DoD Awards BAE Systems $81M for German Missile Warning System Production Hardware

Contract Overview

Contract Amount: $81,022,218 ($81.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-05

End Date: 2027-12-29

Contract Duration: 1,210 days

Daily Burn Rate: $67.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMON MISSILE WARNING SYSTEM PRODUCTION HARDWARE - GERMANY FOREIGN MILITARY SALES DELIVERY ORDER

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $81.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: COMMON MISSILE WARNING SYSTEM PRODUCTION HARDWARE - GERMANY FOREIGN MILITARY SALES DELIVERY ORDER Key points: 1. Significant contract value for critical defense hardware. 2. Sole-source award raises questions about competition and price. 3. Long-term delivery schedule (2027) indicates ongoing program needs. 4. Foreign Military Sales (FMS) context suggests international demand.

Value Assessment

Rating: questionable

The contract value of $81M for production hardware is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar systems or potential alternatives.

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 taxpayers as there is no market pressure to offer the best price.

Taxpayer Impact: The lack of competition in this sole-source award may result in a higher cost to the U.S. taxpayer, especially if the system could have been procured more affordably through a competitive process.

Public Impact

Enhances early warning capabilities for allied nations. Supports U.S. foreign policy objectives through military sales. Contributes to the defense industrial base. Potential for follow-on contracts and sustainment services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of price competition
Long-term delivery schedule

Positive Signals

Critical defense capability
Foreign military sales support
Established contractor

Sector Analysis

This contract falls under Other Electronic Component Manufacturing, a sector vital for defense systems. Spending in this area is often high due to the specialized nature and critical function of the components, with benchmarks varying widely based on system complexity and quantity.

Small Business Impact

The awardee, BAE Systems, is a large defense contractor. There is no indication in the provided data that small businesses were involved in this specific delivery order, suggesting limited direct impact on the small business sector for this procurement.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price is justifiable and that future procurements are competed where feasible to maximize value for taxpayers.

Related Government Programs

Other Electronic Component Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competitive bidding
Potential for overpricing
Limited transparency in price justification
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. COMMON MISSILE WARNING SYSTEM PRODUCTION HARDWARE - GERMANY FOREIGN MILITARY SALES DELIVERY ORDER

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 $81.0 million.

What is the period of performance?

Start: 2024-09-05. End: 2027-12-29.

What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of viable alternatives. Agencies are expected to conduct market research to confirm these conditions. For fair pricing, agencies may use historical data, independent cost estimates, or engage in detailed price negotiations. Oversight is crucial to verify these processes.

What are the specific risks associated with a sole-source procurement for critical defense hardware like this missile warning system?

Sole-source procurements carry risks of inflated prices due to lack of competition, potential for contractor complacency, and reduced innovation. For critical defense hardware, there's also a risk of supply chain vulnerabilities if the sole provider faces disruptions. Ensuring robust oversight and negotiation is paramount to mitigate these risks.

How does this contract contribute to the overall effectiveness and readiness of allied defense forces?

This contract directly contributes to the effectiveness of allied forces by providing essential production hardware for a missile warning system. Such systems are crucial for early detection and response to threats, thereby enhancing overall situational awareness and defensive capabilities, ultimately bolstering regional security and readiness.

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

Pricing Type: FIRM FIXED PRICE (J)

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: $81,022,218

Exercised Options: $81,022,218

Current Obligation: $81,022,218

Subaward Activity

Number of Subawards: 65

Total Subaward Amount: $23,315,718

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ21D0010

IDV Type: IDC

Timeline