DoD awards $12.7M for Paladin vehicle technical support, a sole-source contract with BAE Systems
Contract Overview
Contract Amount: $12,716,687 ($12.7M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2024-03-18
End Date: 2027-01-17
Contract Duration: 1,035 days
Daily Burn Rate: $12.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SYSTEM TECHNICAL SUPPORT (STS) AND SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS) M109 FAMILY OF VEHICLES (FOV) PALADIN SERVICE CONTRACT.
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $12.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: SYSTEM TECHNICAL SUPPORT (STS) AND SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS) M109 FAMILY OF VEHICLES (FOV) PALADIN SERVICE CONTRACT. Key points: 1. The contract focuses on engineering services for the M109 Paladin family of vehicles. 2. BAE Systems is the sole awardee, indicating a lack of competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. This spending supports critical defense equipment sustainment.
Value Assessment
Rating: questionable
The contract value of $12.7 million for engineering services is significant. Without competitive bids, it's difficult to assess if this price is optimal compared to potential market rates for similar specialized support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning only one vendor, BAE Systems, was solicited. This limits price discovery and potentially leads to higher costs than if multiple vendors had bid.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure on pricing for these specialized engineering services.
Public Impact
Ensures continued operational readiness of the M109 Paladin artillery system. Supports a key component of the Army's armored fleet. Funding directly benefits a major defense contractor, BAE Systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Fixed Fee contract type carries inherent cost escalation risks.
- Lack of transparency in pricing due to non-competitive nature.
Positive Signals
- Ensures critical technical support for a vital defense system.
- Supports long-term sustainment of the M109 Paladin FOV.
Sector Analysis
This contract falls under Engineering Services (NAICS 541330) within the defense sector. Spending benchmarks for specialized vehicle sustainment can vary widely based on system complexity and required support levels.
Small Business Impact
The awardee, BAE Systems, is a large defense contractor. There is no indication that small businesses were involved in this specific sole-source contract, limiting their participation.
Oversight & Accountability
The 'NOT COMPETED' status suggests a potential lack of robust oversight in exploring competitive alternatives. Further review of the justification for sole-sourcing is warranted to ensure accountability.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Potential for inflated pricing due to lack of competition
- Limited transparency in cost justification
Tags
engineering-services, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.7 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. SYSTEM TECHNICAL SUPPORT (STS) AND SUSTAINMENT SYSTEM TECHNICAL SUPPORT (SSTS) M109 FAMILY OF VEHICLES (FOV) PALADIN SERVICE CONTRACT.
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 $12.7 million.
What is the period of performance?
Start: 2024-03-18. End: 2027-01-17.
What is the justification for awarding this contract on a sole-source basis, and were alternatives considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. Without access to the specific justification documentation, it's impossible to confirm if alternatives were thoroughly considered or if this was the most cost-effective approach for the government.
What are the potential cost risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this service?
A CPFF contract means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost can escalate if the contractor's actual costs exceed projections. This structure can incentivize cost control but also carries a risk of higher overall expenditure if not closely monitored by the agency.
How does the lack of competition impact the long-term sustainment costs for the M109 Paladin FOV?
A sole-source award removes competitive pressure, which typically drives down prices and encourages innovation. Over the long term, this can lead to higher sustainment costs for the M109 Paladin FOV as BAE Systems may not face market-driven incentives to offer more competitive pricing or more efficient support solutions.
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: 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: $12,716,687
Exercised Options: $12,716,687
Current Obligation: $12,716,687
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV24D0020
IDV Type: IDC
Timeline
Start Date: 2024-03-18
Current End Date: 2027-01-17
Potential End Date: 2027-01-17 12:01:00
Last Modified: 2026-01-07
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