DoD awards $60.3M for BAE Systems' CATV GP and Cargo Variants, with 70062 as a key benchmark

Contract Overview

Contract Amount: $60,323,354 ($60.3M)

Contractor: BAE Systems Land and Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2022-08-22

End Date: 2024-12-30

Contract Duration: 861 days

Daily Burn Rate: $70.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FIRST DELIVERY ORDER FOR CATV GP AND CARGO VARIANTS AND INCIDENTAL SERVICES.

Place of Performance

Location: STERLING HEIGHTS, MACOMB County, MICHIGAN, 48312

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $60.3 million to BAE SYSTEMS LAND AND ARMAMENTS L.P. for work described as: FIRST DELIVERY ORDER FOR CATV GP AND CARGO VARIANTS AND INCIDENTAL SERVICES. Key points: 1. Value for money assessed against industry benchmarks and comparable contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are being monitored, with a focus on performance and delivery timelines. 4. Performance context is tied to the delivery of specialized military vehicle variants. 5. Sector positioning places this contract within the broader defense manufacturing landscape.

Value Assessment

Rating: good

The contract value of $60.3 million for specialized vehicle variants appears reasonable when considering the nature of defense procurement. Benchmarking against similar, complex military vehicle production contracts suggests that pricing is within expected ranges. The firm-fixed-price structure provides cost certainty, although the specific per-unit cost needs further analysis against detailed specifications and market rates for comparable systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not detailed, but this procurement method generally fosters a competitive environment, which can lead to more favorable pricing for the government. The open nature of the competition is a positive indicator for price discovery.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it maximizes the potential for competitive bids, driving down costs and ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the U.S. Army, receiving critical logistical and transport capabilities. The services delivered include the production and delivery of CATV GP and Cargo variants, essential for military operations. The geographic impact is primarily within the United States, where the manufacturing and delivery will occur, potentially supporting domestic industrial capacity. Workforce implications include employment opportunities within BAE Systems and its supply chain, particularly in specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule slippage given the delivery order nature and extended performance period.
Ensuring the technical specifications meet evolving battlefield requirements.
Managing supply chain risks for specialized components.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Awarded under full and open competition, suggesting a competitive market.
BAE Systems is an established defense contractor with relevant experience.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on transportation equipment. The market for military vehicles is characterized by long production cycles, high technological requirements, and significant government investment. Comparable spending benchmarks in this sub-sector often involve multi-year procurements for armored personnel carriers, logistics vehicles, and other specialized platforms, with values frequently in the tens to hundreds of millions of dollars.

Small Business Impact

While this contract was awarded to a large prime contractor, BAE Systems, there is an opportunity for small businesses to participate through subcontracting. The extent of small business participation will depend on BAE Systems' subcontracting plan and the availability of qualified small business suppliers for specific components or services. Further analysis would be needed to determine if small business set-asides were utilized or if subcontracting goals were met.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods and services. Transparency is facilitated through contract award databases, though detailed performance metrics and specific oversight activities are typically internal to the agency.

Related Government Programs

Armored Vehicle Procurement
Tactical Wheeled Vehicle Programs
Logistics and Support Vehicle Contracts
Department of Defense Vehicle Manufacturing

Risk Flags

Potential for schedule delays
Supply chain vulnerability
Technical performance risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.3 million to BAE SYSTEMS LAND AND ARMAMENTS L.P.. FIRST DELIVERY ORDER FOR CATV GP AND CARGO VARIANTS AND INCIDENTAL SERVICES.

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 $60.3 million.

What is the period of performance?

Start: 2022-08-22. End: 2024-12-30.

What is the historical spending pattern for CATV GP and Cargo variants with BAE Systems?

Analyzing historical spending for CATV GP and Cargo variants with BAE Systems requires access to detailed contract databases beyond this single delivery order. Typically, such variants are part of larger, multi-year programs. Historical data would reveal if this $60.3 million award represents a new program initiation, a follow-on order for an existing platform, or a surge in demand. Examining previous awards for similar vehicle types from BAE Systems or other manufacturers would provide context on the typical scale and frequency of such procurements, helping to assess if current spending aligns with historical trends or indicates a significant shift in acquisition strategy or operational needs.

How does the awarded amount compare to the total contract value or ceiling?

The provided data indicates an award amount of $60,323,354.46 for a delivery order. Without information on the base contract or any associated ceiling amounts, it's difficult to definitively compare this award to the total potential value. Delivery orders are typically issued against a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a basic ordering agreement. If this is a single delivery order against a larger contract, its value represents only a portion of the overall program's potential expenditure. A comprehensive assessment would require identifying the parent contract to understand the total funding allocated and the remaining capacity for future orders.

What are the specific performance risks associated with these vehicle variants?

Performance risks associated with military vehicle variants like the CATV GP and Cargo can be multifaceted. Key risks include potential delays in manufacturing due to supply chain disruptions for specialized components, integration challenges with new technologies or subsystems, and ensuring the vehicles meet stringent operational and environmental requirements in diverse theaters of operation. Furthermore, the reliability and maintainability of the vehicles in field conditions are critical performance aspects. The firm-fixed-price nature of the contract places the cost risk on the contractor, but performance failures could still lead to schedule delays and operational readiness impacts for the military.

What is the track record of BAE Systems Land and Armaments L.P. in delivering similar military vehicle contracts?

BAE Systems Land and Armaments L.P. has a substantial track record in delivering a wide range of military vehicles, including armored personnel carriers, combat vehicles, and logistics platforms, to the U.S. Department of Defense and international allies. They are known for producing complex systems that often involve advanced armor, mobility, and weapon systems. Their experience encompasses various contract types and production scales. While specific performance metrics for past contracts are not detailed here, their continued success in securing large defense contracts suggests a generally positive performance history, though like any major contractor, they may have faced challenges on specific programs related to cost, schedule, or technical issues.

What does the '70062' benchmark signify in the context of this contract?

The '70062' likely refers to a North American Industry Classification System (NAICS) code, specifically 'All Other Transportation Equipment Manufacturing'. This code is used for statistical purposes to classify businesses involved in manufacturing transportation equipment not covered by other specific NAICS codes. In the context of this contract, it signifies that the CATV GP and Cargo variants fall under this broad manufacturing category. While it provides a classification, it doesn't offer a direct cost or performance benchmark on its own. Benchmarking would typically involve comparing the contract's value, per-unit costs, or performance metrics against other contracts classified under similar or related NAICS codes within the defense transportation sector.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › All Other Transportation Equipment Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

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: $314,033,339

Exercised Options: $314,033,339

Current Obligation: $60,323,354

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $30,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV22D0082

IDV Type: IDC

Timeline