DoD awards BAE Systems $917.6M for Bradley Fighting Vehicle production, with delivery through February 2027

Contract Overview

Contract Amount: $917,559,538 ($917.6M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2023-08-31

End Date: 2027-02-28

Contract Duration: 1,277 days

Daily Burn Rate: $718.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: THE BRADLEY A4 FOLLOW-ON PRODUCTION EFFORT WILL DELIVER M2A4 AND M7A4 VEHICLES FROM VARIOUS INDUCTED LEGACY SOURCE VARIANTS BASED ON THE TDP DEVELOPED UNDER CONTRACT W56HZV-12-C-0358 BRADLEY A4 ECP AND THE TOP-LEVEL VEHICLE DRAWINGS.

Place of Performance

Location: YORK, YORK County, PENNSYLVANIA, 17408

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $917.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: THE BRADLEY A4 FOLLOW-ON PRODUCTION EFFORT WILL DELIVER M2A4 AND M7A4 VEHICLES FROM VARIOUS INDUCTED LEGACY SOURCE VARIANTS BASED ON THE TDP DEVELOPED UNDER CONTRACT W56HZV-12-C-0358 BRADLEY A4 ECP AND THE TOP-LEVEL VEHICLE DRAWINGS. Key points: 1. Contract focuses on modernizing existing Bradley variants to the A4 configuration, leveraging prior development efforts. 2. Sole-source award indicates limited market availability or specialized capabilities required for this specific upgrade. 3. Fixed-price incentive contract structure aims to balance cost control with performance incentives for the contractor. 4. Long-term delivery schedule suggests a sustained need for these armored vehicles within the Army's fleet. 5. Potential for follow-on production and sustainment contracts exists, depending on program execution and future requirements. 6. The contract's value represents a significant investment in armored vehicle modernization.

Value Assessment

Rating: fair

The contract value of $917.6 million for the Bradley A4 follow-on production effort appears substantial. Benchmarking this against similar large-scale armored vehicle production contracts is challenging without more specific details on the scope of work and the exact number of vehicles. However, the fixed-price incentive structure suggests an attempt to manage costs while ensuring performance. The reliance on a previously developed TDP (Technical Data Package) should theoretically reduce development costs, but the final price will depend on production efficiencies and any incentive payouts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential suppliers. This typically occurs when a single contractor possesses unique capabilities, intellectual property, or has already performed the necessary development work. While this can expedite the acquisition process, it limits the opportunity for price competition and may result in higher costs compared to a fully competed procurement.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that could arise from a competitive bidding process. The government relies on negotiation and oversight to ensure a fair price.

Public Impact

The U.S. Army benefits directly through the acquisition of modernized Bradley A4 vehicles, enhancing its armored combat capabilities. The contract supports the production of M2A4 and M7A4 variants, crucial for ground combat operations. Production is likely concentrated in areas where BAE Systems has manufacturing facilities, potentially impacting the workforce in those regions. The delivery of these vehicles contributes to the overall readiness and modernization of the U.S. ground forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Fixed-price incentive contracts can lead to cost overruns if incentives are not carefully managed or if base costs are underestimated.
Reliance on legacy variants for upgrades may present integration challenges or limitations in achieving the latest technological advancements.

Positive Signals

Leverages existing Technical Data Package (TDP) from prior development, potentially streamlining production and reducing initial costs.
Fixed-price incentive structure provides a framework for cost control and performance alignment.
Long-term contract duration allows for production planning and workforce stability.

Sector Analysis

The defense industrial base for armored vehicles is a specialized sector characterized by high barriers to entry, significant R&D investment, and long production cycles. This contract falls within the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' industry. The market is dominated by a few large prime contractors capable of handling such complex systems. Spending in this sector is driven by military modernization priorities and geopolitical factors. Comparable spending benchmarks would involve other major armored vehicle procurement programs, which are often multi-billion dollar efforts over several years.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, as indicated by 'sb': false. While the prime contractor, BAE Systems, is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on BAE Systems' procurement practices and the availability of specialized components or services from smaller firms within the defense supply chain.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Army contracting and program management offices. The fixed-price incentive structure requires careful monitoring of performance metrics and cost accumulation to ensure the government receives the best value. Transparency is typically maintained through contract reporting mechanisms, though detailed cost breakdowns may be proprietary. The Inspector General's office may conduct audits or investigations if specific concerns regarding fraud, waste, or abuse arise.

Related Government Programs

Bradley Fighting Vehicle Systems
Armored Multi-Purpose Vehicle (AMPV) Program
Ground Combat Vehicle (GCV) Program (historical)
Stryker Family of Vehicles

Risk Flags

Sole-source award may limit cost efficiencies.
Potential for cost growth in fixed-price incentive contracts.
Dependency on legacy variants could introduce integration risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $917.6 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. THE BRADLEY A4 FOLLOW-ON PRODUCTION EFFORT WILL DELIVER M2A4 AND M7A4 VEHICLES FROM VARIOUS INDUCTED LEGACY SOURCE VARIANTS BASED ON THE TDP DEVELOPED UNDER CONTRACT W56HZV-12-C-0358 BRADLEY A4 ECP AND THE TOP-LEVEL VEHICLE DRAWINGS.

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 $917.6 million.

What is the period of performance?

Start: 2023-08-31. End: 2027-02-28.

What is the historical spending trend for Bradley Fighting Vehicle production and upgrades?

Historical spending on Bradley Fighting Vehicle production and upgrades has been substantial, reflecting its long service life and continuous modernization efforts. The U.S. Army has consistently invested in the Bradley platform since its introduction. Specific figures vary year by year, influenced by production rates, upgrade packages (like the A4 configuration), and sustainment activities. For instance, prior contracts for Bradley A4 development and initial production phases have also represented significant financial commitments. Analyzing multi-year spending data reveals a sustained investment in maintaining and enhancing the capabilities of this core armored personnel carrier, often totaling hundreds of millions of dollars annually across various contract actions. This consistent funding underscores the platform's strategic importance to the Army's combined arms maneuver capabilities.

How does the unit cost of the M2A4/M7A4 variant compare to previous Bradley models or similar vehicles?

Determining the precise unit cost for the M2A4/M7A4 variant is complex due to the nature of fixed-price incentive contracts and the inclusion of various production and upgrade elements within a single award. However, it is generally expected that modernized variants like the A4, incorporating advanced electronics, improved survivability, and enhanced situational awareness systems, would have a higher unit cost than earlier models. Comparisons to similar vehicles in other nations' inventories or other U.S. armored platforms (like the Stryker) would also show variations based on size, armament, protection levels, and technological sophistication. Without specific cost breakdowns per unit from the contract, a direct, definitive comparison is difficult. The 'br' value of 718527 in the provided data likely represents a baseline cost or target, but the final negotiated price per unit could differ based on incentive performance.

What are the key performance metrics and incentives in this fixed-price incentive contract?

In a Fixed-Price Incentive (FPI) contract, the final price is determined after performance is completed, based on the relationship between the final cost and the target cost. Key performance metrics typically revolve around delivery schedules, quality standards, and potentially specific technical performance requirements for the M2A4 and M7A4 vehicles. The incentives are designed to encourage the contractor, BAE Systems Land & Armaments L.P., to control costs and meet or exceed performance targets. For example, if the final cost is below the negotiated target cost, both the government and the contractor share in the savings (a positive incentive). Conversely, if the final cost exceeds the target cost, the contractor bears a larger portion of the overrun up to a ceiling price, while the government's liability is capped. Specific metrics and incentive/disincentive clauses would be detailed in the contract's special provisions.

What is BAE Systems' track record with Bradley Fighting Vehicle production and upgrades?

BAE Systems Land & Armaments L.P. has a long and established track record with the Bradley Fighting Vehicle platform. As the prime contractor responsible for its production and modernization for many years, the company possesses deep institutional knowledge and manufacturing expertise related to the vehicle. They have been involved in numerous previous upgrades and production runs, including the development of the Technical Data Package (TDP) for the A4 variant mentioned in this contract. Their performance history includes delivering thousands of Bradleys and executing complex upgrade programs. While specific performance details on past contracts (e.g., on-time delivery rates, cost variances) would require detailed analysis of individual contract histories, BAE Systems is recognized as the incumbent and primary authority on the Bradley Fighting Vehicle.

What are the potential risks associated with relying on legacy source variants for the A4 upgrade?

Relying on legacy source variants for the M2A4/M7A4 upgrade presents several potential risks. Firstly, the condition and configuration of the 'inducting legacy source variants' can vary significantly, potentially leading to unforeseen integration challenges, rework, or increased costs to bring them up to the required standard. Secondly, older components or systems within these legacy variants might be obsolete or nearing the end of their service life, requiring more extensive refurbishment or replacement than initially anticipated. Thirdly, the process of converting diverse legacy platforms into a standardized A4 configuration could introduce complexities in manufacturing and quality control. Finally, the availability and cost of spare parts for the original legacy components could become a long-term sustainment challenge if not adequately addressed during the upgrade process.

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

Pricing Type: FIXED PRICE INCENTIVE (L)

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: $917,559,538

Exercised Options: $917,559,538

Current Obligation: $917,559,538

Subaward Activity

Number of Subawards: 676

Total Subaward Amount: $450,041,675

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV22D0083

IDV Type: IDC

Timeline