DoD awards $271.7K task order for armored vehicle engineering services to BAE Systems

Contract Overview

Contract Amount: $81,184,029 ($81.2M)

Contractor: BAE Systems Land and Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2021-09-10

End Date: 2027-03-31

Contract Duration: 2,028 days

Daily Burn Rate: $40.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ARMORED MULTIPURPOSE VEHICLE STS CONTRACT, TASK ORDER ESTABLISHES RAMP SEAL TERM WORD DIRECTIVE FOV-R-21-F0378-011 FOR 1,620 HOURS IN THE AMOUNT OF $271,700.48.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48312

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $81.2 million to BAE SYSTEMS LAND AND ARMAMENTS L.P. for work described as: ARMORED MULTIPURPOSE VEHICLE STS CONTRACT, TASK ORDER ESTABLISHES RAMP SEAL TERM WORD DIRECTIVE FOV-R-21-F0378-011 FOR 1,620 HOURS IN THE AMOUNT OF $271,700.48. Key points: 1. Contract awarded for specialized engineering services related to armored vehicle systems. 2. The contract is a cost-plus-fixed-fee type, indicating potential for cost overruns. 3. Duration of the task order extends over five years, suggesting a long-term need. 4. The award was not competed, raising questions about potential price efficiencies. 5. Services are for ramp seal term word directive, a specific technical component. 6. The contract value is relatively small for a major defense contractor like BAE Systems.

Value Assessment

Rating: fair

The awarded amount of $271,700.48 for 1,620 hours of engineering services appears to be within a reasonable range for specialized defense engineering. However, without specific benchmarks for 'ramp seal term word directive' services, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee structure introduces risk, as actual costs could exceed the initial estimate, though the fixed fee component provides some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source, not competed, action. This means that only one bidder, BAE Systems Land and Armaments L.P., was considered for this specific task order. The lack of competition limits the government's ability to explore alternative solutions or secure potentially lower pricing through a competitive bidding process.

Taxpayer Impact: The absence of competition means taxpayers may not have received the benefit of a lower price that could have been achieved through a more open bidding process.

Public Impact

The Department of the Army benefits from specialized engineering expertise for its armored vehicle fleet. Services will ensure the proper functioning of critical components in armored vehicles. The contract supports ongoing maintenance and upgrade efforts for military hardware. Workforce implications are likely within BAE Systems' existing engineering teams.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee contract type can lead to cost overruns if not managed carefully.
Sole-source awards can indicate potential for contractor lock-in or limited market options.

Positive Signals

Award to an established defense contractor with a track record in vehicle systems.
Long-term duration suggests a sustained need and potential for stable support.
Specific technical focus indicates a targeted and necessary engineering requirement.

Sector Analysis

This contract falls within the broader defense engineering services sector, which is a critical component of the U.S. defense industrial base. The market for specialized vehicle engineering is dominated by a few large prime contractors. Spending in this area is driven by the need to maintain and modernize aging military fleets and develop new capabilities. Comparable spending benchmarks are difficult to establish due to the highly specialized nature of the services.

Small Business Impact

This contract does not appear to involve a small business set-aside. Given the nature of the work and the prime contractor, it is unlikely that significant subcontracting opportunities for small businesses will arise directly from this specific task order, though BAE Systems may have broader small business subcontracting goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight and auditing will be necessary to ensure costs are reasonable and allocable. Transparency is limited due to the sole-source nature of the award, and specific Inspector General jurisdiction would depend on the overall program and any identified irregularities.

Related Government Programs

Armored Vehicle Modernization Programs
Defense Engineering Services
Department of the Army Procurement

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.2 million to BAE SYSTEMS LAND AND ARMAMENTS L.P.. ARMORED MULTIPURPOSE VEHICLE STS CONTRACT, TASK ORDER ESTABLISHES RAMP SEAL TERM WORD DIRECTIVE FOV-R-21-F0378-011 FOR 1,620 HOURS IN THE AMOUNT OF $271,700.48.

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 $81.2 million.

What is the period of performance?

Start: 2021-09-10. End: 2027-03-31.

What is the historical spending pattern for similar armored vehicle engineering services by the Department of the Army?

Historical spending on armored vehicle engineering services by the Department of the Army is substantial, reflecting the ongoing need to maintain and upgrade a large and complex fleet. While specific data for 'ramp seal term word directive' services is not publicly itemized, broader categories like 'Engineering and Technical Services' for ground vehicles often run into millions or even billions of dollars annually. These expenditures are driven by factors such as vehicle age, technological advancements, operational tempo, and evolving threat landscapes. Analyzing past contracts for similar components or systems, even if not identical, would reveal trends in pricing, contract types (e.g., cost-plus vs. fixed-price), and contractor performance. However, the highly specialized nature of this particular task order means direct historical comparisons might be limited, potentially requiring analysis of broader engineering support contracts for ground combat systems.

How does the hourly rate for this contract compare to industry benchmarks for specialized engineering services?

Determining an exact hourly rate benchmark for this specific contract is challenging without more granular cost data and a precise definition of the 'ramp seal term word directive' service. However, specialized engineering services for complex defense systems, particularly those involving proprietary knowledge or unique technical expertise, typically command higher rates than general engineering. Rates for senior engineers in defense can range from $150 to over $300 per hour, depending on experience, security clearances, and the criticality of the work. Given the $271,700.48 award for 1,620 hours, the implied average hourly rate is approximately $167.72. This rate appears to be within the plausible range for specialized defense engineering, especially considering it's a cost-plus-fixed-fee structure where the fee is a component of the total price. A more definitive comparison would require access to proprietary cost data or government cost-estimating reports.

What are the potential risks associated with a sole-source award for this type of service?

Sole-source awards, like this one to BAE Systems, carry several potential risks. Primarily, the lack of competition can lead to higher prices than might be achieved in a competitive environment, as the government does not benefit from the price discovery mechanism of multiple bids. This can result in less value for taxpayer money. Additionally, sole-source awards can sometimes indicate a lack of available qualified sources or a situation where only one contractor possesses the necessary proprietary data or unique capabilities. This can lead to contractor 'lock-in,' making it difficult or costly to switch providers in the future. Furthermore, without competitive pressure, there might be less incentive for the contractor to innovate or optimize efficiency, although contract oversight can mitigate this. The government must ensure robust justification for sole-source awards to confirm they are truly necessary and in the public interest.

What is BAE Systems' track record with the Department of the Army for similar armored vehicle contracts?

BAE Systems Land and Armaments L.P. has a significant and extensive track record with the Department of the Army, particularly in the realm of armored vehicle development, production, and sustainment. They are a major prime contractor for numerous key platforms, including the M1 Abrams Main Battle Tank, the Bradley Fighting Vehicle, and the Paladin Self-Propelled Howitzer. Their history includes managing complex engineering changes, upgrades, and providing long-term support services. While specific performance metrics for every contract are not always public, BAE Systems is generally considered a capable and experienced provider within the defense industrial base. Their long-standing relationship with the Army suggests a familiarity with Army requirements and processes, which can be advantageous for executing specialized tasks like this engineering support order.

How does the duration and value of this task order fit within the broader context of armored vehicle sustainment spending?

This specific task order, valued at $271,700.48 over approximately 5.7 years (from September 2021 to March 2027), represents a relatively small component within the vast landscape of armored vehicle sustainment. The Department of the Army's overall budget for ground vehicle maintenance, upgrades, and sustainment runs into billions of dollars annually. This task order focuses on a very specific engineering service ('ramp seal term word directive') rather than broad platform overhaul or new production. Its long duration suggests a need for ongoing, specialized technical support rather than a one-time fix. In the context of total program spending, this task order is a minor but potentially critical element, ensuring the functionality of a specific part of the vehicle system. Its value is less about the dollar amount and more about the specialized expertise it procures.

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: Ball Corporation

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: $81,184,029

Exercised Options: $81,184,029

Current Obligation: $81,184,029

Actual Outlays: $262,339

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $2,236,947

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