DoD awards $107.6M contract for M88A2 UCA vehicles to BAE Systems, a sole-source procurement
Contract Overview
Contract Amount: $107,617,952 ($107.6M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2023-09-01
End Date: 2027-01-31
Contract Duration: 1,248 days
Daily Burn Rate: $86.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: M88A2 - UCA CONTRACT AWARD
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $107.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: M88A2 - UCA CONTRACT AWARD Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. The contract value of $107.6 million for M88A2 UCA vehicles requires careful scrutiny. 3. BAE Systems, the sole awardee, is a significant player in defense manufacturing. 4. The firm-fixed-price contract type aims to control costs, but competition is key. 5. This award falls under the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' NAICS code. 6. The contract duration of 1248 days suggests a substantial production or sustainment effort.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source $107.6 million contract is challenging without competitive bids. The firm-fixed-price structure is standard for managing costs in defense procurement. However, the absence of competition means there's no direct comparison to assess if BAE Systems' pricing is optimal or if taxpayers received the best possible value. Further analysis would require understanding the specific components and labor involved in the M88A2 UCA production.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, BAE Systems Land & Armaments L.P., was solicited. This procurement approach bypasses the typical competitive bidding process. While sole-source awards can be justified for specialized capabilities or urgent needs, they limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract with multiple offers.
Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective pricing achievable through a bidding process. This could result in a higher overall expenditure for these M88A2 UCA vehicles.
Public Impact
The primary beneficiaries are the U.S. Army, receiving critical armored vehicle support. This contract ensures the continued availability and sustainment of M88A2 UCA vehicles, vital for combat recovery operations. The contract is expected to support jobs within BAE Systems' defense manufacturing facilities, primarily in Pennsylvania. The geographic impact is concentrated where BAE Systems conducts its manufacturing and assembly operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings for taxpayers.
- Lack of transparency in the bidding process makes it difficult to assess fair pricing.
- Reliance on a single contractor for critical armored vehicle components could pose supply chain risks.
Positive Signals
- Firm-fixed-price contract type provides cost certainty for the government.
- BAE Systems is an established defense contractor with experience in armored vehicle production.
- The contract supports the sustainment of essential military equipment for the U.S. Army.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on armored vehicle production. The market for such specialized military equipment is typically dominated by a few large, established defense contractors. The size of this award, over $100 million, is significant within this niche. Comparable spending benchmarks would involve other large-scale awards for military vehicle manufacturing or sustainment programs.
Small Business Impact
This contract does not appear to include specific small business set-aside provisions, as indicated by 'sb': false. The award to BAE Systems, a large prime contractor, suggests that any subcontracting opportunities for small businesses would be determined by BAE Systems' internal procurement strategies. The impact on the small business ecosystem is indirect and dependent on BAE's subcontracting plans.
Oversight & Accountability
Oversight for this contract will primarily reside with the Department of the Army contracting officers and program managers. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency regarding the sole-source justification and any subsequent modifications will be key to assessing accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- M88A2 Hercules Recovery Vehicle Program
- Department of Defense Armored Vehicle Procurement
- BAE Systems Defense Contracts
- Military Vehicle Manufacturing and Sustainment
Risk Flags
- Sole-source procurement
- Lack of competitive bidding
- Potential for cost overruns without competition
Tags
defense, department-of-defense, department-of-the-army, armored-vehicle, recovery-vehicle, sole-source, definitive-contract, firm-fixed-price, large-contract, pennsylvania, bae-systems, military-armored-vehicle-tank-and-tank-component-manufacturing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $107.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. M88A2 - UCA CONTRACT AWARD
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 $107.6 million.
What is the period of performance?
Start: 2023-09-01. End: 2027-01-31.
What is the specific justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED' and is 'sole-source'. While the specific justification is not detailed in the provided data, common reasons for sole-source awards in defense procurement include the unique capabilities of a single contractor, urgent and compelling requirements where competition is not feasible, or if only one source is capable of meeting the government's needs. For the M88A2 UCA, this could relate to proprietary technology, specialized manufacturing processes, or the need for seamless integration with existing platforms where BAE Systems is the sole provider. A full justification would typically be documented by the agency.
How does the $107.6 million contract value compare to historical spending on M88A2 vehicles?
Without access to historical spending data specifically for the M88A2 UCA program, a direct comparison is difficult. However, $107.6 million for a definitive contract with a duration of 1248 days (approximately 3.4 years) suggests a significant investment. This value likely covers the production of a substantial number of vehicles or major sustainment services. To provide a robust comparison, one would need to analyze prior contract awards for M88A2 vehicles, considering factors like quantity, scope of work (e.g., new production vs. upgrades vs. sustainment), and inflation over time.
What are the key risks associated with a sole-source award for military armored vehicles?
The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible value for its investment. Other risks include a reduced incentive for the sole contractor to innovate or improve efficiency, and potential supply chain vulnerabilities if the contractor faces production issues. Furthermore, it limits the government's options if the contractor's performance is unsatisfactory. This necessitates strong contract management and oversight to mitigate these risks.
What is BAE Systems' track record with similar defense contracts?
BAE Systems Land & Armaments L.P. is a major defense contractor with extensive experience in producing and sustaining armored vehicles for the U.S. military and international allies. They are known for programs such as the Bradley Fighting Vehicle, M109 Paladin, and various other tracked and wheeled armored platforms. Their track record generally includes successful delivery of complex systems, though like any large contractor, they may have faced challenges related to cost overruns or schedule delays on specific programs. Their long-standing relationship with the Department of Defense suggests a capability to meet demanding military specifications.
What are the implications of the 'PA' (Pennsylvania) state code for this contract?
The 'PA' state code likely indicates that the primary performance location or a significant portion of the contract's work will be carried out in Pennsylvania. This suggests that BAE Systems' manufacturing facilities in Pennsylvania will be involved in the production or sustainment of the M88A2 UCA vehicles. This has implications for regional economic impact, job creation, and potentially the utilization of specific state-based supply chains. It also means that oversight and engagement with the contractor may involve state-level economic development agencies or workforce initiatives.
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 COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV23R0110
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, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations
Financial Breakdown
Contract Ceiling: $107,617,952
Exercised Options: $107,617,952
Current Obligation: $107,617,952
Subaward Activity
Number of Subawards: 173
Total Subaward Amount: $54,833,161
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-09-01
Current End Date: 2027-01-31
Potential End Date: 2027-01-31 12:01:00
Last Modified: 2025-12-22
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