DoD awards $16.4M for Common Missile Warning System support to BAE Systems, a sole-source contract

Contract Overview

Contract Amount: $16,370,897 ($16.4M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-29

End Date: 2027-09-30

Contract Duration: 731 days

Daily Burn Rate: $22.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROVIDE ALL PERSONNEL, EQUIPMENT, SUPPLIES, FACILITIES, TOOLS, MATERIALS, SUPERVISION, AND OTHER ITEM AND NON-PERSONAL SERVICES NECESSARY TO PERFORM THE CONTRACTOR SUPPORT OF THE COMMON MISSILE WARNING SYSTEM (CMWS)

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $16.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: PROVIDE ALL PERSONNEL, EQUIPMENT, SUPPLIES, FACILITIES, TOOLS, MATERIALS, SUPERVISION, AND OTHER ITEM AND NON-PERSONAL SERVICES NECESSARY TO PERFORM THE CONTRACTOR SUPPORT OF THE COMMON MISSILE WARNING SYSTEM (CMWS) Key points: 1. Contract awarded to a single vendor, raising questions about competitive pricing and value. 2. Limited competition may result in higher costs for taxpayers compared to an open market. 3. The contract duration of two years suggests a need for ongoing, specialized support. 4. Focus on system support indicates a mature technology requiring maintenance and upgrades. 5. The 'Cost Plus Fixed Fee' structure can incentivize cost overruns if not closely monitored. 6. Awarded by the Department of the Army, indicating a critical defense capability.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the 'Cost Plus Fixed Fee' pricing structure. Without competitive bids, it's difficult to ascertain if the $16.4 million represents a fair market price for the services provided. The fixed fee component offers some cost control, but the 'cost plus' element means the government bears the risk of increased direct costs. Comparison to similar sole-source contracts for specialized defense systems would be necessary for a more robust assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning BAE Systems was the only vendor considered. The absence of competition limits the government's ability to solicit the best possible pricing and terms from multiple offerors. While sole-source awards are sometimes justified for unique capabilities or urgent needs, the lack of a competitive process here means potential savings were likely forgone.

Taxpayer Impact: Taxpayers may have paid a premium for this system support due to the lack of competitive pressure to drive down costs.

Public Impact

The primary beneficiaries are the U.S. Army personnel who rely on the Common Missile Warning System for operational effectiveness. Services delivered include contractor support essential for the maintenance, operation, and potentially minor upgrades of the CMWS. The geographic impact is likely global, as the CMWS is deployed on various Army platforms worldwide. Workforce implications include the employment of specialized technical personnel by BAE Systems to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Cost-plus contract structure shifts cost risk to the government.
Lack of competition may reduce incentive for contractor efficiency.
Specific performance metrics and deliverables need close monitoring to ensure value.

Positive Signals

BAE Systems is an established defense contractor with experience in similar systems.
The contract duration provides stability for essential system support.
Fixed fee component provides some predictability in contractor profit.

Sector Analysis

The defense electronics sector is characterized by high R&D costs, long product cycles, and significant government procurement. Contracts for specialized systems like missile warning are often awarded to a limited number of prime contractors due to the complexity and security requirements. The market size for such specialized defense systems is substantial, driven by ongoing global security needs. This contract fits within the broader category of defense readiness and sustainment.

Small Business Impact

This contract does not appear to involve small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. The focus is on a prime contractor providing specialized support. The impact on the small business ecosystem is likely minimal unless BAE Systems engages small businesses for specific components or services not detailed in the award notice.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited by the sole-source nature of the award; however, contract details are often available through federal procurement databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Missile Warning Systems
Avionics Support Contracts
Defense Electronics Procurement
Department of the Army Sustainment Programs

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.4 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. PROVIDE ALL PERSONNEL, EQUIPMENT, SUPPLIES, FACILITIES, TOOLS, MATERIALS, SUPERVISION, AND OTHER ITEM AND NON-PERSONAL SERVICES NECESSARY TO PERFORM THE CONTRACTOR SUPPORT OF THE COMMON MISSILE WARNING SYSTEM (CMWS)

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 $16.4 million.

What is the period of performance?

Start: 2025-09-29. End: 2027-09-30.

What is the track record of BAE Systems in supporting similar missile warning systems?

BAE Systems has a significant track record in defense electronics and systems integration, including work on various sensor and warning systems. They are a major contractor for numerous U.S. military platforms. Their experience with the Common Missile Warning System (CMWS) specifically would be detailed in their past performance evaluations during any prior competitive solicitations. Given their established presence, it's likely they have provided support for CMWS or closely related systems for an extended period, contributing to their selection for this sole-source award. Further analysis would involve reviewing their performance history on similar contracts, including any past issues or commendations.

How does the 'Cost Plus Fixed Fee' (CPFF) structure compare to other contract types for system support?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is uncertainty about the costs involved, such as in research and development or complex system sustainment. Under CPFF, the contractor is reimbursed for all allowable costs plus a fixed fee representing their profit. This contrasts with fixed-price contracts, where the contractor agrees to a set price regardless of actual costs, and cost-reimbursement contracts without a fixed fee, where profit is a percentage of costs. While CPFF provides flexibility and ensures the contractor is compensated for necessary expenses, it shifts significant cost risk to the government. Effective oversight is crucial to control costs and ensure the fixed fee remains appropriate for the effort.

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

Sole-source awards for critical defense systems carry several potential risks. Primarily, the lack of competition can lead to inflated prices as the contractor faces no pressure to offer the most cost-effective solution. It can also reduce incentives for innovation and efficiency, as the contractor may be less motivated to find cost-saving measures or improve performance when their position is guaranteed. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain and make it difficult to transition to alternative solutions if needed. While sometimes necessary due to unique capabilities or urgent requirements, sole-source awards necessitate rigorous justification and stringent oversight to mitigate these risks.

What is the historical spending trend for Common Missile Warning System (CMWS) support?

Analyzing historical spending trends for CMWS support requires access to detailed contract databases over multiple fiscal years. Typically, spending on sustainment and support for major defense systems like CMWS tends to be relatively stable, fluctuating based on operational tempo, system upgrades, and the overall defense budget. However, sole-source awards can sometimes show less predictable cost increases compared to competitively procured services. Without specific historical data for this contract vehicle or similar ones, it's difficult to establish a precise trend. A comprehensive review would involve examining prior delivery orders or contracts for CMWS support issued by the Department of the Army or other services over the past 5-10 years.

How does the geographic location of the contractor (New Hampshire) impact contract performance or cost?

The geographic location of the contractor, BAE Systems Information and Electronic Systems Integration Inc. in New Hampshire, is unlikely to have a significant direct impact on the performance of the Common Missile Warning System (CMWS) support contract itself, as the system is deployed globally. However, it could influence indirect costs such as labor rates, which may be higher or lower depending on the regional cost of living and labor market. Proximity to government facilities or key operational hubs is generally not a primary factor for this type of specialized technical support. The primary consideration for performance is the contractor's ability to deploy personnel or provide remote support as needed, regardless of their home base.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Semiconductor and Related Device Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: 65 SPIT BROOK RD, NASHUA, NH, 03060

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: $16,370,897

Exercised Options: $16,370,897

Current Obligation: $16,370,897

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56KGY25D0014

IDV Type: IDC

Timeline