DoD awards $11.8M Cost Plus Fixed Fee contract to BAE Systems for AN/ARC-231 radio system upgrade

Contract Overview

Contract Amount: $11,827,431 ($11.8M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2019-12-20

End Date: 2022-05-12

Contract Duration: 874 days

Daily Burn Rate: $13.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: A COST PLUS FIXED FEE TASK ORDER FOR SERVICES FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SYSTEM (MARS) REFERENCING THE PERFORMANCE WORK STATEMENT "AN/ARC-231 MOBILE USER OBJECTIVE SYSTEM / CRYPTO MODERNIZATION (MUOS/CM) PHASE 5 SATURN UPGRADE".

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $11.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: A COST PLUS FIXED FEE TASK ORDER FOR SERVICES FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SYSTEM (MARS) REFERENCING THE PERFORMANCE WORK STATEMENT "AN/ARC-231 MOBILE USER OBJECTIVE SYSTEM / CRYPTO MODERNIZATION (MUOS/CM) PHASE 5 SATURN UPGRADE". Key points: 1. Contract awarded to BAE Systems for a critical aviation radio system upgrade. 2. The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns. 3. No competition was utilized, raising concerns about price discovery and value. 4. The sector is focused on advanced communications equipment manufacturing.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee structure for this $11.8M contract offers limited incentive for the contractor to control costs. Without a competitive benchmark, it's difficult to assess if the pricing is reasonable compared to similar services or systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and may result in higher costs for the government compared to a competitively bid contract.

Taxpayer Impact: The absence of competition for this significant contract raises concerns about potential overspending of taxpayer funds.

Public Impact

Ensures continued operational capability for critical military aviation communication systems. Supports advanced radio technology modernization for the Department of Defense. Potential for increased costs due to sole-source, cost-plus contract structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of clear performance metrics in provided data

Positive Signals

Supports critical military aviation systems
Addresses technology modernization needs

Sector Analysis

This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. Spending in this sector is crucial for maintaining advanced defense communication capabilities, but cost-plus contracts can inflate benchmarks.

Small Business Impact

The awardee, BAE Systems Information and Electronic Systems Integration Inc., is a large business. There is no indication that small businesses were involved in this specific contract, nor is there information on subcontracting opportunities.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and the scope of work is strictly adhered to. Robust auditing of the cost-plus fixed fee elements is essential for accountability.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition may lead to inflated pricing.
Cost-plus contract type offers limited incentive for cost control.
Potential for scope creep without strict oversight.
Reliance on a single contractor for critical system upgrade.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.8 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. A COST PLUS FIXED FEE TASK ORDER FOR SERVICES FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SYSTEM (MARS) REFERENCING THE PERFORMANCE WORK STATEMENT "AN/ARC-231 MOBILE USER OBJECTIVE SYSTEM / CRYPTO MODERNIZATION (MUOS/CM) PHASE 5 SATURN UPGRADE".

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $11.8 million.

What is the period of performance?

Start: 2019-12-20. End: 2022-05-12.

What is the estimated cost savings or efficiency gain expected from this MUOS/CM Phase 5 Saturn Upgrade compared to previous phases or alternative solutions?

The provided data does not detail the specific cost savings or efficiency gains anticipated from this upgrade. A Cost Plus Fixed Fee contract, especially when sole-sourced, doesn't inherently guarantee cost efficiency. Further analysis of the performance work statement and contractor's cost proposals would be needed to assess projected benefits.

What are the primary risks associated with the AN/ARC-231 system's obsolescence or performance degradation that necessitated this specific upgrade?

The primary risks likely stem from the obsolescence of older cryptographic modernization components and the need to integrate with newer systems like MUOS. Failure to upgrade could lead to communication vulnerabilities, interoperability issues with modern forces, and potential degradation of system performance in critical operational environments.

How effectively does the chosen contract type (Cost Plus Fixed Fee) align with the government's objective to achieve the best value for this critical aviation radio system upgrade?

A Cost Plus Fixed Fee contract, particularly when sole-sourced, generally does not align well with achieving the best value. This structure incentivizes cost incurrence rather than cost control and lacks the competitive pressure that drives down prices. While it allows for flexibility in complex projects, it necessitates stringent oversight to mitigate the risk of inflated costs.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 5001 US HIGHWAY 30 W, FORT WAYNE, IN, 46818

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,827,431

Exercised Options: $11,827,431

Current Obligation: $11,827,431

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $260,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56JSR19D0014

IDV Type: IDC

Timeline