DoD awards BAE Systems $365M for Mobile Protected Firepower vehicles, with 3 bids received

Contract Overview

Contract Amount: $365,481,973 ($365.5M)

Contractor: BAE Systems Land and Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2018-12-17

End Date: 2024-07-31

Contract Duration: 2,053 days

Daily Burn Rate: $178.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MOBILE PROTECTED FIREPOWER ENGINEERING MANUFACTURING AND DEVELOPMENT / MIDDLE TIER ACQUISITION

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48312

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $365.5 million to BAE SYSTEMS LAND AND ARMAMENTS L.P. for work described as: MOBILE PROTECTED FIREPOWER ENGINEERING MANUFACTURING AND DEVELOPMENT / MIDDLE TIER ACQUISITION Key points: 1. Contract value of $365.5 million for engineering, manufacturing, and development of Mobile Protected Firepower vehicles. 2. Competition involved three bidders, suggesting a moderately competitive environment for this specialized defense acquisition. 3. The contract is a definitive contract with a firm-fixed-price type, indicating defined scope and cost certainty. 4. Performance is expected over approximately 2053 days, highlighting a long-term development and production cycle. 5. The acquisition falls under the Army's Middle Tier Acquisition (MTA) strategy, aiming for rapid prototyping and fielding. 6. The primary contractor, BAE Systems Land and Armaments L.P., has a significant presence in defense manufacturing.

Value Assessment

Rating: good

The contract value of $365.5 million for the Mobile Protected Firepower (MPF) program appears reasonable given the scope of engineering, manufacturing, and development for a complex armored vehicle system. Benchmarking against similar large-scale defense vehicle programs suggests that costs are within expected ranges for advanced military hardware. The firm-fixed-price structure provides cost control for the government, although the total value reflects the significant investment required for technological advancement and production readiness. Further analysis would require detailed cost breakdowns and comparisons to specific vehicle capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bids received. The presence of multiple bidders indicates that the market was accessible to qualified offerors, fostering a degree of price discovery. While three bidders suggest a competitive landscape, the specialized nature of advanced armored vehicle development might limit the pool of capable companies. The competition level is adequate for this type of acquisition, likely driving BAE Systems to offer competitive terms.

Taxpayer Impact: The full and open competition with multiple bids is beneficial for taxpayers as it encourages competitive pricing and ensures the government explores various solutions, potentially leading to better value for the significant investment in military modernization.

Public Impact

The primary beneficiaries are the U.S. Army soldiers who will operate the new Mobile Protected Firepower vehicles, enhancing infantry support capabilities. The contract will deliver advanced, mobile, and protected firepower platforms designed to support infantry in combat. The program's impact is primarily national, focusing on equipping a key branch of the U.S. military. This contract will likely support a significant number of jobs within BAE Systems and its supply chain, particularly in manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration (over 2000 days) could lead to potential cost overruns if not managed effectively.
Firm-fixed-price contracts can sometimes incentivize contractors to cut corners on quality if not rigorously overseen.
Reliance on a single prime contractor for such a critical system warrants close monitoring of performance and potential single points of failure.
The specialized nature of the technology may limit future flexibility or upgrade paths if not designed with modularity in mind.

Positive Signals

Awarded under full and open competition, indicating a healthy market response for this capability.
Firm-fixed-price contract type provides cost certainty for the government.
The contract is part of the Army's Middle Tier Acquisition strategy, designed for rapid fielding of critical capabilities.
BAE Systems is an established defense contractor with experience in armored vehicle production.
The contract specifies engineering, manufacturing, and development, suggesting a comprehensive approach to system readiness.

Sector Analysis

The defense sector, specifically military armored vehicle manufacturing, is characterized by high barriers to entry due to complex engineering requirements, stringent quality standards, and significant capital investment. This contract for Mobile Protected Firepower (MPF) vehicles fits within the broader landscape of modernizing ground combat systems. The market is dominated by a few large defense contractors capable of undertaking such programs. Spending in this sub-sector is driven by geopolitical factors, military modernization strategies, and the need to replace aging platforms with advanced capabilities. Comparable spending benchmarks would involve other major armored vehicle development and production contracts within the DoD.

Small Business Impact

This contract does not indicate a specific small business set-aside. Given the scale and complexity of developing and manufacturing advanced armored vehicles, the prime contract is likely awarded to a large defense corporation. However, BAE Systems will be expected to engage small businesses through subcontracting opportunities for components, specialized services, and materials. The extent of small business participation will depend on BAE Systems' subcontracting plan and the availability of qualified small businesses within the defense supply chain.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Army, likely through program executive offices and contracting command personnel responsible for ground vehicle acquisition. Accountability measures are embedded in the firm-fixed-price contract terms, performance milestones, and delivery schedules. Transparency is facilitated through contract award announcements and potential reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Combat Vehicles
Infantry Fighting Vehicles
Armored Personnel Carriers
Future Combat Systems
Ground Vehicle Modernization Programs

Risk Flags

Potential for schedule slippage due to complexity of new technology integration.
Risk of cost growth if unforeseen technical challenges arise during development.
Dependence on a single contractor for a critical defense capability.
Ensuring cybersecurity of advanced vehicle systems.
Supply chain vulnerabilities for specialized components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $365.5 million to BAE SYSTEMS LAND AND ARMAMENTS L.P.. MOBILE PROTECTED FIREPOWER ENGINEERING MANUFACTURING AND DEVELOPMENT / MIDDLE TIER ACQUISITION

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 $365.5 million.

What is the period of performance?

Start: 2018-12-17. End: 2024-07-31.

What is the track record of BAE Systems Land and Armaments L.P. in delivering complex armored vehicle programs for the U.S. Army?

BAE Systems Land and Armaments L.P. has a substantial and generally positive track record in delivering complex armored vehicle programs for the U.S. Army. They are a key player in the defense industry, known for producing vehicles such as the Bradley Fighting Vehicle and the Paladin Self-Propelled Howitzer. Their experience spans design, engineering, manufacturing, and sustainment of these critical platforms. While specific program timelines and costs can fluctuate, BAE Systems has consistently demonstrated the capability to meet the demanding requirements of military vehicle production. Their involvement in the Mobile Protected Firepower program leverages this extensive experience, positioning them as a capable prime contractor for this advanced system.

How does the value of this contract compare to other recent major armored vehicle development contracts?

The $365.5 million awarded to BAE Systems for the Mobile Protected Firepower (MPF) program is a significant but not unprecedented figure for the engineering, manufacturing, and development (EMD) phase of a major armored vehicle program. For context, similar programs like the U.S. Army's Optionally Manned Fighting Vehicle (OMFV) have seen development contracts in the hundreds of millions, and full production contracts for advanced vehicles can easily reach billions. The MPF program's value reflects the complexity of integrating advanced firepower, protection, and mobility into a relatively lightweight platform, as well as the associated testing and validation required during EMD. Compared to historical programs for tanks or heavy infantry vehicles, the MPF EMD value appears aligned with current market rates for cutting-edge military hardware development.

What are the primary risks associated with the development and manufacturing of the Mobile Protected Firepower vehicles under this contract?

The primary risks associated with the MPF program under this contract include technological maturity, integration challenges, schedule delays, and cost overruns. Developing a new, highly mobile, and survivable platform with advanced sensor and weapon systems presents inherent technological risks. Integrating these complex subsystems into a cohesive and functional vehicle requires significant engineering effort and can lead to unforeseen issues. Schedule delays are a common risk in large defense programs, potentially impacting the Army's modernization timeline. Cost overruns can occur if development proves more complex or expensive than initially estimated, especially with a firm-fixed-price contract where the government bears less direct cost risk but must manage scope and performance. Ensuring robust cybersecurity for the vehicle's digital systems is also a growing concern.

What is the expected effectiveness of the Mobile Protected Firepower vehicles once fielded, and how does this contract contribute to that?

The Mobile Protected Firepower (MPF) vehicles are expected to provide infantry brigades with essential mobile protected firepower, enabling them to engage enemy forces, breach obstacles, and provide direct fire support in complex terrain where heavier platforms cannot operate. This contract, covering engineering, manufacturing, and development (EMD), is crucial for achieving that effectiveness. It ensures the vehicle design is finalized, prototypes are built and rigorously tested, and the manufacturing processes are established to produce reliable, combat-ready vehicles. By awarding this contract, the Army is investing in the foundational stages necessary to deliver a capability that directly addresses a critical gap in infantry support, enhancing survivability and lethality on the modern battlefield.

How has spending on similar armored vehicle programs evolved over the past decade?

Spending on similar armored vehicle programs has seen fluctuations over the past decade, influenced by shifting geopolitical priorities, the winding down of major conflicts, and a renewed focus on near-peer competition. Initially, spending may have decreased post-Iraq and Afghanistan, but it has been increasing in recent years as the U.S. military prioritizes modernization and the development of next-generation platforms. Programs like the Armored Multi-Purpose Vehicle (AMPV) and the ongoing efforts for the Optionally Manned Fighting Vehicle (OMFV) represent significant investments. The trend is towards more technologically advanced, networked, and survivable vehicles, often with modular designs to allow for future upgrades. The MPF program aligns with this broader trend of investing in advanced ground combat systems to maintain technological superiority.

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: W56HZV18R0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 34201 VAN DYKE AVE, STERLING HEIGHTS, MI, 48312

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $1,013,885,212

Exercised Options: $365,481,973

Current Obligation: $365,481,973

Subaward Activity

Number of Subawards: 224

Total Subaward Amount: $137,565,621

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline