DoD awards $52.4M to BAE Systems for armored vehicle technical support, a sole-source contract
Contract Overview
Contract Amount: $52,363,904 ($52.4M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2019-09-05
End Date: 2025-07-09
Contract Duration: 2,134 days
Daily Burn Rate: $24.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: THIS IS FOR THE ACQUISITION OF SYSTEM TECHNICAL SUPPORT (STS) AND SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS) SERVICES AS COMPLETION WORK DIRECTIVES.
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $52.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: THIS IS FOR THE ACQUISITION OF SYSTEM TECHNICAL SUPPORT (STS) AND SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS) SERVICES AS COMPLETION WORK DIRECTIVES. Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits price competition and may result in higher costs for taxpayers. 3. Contract duration extends over multiple years, suggesting a long-term need for these services. 4. The contract is for system technical support and sustainment, critical for operational readiness. 5. The awardee, BAE Systems, is a major defense contractor with extensive experience in this sector. 6. The contract value is significant, reflecting the complexity and importance of the services.
Value Assessment
Rating: fair
The contract is a cost-plus-fixed-fee type, which can lead to less predictable final costs compared to fixed-price contracts. Benchmarking against similar sole-source technical support contracts for armored vehicles is challenging due to limited public data. However, the fixed fee component provides some cost control for the government. The total value of $52.4 million over its period of performance suggests a substantial investment in maintaining critical defense systems.
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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary specialized capabilities or when urgency dictates. The lack of competition means that the government did not benefit from a competitive bidding process, which could have potentially driven down prices.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price is achieved.
Public Impact
The primary beneficiaries are the U.S. Army units operating and maintaining armored vehicles, ensuring their operational readiness. Services delivered include technical support and sustainment for critical defense systems. The geographic impact is primarily within the United States, supporting Army logistics and maintenance operations. Workforce implications include the employment of skilled technical personnel by BAE Systems to fulfill the contract requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing.
- Cost-plus-fixed-fee structure may lead to cost growth.
- Long contract duration could tie up significant funds.
- Dependence on a single contractor for critical support.
Positive Signals
- Awardee has extensive experience in defense systems.
- Contract ensures sustainment of vital military equipment.
- Fixed fee provides a baseline cost control.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on military vehicle manufacturing and sustainment. The market for defense technical support services is substantial, driven by the ongoing need to maintain complex and aging military platforms. BAE Systems is a key player in this market, providing a wide range of defense products and services. Comparable spending benchmarks would involve other major defense contracts for system sustainment and technical support for large platforms.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, BAE Systems, is a large defense corporation. There is no explicit information regarding subcontracting plans for small businesses within this specific award notice. The impact on the small business ecosystem is likely minimal for this particular contract, as it is a direct award to a prime.
Oversight & Accountability
Oversight for this contract is managed by the Department of the Army, likely through contracting officers and program managers. Accountability measures would include performance metrics, delivery schedules, and adherence to the cost-plus-fixed-fee agreement. Transparency is facilitated through contract award notices, though detailed performance data may be limited. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of the Army Procurement
- Defense Logistics Agency Support
- Armored Vehicle Maintenance Programs
- System Sustainment Contracts
- BAE Systems Defense Contracts
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Potential for cost overruns
- Limited price competition
Tags
defense, department-of-defense, department-of-the-army, armored-vehicle, technical-support, sustainment, sole-source, cost-plus-fixed-fee, bae-systems, delivery-order, pennsylvania
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $52.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. THIS IS FOR THE ACQUISITION OF SYSTEM TECHNICAL SUPPORT (STS) AND SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS) SERVICES AS COMPLETION WORK DIRECTIVES.
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 $52.4 million.
What is the period of performance?
Start: 2019-09-05. End: 2025-07-09.
What is the historical spending pattern for BAE Systems with the Department of the Army for similar technical support services?
Analyzing historical spending for BAE Systems with the Department of the Army for similar technical support services requires access to comprehensive federal procurement databases. While this specific award is for $52.4 million, BAE Systems has a long-standing relationship with the DoD, including the Army, across various platforms and services. Their portfolio includes significant contracts for armored vehicle production, upgrades, and sustainment. Past awards for technical support and sustainment have often been substantial, reflecting the complexity and longevity of military hardware. Without specific historical data for 'System Technical Support (STS) and Sustainment System Technical Support (SSTS)' under completion work directives, it's difficult to provide precise figures. However, BAE Systems' consistent presence as a prime contractor suggests a pattern of significant, multi-year engagements for sustainment and support, often in the hundreds of millions or even billions of dollars cumulatively over time for their various product lines.
How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for this type of service in terms of value for money?
The Cost-Plus-Fixed-Fee (CPFF) contract type, used here, reimburses the contractor for allowable costs plus a fixed fee representing profit. This structure is often employed when the scope of work is not precisely defined or is expected to evolve, as might be the case with technical support and sustainment. While it offers flexibility, it carries a higher risk of cost overruns for the government compared to fixed-price contracts, as the contractor is incentivized to incur costs to achieve the fixed fee. For value for money, fixed-price contracts generally offer better price certainty. However, in situations where technical requirements are uncertain or require extensive research and development, CPFF can be appropriate. The 'fair' rating for value reflects the inherent trade-offs: flexibility and contractor expertise are gained, but at the expense of direct cost control and competitive pricing, especially given this is a sole-source award.
What are the specific performance metrics or key performance indicators (KPIs) associated with this contract?
The provided data does not detail the specific performance metrics or Key Performance Indicators (KPIs) for this contract. Typically, for System Technical Support (STS) and Sustainment System Technical Support (SSTS) contracts, KPIs would focus on areas such as system availability, response times for technical assistance, resolution rates for reported issues, turnaround times for repairs or upgrades, and adherence to maintenance schedules. The effectiveness of the contractor's performance would be measured against these predefined standards. The Department of the Army, through its contracting officer's representatives (CORs), would monitor these metrics to ensure the contractor is meeting its obligations and delivering the required level of support for the armored vehicle systems. The fixed fee component of the contract would likely be tied to the achievement of these performance standards.
What is the potential risk associated with relying on a single contractor (BAE Systems) for critical armored vehicle sustainment?
Relying on a single contractor, like BAE Systems, for critical armored vehicle sustainment presents several potential risks. Firstly, there's a risk of vendor lock-in, where the government becomes heavily dependent on the contractor's proprietary knowledge, processes, and parts, making it difficult and costly to switch providers in the future. Secondly, the lack of competition inherent in a sole-source award can reduce the incentive for the contractor to innovate or offer cost reductions over time. Thirdly, if BAE Systems faces financial difficulties, operational disruptions, or strategic shifts, it could directly impact the Army's ability to maintain its armored fleet, potentially affecting national security readiness. Finally, without competitive pressure, there's a risk that pricing could become less favorable over the contract's lifespan compared to a scenario with multiple competing vendors.
How does this contract's value compare to the overall spending on armored vehicle maintenance and support within the Department of the Army?
The $52.4 million awarded to BAE Systems represents a specific allocation for System Technical Support (STS) and Sustainment System Technical Support (SSTS) for armored vehicles under completion work directives. The Department of the Army's overall spending on armored vehicle maintenance and support is significantly larger, encompassing a wide array of activities. This includes depot-level maintenance, spare parts procurement, upgrades, field-level repairs, and other sustainment services managed through numerous contracts and internal resources. While $52.4 million is a substantial sum for a single contract, it is likely a component of a broader sustainment strategy. Benchmarking this specific contract's value against the total Army budget for vehicle sustainment would require a comprehensive analysis of all related procurement and maintenance expenditures, which often run into billions of dollars annually across the entire fleet.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
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: $52,363,904
Exercised Options: $52,363,904
Current Obligation: $52,363,904
Subaward Activity
Number of Subawards: 24
Total Subaward Amount: $5,264,413
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV19D0040
IDV Type: IDC
Timeline
Start Date: 2019-09-05
Current End Date: 2025-07-09
Potential End Date: 2025-07-09 12:07:00
Last Modified: 2025-09-11
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