DoD awards $33M for CMWS hardware sustainment to BAE Systems, raising competition concerns
Contract Overview
Contract Amount: $33,085,131 ($33.1M)
Contractor: BAE Systems Information and Electronic Systems Integration Inc.
Awarding Agency: Department of Defense
Start Date: 2013-05-16
End Date: 2018-12-31
Contract Duration: 2,055 days
Daily Burn Rate: $16.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PERFORMANCE BASED LOGISTICS (PBL) SUPPORT SERVICES NECESSARY TO SUSTAIN THE COMMON MISSILE WARNING SYSTEM (CMWS) HARDWARE.
Place of Performance
Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060
Plain-Language Summary
Department of Defense obligated $33.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: PERFORMANCE BASED LOGISTICS (PBL) SUPPORT SERVICES NECESSARY TO SUSTAIN THE COMMON MISSILE WARNING SYSTEM (CMWS) HARDWARE. Key points: 1. Contract awarded to BAE Systems for critical missile warning system support. 2. Lack of competition for sustainment services is a key concern. 3. Potential for higher costs due to sole-source nature. 4. Sector: Defense, specifically electronic component manufacturing.
Value Assessment
Rating: fair
The contract value of $33M over approximately 5.5 years for sustainment services appears reasonable given the specialized nature of the CMWS hardware. However, without competitive bidding, it's difficult to benchmark against market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government compared to a competitive environment.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these sustainment services.
Public Impact
Ensures continued operational readiness of the Common Missile Warning System. Supports critical defense infrastructure for aircraft survivability. Potential for extended reliance on a single vendor for sustainment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for cost overruns
Positive Signals
- Ensures critical system sustainment
- Supports national defense
Sector Analysis
This contract falls within the Defense sector, specifically supporting electronic component manufacturing for a critical military system. Spending benchmarks for sustainment services can vary widely based on system complexity and criticality.
Small Business Impact
The data indicates that small business participation was not a factor in this contract award, as it was awarded directly to a large prime contractor.
Oversight & Accountability
Oversight is likely managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. However, the lack of competition limits the agency's leverage in price negotiations.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competitive pricing
- Potential for cost creep
- Dependency on a single vendor
Tags
other-electronic-component-manufacturing, department-of-defense, nh, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. PERFORMANCE BASED LOGISTICS (PBL) SUPPORT SERVICES NECESSARY TO SUSTAIN THE COMMON MISSILE WARNING SYSTEM (CMWS) HARDWARE.
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $33.1 million.
What is the period of performance?
Start: 2013-05-16. End: 2018-12-31.
What is the justification for the sole-source award of the CMWS sustainment services?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems. For the CMWS, BAE Systems likely possesses specialized knowledge and access to proprietary data essential for maintaining the hardware, making competition impractical or detrimental to operational readiness.
What are the long-term risks associated with a sole-source sustainment contract for critical defense systems?
Long-term sole-source contracts pose risks of vendor lock-in, escalating costs without competitive pressure, and potential degradation of service quality if the vendor faces financial or operational challenges. The government may also lose opportunities to leverage technological advancements from other potential providers, impacting the system's future modernization.
How can the DoD mitigate the cost impact of this sole-source contract over its duration?
Mitigation strategies include rigorous performance monitoring, negotiating favorable terms and incentives within the existing contract, and actively seeking opportunities for future competition, perhaps through modularizing sustainment tasks or developing alternative solutions. Regular market research and engagement with industry can also inform future procurement strategies.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ12R0024
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Compagnie DE Developpement DE L'eau S.A.
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: $34,266,064
Exercised Options: $34,266,064
Current Obligation: $33,085,131
Actual Outlays: $-1,187
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-05-16
Current End Date: 2018-12-31
Potential End Date: 2018-12-31 00:00:00
Last Modified: 2024-01-30
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