Subawards: 765
Total Subaward Amount: $1,477,281,589
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-06-14
Current End Date: 2025-05-31
Potential End Date: 2025-05-31 12:05:00
Last Modified: 2026-01-05
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