DoD Awards BAE Systems $38.4M for Taiwan M88A2 Armored Vehicle Program
Contract Overview
Contract Amount: $38,419,997 ($38.4M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2022-07-12
End Date: 2026-09-30
Contract Duration: 1,541 days
Daily Burn Rate: $24.9K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TAIWAN M88A2 PROGRAM
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $38.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: TAIWAN M88A2 PROGRAM Key points: 1. Significant investment in armored vehicle modernization for Taiwan. 2. Sole-source award to BAE Systems raises questions about competition. 3. Potential for cost overruns given the firm fixed-price contract type. 4. Focus on military vehicle manufacturing highlights a key defense sector.
Value Assessment
Rating: fair
The contract value of $38.4 million for the M88A2 program is difficult to benchmark without comparable sole-source awards. The firm fixed-price structure aims to control costs, but the lack of competition may limit price discovery.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This approach may lead to higher prices than if the contract had been competed, as there is no market pressure to drive down costs.
Taxpayer Impact: Taxpayer funds are being used for this procurement. The absence of competition could mean a less efficient use of these funds compared to a competitive award.
Public Impact
Enhances Taiwan's military capabilities with advanced armored recovery vehicles. Supports the defense industrial base through a contract with BAE Systems. Represents a strategic commitment to an allied nation's security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing.
- Potential for cost escalation despite fixed-price contract.
- Lack of transparency in price justification.
Positive Signals
- Addresses critical military equipment needs.
- Supports a key defense contractor.
- Long-term contract duration provides stability.
Sector Analysis
This contract falls within the Defense sector, specifically military vehicle manufacturing. Spending in this area is driven by geopolitical needs and technological advancements in armored warfare. Benchmarks for similar sole-source armored vehicle contracts are not readily available.
Small Business Impact
The contract was awarded to BAE Systems Land & Armaments L.P., a large defense contractor. There is no indication of subcontracting opportunities for small businesses in the provided data.
Oversight & Accountability
The Department of the Army is the awarding agency. Oversight will be crucial to ensure the contractor meets delivery schedules and quality standards, especially given the sole-source nature of the award.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for price inflation
- Limited transparency on price justification
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, pa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. TAIWAN M88A2 PROGRAM
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 $38.4 million.
What is the period of performance?
Start: 2022-07-12. End: 2026-09-30.
What is the justification for the sole-source award, and how was the price determined to be fair and reasonable?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. Price reasonableness is usually determined through cost analysis, comparison to historical data, or market research. Without specific documentation, it's difficult to assess the fairness of the price in this instance.
What are the specific risks associated with this sole-source contract for the M88A2 program?
The primary risks include potential overpayment due to lack of competition, limited leverage for negotiating favorable terms, and the possibility of contractor complacency. There's also a risk that the government may not receive the best value. The firm fixed-price contract mitigates some cost overrun risks but doesn't address the initial price determination.
How effectively will this contract contribute to Taiwan's defense capabilities and overall U.S. foreign policy objectives?
The M88A2 is a critical asset for battlefield recovery and maintenance, directly enhancing Taiwan's operational readiness. By providing this equipment, the U.S. strengthens a key ally's defense posture, aligning with broader U.S. foreign policy goals in the Indo-Pacific region. The effectiveness hinges on timely delivery and the M88A2's successful integration into Taiwan's military.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV21R0060
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $38,419,997
Exercised Options: $38,419,997
Current Obligation: $38,419,997
Subaward Activity
Number of Subawards: 74
Total Subaward Amount: $16,751,012
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-07-12
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2025-11-20
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