DoD awards $15.7M for M109 Paladin vehicle technical support, a sole-source contract to BAE Systems
Contract Overview
Contract Amount: $15,689,429 ($15.7M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2024-03-27
End Date: 2026-09-30
Contract Duration: 917 days
Daily Burn Rate: $17.1K/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 $15.7 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 technical support and sustainment for the M109 Paladin family of vehicles. 2. BAE Systems Land & Armaments L.P. is the sole awardee, indicating a lack of competition. 3. The contract is valued at $15.7 million and runs for over two years. 4. The award method is 'NOT COMPETED', raising questions about price discovery and potential value. 5. The primary sector is Engineering Services, supporting critical defense equipment.
Value Assessment
Rating: questionable
The contract is sole-source, making direct pricing comparisons difficult. Without competition, it's hard to assess if the Cost Plus Fixed Fee structure yielded optimal pricing for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning BAE Systems was the only vendor considered. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition for this significant contract may result in taxpayers paying more than necessary for essential technical support services.
Public Impact
Taxpayers may be overpaying due to the sole-source nature of the award. The M109 Paladin is a key component of Army ground vehicle fleets, making its sustainment critical. Dependence on a single provider for critical system support can create long-term risks. The contract duration extends into late 2026, requiring ongoing scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
Positive Signals
- Supports critical defense equipment
- Clear contract duration
Sector Analysis
This contract falls under Engineering Services, specifically supporting tracked combat vehicles. Defense engineering services often involve specialized knowledge and long-term sustainment, with costs varying based on system complexity and competition.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded directly to a large prime contractor on a sole-source basis.
Oversight & Accountability
Given the sole-source nature and cost-plus contract type, robust oversight is crucial to ensure costs are reasonable and performance meets requirements. The Department of the Army's contracting activity warrants close monitoring.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for cost overruns
- Vendor lock-in risk
- Limited transparency in pricing
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 $15.7 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 $15.7 million.
What is the period of performance?
Start: 2024-03-27. End: 2026-09-30.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. The government should have conducted a price analysis, potentially using historical data or independent cost estimates, to validate the reasonableness of the Cost Plus Fixed Fee terms and ensure taxpayer funds are used efficiently despite the lack of competition.
What are the potential risks associated with relying on a single vendor for the sustainment of the M109 Paladin FOV?
Sole-source reliance creates risks such as vendor lock-in, potential price escalations over time, and reduced flexibility for the government. If BAE Systems faces operational issues or decides to discontinue support, the Army could face significant disruptions in maintaining its M109 fleet, potentially impacting readiness and requiring costly transitions to alternative solutions.
How does the Cost Plus Fixed Fee (CPFF) contract structure impact the government's ability to control costs for this technical support service?
A CPFF contract allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost can fluctuate based on actual expenses. This structure incentivizes the contractor to control costs to maximize their profit margin, but it requires diligent government oversight to ensure costs are reasonable and allocable to the contract.
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: $15,689,429
Exercised Options: $15,689,429
Current Obligation: $15,689,429
Actual Outlays: $293,737
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $108,456
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: 2024-03-27
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2025-12-08
More Contracts from BAE Systems Land & Armaments L.P.
- Letter Contract for Early Procurement Material to Support the M109a7/M992a3 Vehicle Production — $2.9B (Department of Defense)
- Early Order Material in Support of the Future Purchase of 197 Ampvs and Facility Capacity Expansion Efforts to Increase the Ampv Production Rate to 197 Vehicles PER Year. Supports Ukraine Efforts — $2.5B (Department of Defense)
- 200612!007793!2100!w56hzv!tacom - Warren !w56hzv05g0005 !A!N! !N!0009 ! !20060726!20081231!834476079!824825459!217304393!n!bae Systems Land & Armaments I!1100 Bairs RD !york !pa!17404!87048!133!42!york !york !penn !+000192628556!n!n!000000000000!2350!combat Assault & Tactical VEH, Tracked !a4a!combat Vehicles !000 !NOT Discernable !336992!E! !4! ! ! ! ! !99990909!B! ! !A! !d!n!j!1!001!n!1g!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!y! ! ! ! ! ! !0001! ! — $1.6B (Department of Defense)
- 200112!001338!2100!AE07 !tacom - Warren !daae0701cm016 !A!N!*!N! !20010502!20041231!834476079!824825459!175406842!n!united Defense, L P !1100 Bairs Road !york !pa!17405!87048!133!42!york !york !penn !+000228044944!n!y!000681605313!2350!combat Assault & Tactical VEH, Tracked !a4a!combat Vehicles !1000!NOT Discernable or Classified !336992!*!*!3! ! ! !*!*!*!B!*!*!A! !D !n!j!1!001!n!1g!a!y!f! ! !N!C!N! ! ! !a!a!a!a!000!a!b!n! ! ! ! ! ! !0001! — $1.3B (Department of Defense)
- System Technical Support for Bradley Family of Vehicles, M113, M109, M992 Family of Vehicles, M9 ACE, Mlrs — $1.3B (Department of Defense)
View all BAE Systems Land & Armaments L.P. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)