DoD awards $8.5M for RT-1987 hardware and warranty, with limited competition

Contract Overview

Contract Amount: $8,497,207 ($8.5M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2022-12-14

End Date: 2026-03-25

Contract Duration: 1,197 days

Daily Burn Rate: $7.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF DELIVERY ORDER W56JSR-23-F-0011, CONTRACT W56JSR-19-D-0014 IS FOR THE PROCUREMENT OF QUANTITY (QTY) 110 (EA) FOR RT-1987 HARDWARE AND RT-1987 SEPARATE WARRANTY PER MFR FOR CLIN RELIEF AND CONSIDERATION DATED 15-NOV-2022.

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $8.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: THE PURPOSE OF DELIVERY ORDER W56JSR-23-F-0011, CONTRACT W56JSR-19-D-0014 IS FOR THE PROCUREMENT OF QUANTITY (QTY) 110 (EA) FOR RT-1987 HARDWARE AND RT-1987 SEPARATE WARRANTY PER MFR FOR CLIN RELIEF AND CONSIDERATION DATED 15-NOV-2022. Key points: 1. The contract focuses on specialized hardware and warranty services, indicating a need for specific technical capabilities. 2. The award was not competed, raising questions about potential cost savings and market responsiveness. 3. The duration of the contract (nearly 4 years) suggests a long-term requirement for these systems. 4. The firm-fixed-price structure aims to transfer risk to the contractor, but may limit flexibility. 5. The procurement falls under the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' NAICS code. 6. The contract is managed by the Department of the Army, highlighting its role in military communications infrastructure.

Value Assessment

Rating: fair

The total award amount of $8.5 million for 110 units of RT-1987 hardware and associated warranty appears to be a significant investment. Without comparable contract data or detailed cost breakdowns, it's challenging to definitively benchmark the value for money. The firm-fixed-price contract type suggests an attempt to control costs, but the lack of competition could mean taxpayers are not receiving the most competitive pricing available in the market.

Cost Per Unit: Approximately $77,248 per unit (hardware + warranty). This figure needs to be compared against market rates for similar specialized communication hardware and warranty services, which are not readily available in the provided data.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach is typically used when a specific product or service is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. It also limits opportunities for other qualified businesses to secure government contracts.

Public Impact

The primary beneficiaries are likely military personnel who will utilize the RT-1987 hardware for critical communication and relief efforts. The contract delivers specialized hardware essential for maintaining and enhancing communication capabilities within the Department of Defense. The geographic impact is primarily within the operational areas of the Department of the Army, potentially worldwide. The contract supports the workforce involved in the manufacturing, integration, and maintenance of advanced communication systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated pricing.
Sole-source awards can limit access to potentially more innovative or cost-effective solutions from other vendors.
The firm-fixed-price nature might not accommodate unforeseen technical challenges without potential change orders.

Positive Signals

The firm-fixed-price contract structure provides cost certainty for the government.
The extended contract duration (nearly 4 years) ensures sustained availability of critical hardware and support.
The award is managed by a specific agency (Department of the Army), indicating clear oversight responsibility.

Sector Analysis

This contract falls within the broader sector of defense electronics and communication equipment manufacturing. The market for such specialized hardware is often characterized by high barriers to entry due to research and development costs, stringent performance requirements, and established relationships with government agencies. While the NAICS code points to radio and wireless communications, the specific 'RT-1987' designation suggests a proprietary or highly specialized system, potentially limiting the number of capable suppliers and influencing the competitive landscape.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Given the sole-source nature of the award and the specialized technical requirements, it is unlikely that small businesses were directly involved as prime contractors. However, the prime contractor, BAE Systems, may engage small businesses for subcontracting opportunities, though this is not specified in the award details.

Oversight & Accountability

Oversight for this contract is managed by the Department of the Army. As a sole-source award, the justification for this procurement method would be subject to review. The firm-fixed-price contract type provides a degree of accountability by fixing the total price. Transparency regarding the justification for the sole-source award and the specific technical requirements of the RT-1987 hardware would be key areas for public scrutiny.

Related Government Programs

Department of Defense Communications Systems
Military Hardware Procurement
Radio and Wireless Equipment Manufacturing
Defense Electronics Contracts
Army Signal Corps Equipment

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Vendor Options

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.5 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. THE PURPOSE OF DELIVERY ORDER W56JSR-23-F-0011, CONTRACT W56JSR-19-D-0014 IS FOR THE PROCUREMENT OF QUANTITY (QTY) 110 (EA) FOR RT-1987 HARDWARE AND RT-1987 SEPARATE WARRANTY PER MFR FOR CLIN RELIEF AND CONSIDERATION DATED 15-NOV-2022.

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 $8.5 million.

What is the period of performance?

Start: 2022-12-14. End: 2026-03-25.

What is the specific function and technical capability of the RT-1987 hardware?

The RT-1987 hardware is identified under the NAICS code 334220 (Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing). While the exact specifications are not detailed in the provided data, its procurement by the Department of the Army suggests it is a critical component for military communication systems. This could range from tactical radios, secure communication devices, or specialized signal processing equipment. The associated warranty further implies a need for ongoing support and maintenance of potentially complex electronic systems, crucial for ensuring operational readiness and reliability in defense applications.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically stems from situations where only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, compatibility requirements with existing systems, or urgent and compelling needs where competition is not feasible. For the RT-1987 hardware, it's possible that BAE Systems is the sole manufacturer or possesses exclusive rights to produce or service this specific equipment. Without a formal Justification and Approval (J&A) document, the precise reason remains speculative, but it is a critical factor in assessing the necessity and fairness of the procurement process.

How does the $8.5 million cost compare to similar procurements or market benchmarks for specialized communication hardware?

Benchmarking the $8.5 million cost for 110 units of RT-1987 hardware and warranty is challenging without more specific technical details and market data. The per-unit cost of approximately $77,248 is substantial, reflecting the likely specialized nature of the equipment. In the defense sector, costs for advanced communication systems can vary widely based on features, security protocols, ruggedization, and intended operational environment. A lack of competition further complicates direct price comparisons. To assess value, one would need to compare this against similar systems procured competitively by other agencies or allies, or against internal cost estimates for developing such capabilities.

What are the potential risks associated with a sole-source award for critical defense hardware?

Sole-source awards for critical defense hardware carry several risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive bidding process, potentially resulting in inefficient use of taxpayer funds. Secondly, it limits the government's access to a broader range of technological solutions and innovations that might be offered by other qualified vendors. Thirdly, it can create vendor lock-in, making the government dependent on a single supplier for essential equipment and support, which can be problematic if that supplier faces financial difficulties or changes its business strategy. Finally, it raises concerns about transparency and fairness in the procurement process.

What is the track record of BAE Systems Information and Electronic Systems Integration Inc. in delivering similar defense communication systems?

BAE Systems is a major global defense contractor with a significant track record in developing and supplying a wide array of electronic systems, including communication, radar, and avionics for military applications. Their experience spans numerous platforms and programs across various branches of the U.S. military and allied nations. While specific details on their performance for the RT-1987 system are not provided, their general standing as a large, established defense prime contractor suggests they possess the technical expertise and manufacturing capacity. However, as with any large contractor, past performance on specific contracts can vary, and a thorough review would typically involve examining past performance evaluations and contract histories.

What is the expected impact of this contract on the operational readiness of the Department of the Army?

The procurement of RT-1987 hardware and its associated warranty is intended to enhance or maintain the operational readiness of the Department of the Army. This suggests the hardware plays a vital role in the communication infrastructure necessary for mission execution. By ensuring the availability of this equipment and providing for its upkeep over a nearly four-year period, the contract aims to reduce the risk of communication failures, improve the quality and security of information flow, and ultimately support the Army's ability to conduct its operations effectively in various environments.

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: FIRM FIXED PRICE (J)

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: $8,497,207

Exercised Options: $8,497,207

Current Obligation: $8,497,207

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