DoD awards $31.2M for AMPV/M113 vehicle support, a sole-source contract with BAE Systems

Contract Overview

Contract Amount: $31,247,646 ($31.2M)

Contractor: BAE Systems Land and Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2021-07-07

End Date: 2026-07-06

Contract Duration: 1,825 days

Daily Burn Rate: $17.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS TASK ORDER IS FOR RECURRING TERM EFFORTS IN SUPPORT OF SYSTEM TECHNICAL SUPPORT (STS), SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS), AND POST PRODUCTION SUSTAINMENT SUPPORT (PPSS) SERVICES FOR THE AMPV/ M113 FAMILY OF VEHICLES.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48312

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $31.2 million to BAE SYSTEMS LAND AND ARMAMENTS L.P. for work described as: THIS TASK ORDER IS FOR RECURRING TERM EFFORTS IN SUPPORT OF SYSTEM TECHNICAL SUPPORT (STS), SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS), AND POST PRODUCTION SUSTAINMENT SUPPORT (PPSS) SERVICES FOR THE AMPV/ M113 FAMILY OF VEHICLES. Key points: 1. Contract focuses on critical sustainment and technical support for armored vehicles. 2. Sole-source award raises questions about potential price overruns and limited market engagement. 3. Long-term contract duration (5 years) suggests a need for sustained, specialized expertise. 4. Performance is tied to BAE Systems' established role in AMPV/M113 programs. 5. Engineering services sector sees significant investment in vehicle lifecycle management. 6. Lack of competition may limit opportunities for innovative solutions from other firms.

Value Assessment

Rating: fair

The contract value of $31.2 million over five years for sustainment and technical support of the AMPV/M113 family of vehicles appears reasonable given the specialized nature of armored vehicle maintenance. However, without competitive bidding, it is difficult to benchmark the pricing against market alternatives or assess if taxpayers are receiving the best possible value. The cost-plus-fixed-fee structure necessitates close oversight to manage costs effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, BAE Systems Land and Armaments L.P., was considered. This approach is typically used when a specific capability is required that only one contractor possesses, or in situations where urgency or a lack of viable alternatives dictates. The absence of a competitive process means that the government did not explore pricing or service options from other potential providers.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the benefit of competitive pressure on pricing is lost. It also limits the government's ability to leverage a broader market for potentially more innovative or cost-effective solutions.

Public Impact

The U.S. Army benefits from continued operational readiness of its AMPV/M113 armored vehicle fleet. Services include technical support, sustainment, and post-production support, ensuring vehicle longevity and performance. The geographic impact is primarily within the U.S. Army's operational and maintenance infrastructure. Workforce implications include the need for specialized technicians and engineers familiar with these specific vehicle platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost-plus-fixed-fee contract requires diligent oversight to control expenditures.
Long-term commitment may reduce flexibility to adapt to changing technological needs.

Positive Signals

Leverages existing contractor expertise with the AMPV/M113 vehicle family.
Ensures continuity of essential support services for critical defense assets.
Addresses long-term sustainment needs, contributing to fleet readiness.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense equipment lifecycle management. The market for defense vehicle sustainment is often dominated by a few large prime contractors who have established relationships and specialized knowledge. Spending in this area is critical for maintaining military readiness and involves significant long-term investments in maintenance, repair, and upgrade services.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting opportunities for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless BAE Systems actively engages small businesses for specialized support services.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Given the cost-plus-fixed-fee structure, rigorous financial oversight and performance monitoring are crucial to ensure cost control and adherence to the statement of work. Transparency may be limited due to the sole-source nature, but contract performance reports and audits would be standard accountability measures.

Related Government Programs

Armored Vehicle Modernization Programs
Army Logistics and Sustainment Contracts
Defense Vehicle Maintenance and Repair
BAE Systems Defense Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.2 million to BAE SYSTEMS LAND AND ARMAMENTS L.P.. THIS TASK ORDER IS FOR RECURRING TERM EFFORTS IN SUPPORT OF SYSTEM TECHNICAL SUPPORT (STS), SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS), AND POST PRODUCTION SUSTAINMENT SUPPORT (PPSS) SERVICES FOR THE AMPV/ M113 FAMILY OF VEHICLES.

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 $31.2 million.

What is the period of performance?

Start: 2021-07-07. End: 2026-07-06.

What is BAE Systems' track record with the AMPV/M113 family of vehicles?

BAE Systems has a long-standing and extensive history with the M113 family of vehicles, including its role as the prime contractor for the Armored Multi-Purpose Vehicle (AMPV) program, which is intended to replace many M113 variants. Their expertise encompasses design, manufacturing, and sustainment. This deep involvement suggests a strong understanding of the vehicles' technical requirements, operational history, and maintenance needs. The company's performance on previous contracts related to these platforms would be a key indicator of their capability to fulfill the current sustainment and technical support requirements effectively.

How does the pricing of this contract compare to similar sustainment efforts for armored vehicles?

Benchmarking the pricing for this $31.2 million, five-year contract is challenging due to its sole-source nature. Typically, competitive solicitations allow for direct comparison of bids and the identification of the most cost-effective option. For sole-source contracts, especially cost-plus-fixed-fee arrangements, the government relies on historical pricing data, should-cost analyses, and negotiation to ensure fair and reasonable pricing. Without access to comparable competitive bids for similar sustainment services on other armored vehicle platforms, it's difficult to definitively state if this contract represents optimal value for money. However, the specialized nature of armored vehicle support often commands higher costs than general equipment maintenance.

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

The primary risks associated with this sole-source contract include potential cost overruns due to the lack of competitive pressure, which can lead to less favorable pricing for the government. There's also a risk of reduced innovation, as a single provider may have less incentive to introduce cost-saving or performance-enhancing improvements compared to a competitive environment. Furthermore, reliance on a single contractor can create vendor lock-in, making it difficult and costly to switch providers in the future if performance issues arise or better alternatives become available. The cost-plus-fixed-fee structure itself carries inherent risk if not managed with rigorous oversight, as it can incentivize higher spending.

How effective is the cost-plus-fixed-fee (CPFF) contract type for ensuring program effectiveness in this context?

The Cost-Plus-Fixed-Fee (CPFF) contract type aims to balance risk between the government and the contractor. The contractor is reimbursed for allowable costs and paid a fixed fee representing profit. This structure can be effective for complex, long-term sustainment efforts where the scope may evolve or is not fully defined at the outset, such as ongoing technical support. It incentivizes the contractor to control costs to protect their fixed fee. However, its effectiveness hinges critically on robust government oversight to scrutinize costs, ensure compliance with the contract terms, and prevent scope creep that inflates the overall cost without commensurate benefit. Without diligent management, CPFF contracts can become more expensive than fixed-price alternatives.

What are the historical spending patterns for AMPV/M113 sustainment and support?

Historical spending on the sustainment and support of the M113 family of vehicles, and increasingly the AMPV program, has been substantial over decades, reflecting the long service life of these platforms and their critical role in Army operations. While specific figures for past sustainment contracts are not provided here, it is understood that such efforts represent a significant portion of the overall lifecycle costs for armored vehicles. Spending typically includes maintenance, repair, spare parts, technical data, and engineering support. The transition to the AMPV is also driving new sustainment investments. This $31.2 million award represents a continuation and likely an increase in dedicated funding for the evolving sustainment needs of this vehicle fleet.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: Compagnie DE Developpement DE L'eau S.A.

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

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: $31,247,646

Exercised Options: $31,247,646

Current Obligation: $31,247,646

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV21D0018

IDV Type: IDC

Timeline