DoD Awards BAE Systems $484M for 40 Self-Propelled Howitzer Systems, Delivery Order Under Existing Contract
Contract Overview
Contract Amount: $484,423,327 ($484.4M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2024-07-03
End Date: 2027-09-30
Contract Duration: 1,184 days
Daily Burn Rate: $409.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PRODUCTION AND SUPPORT EFFORTS FOR 40 SELF PROPELLED HOWITZER SYSTEM VEHICLE SETS
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $484.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: PRODUCTION AND SUPPORT EFFORTS FOR 40 SELF PROPELLED HOWITZER SYSTEM VEHICLE SETS Key points: 1. Significant investment in armored vehicle production for the Army. 2. Sole-source award to BAE Systems, limiting competitive pricing. 3. Long-term contract (2024-2027) indicates ongoing need and potential for future modifications. 4. Focus on a critical defense platform highlights strategic importance.
Value Assessment
Rating: fair
The $484.4 million award for 40 howitzer systems averages over $12 million per unit. Without competitive bids, it's difficult to assess if this price is optimal compared to similar systems or potential alternatives.
Cost Per Unit: $12,110,583
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to BAE Systems. This lack of competition may lead to higher prices than if multiple vendors had submitted bids.
Taxpayer Impact: Taxpayer funds are committed to a single vendor without a competitive process, potentially increasing the overall cost of acquiring these essential defense systems.
Public Impact
Enhances Army's artillery capabilities with advanced self-propelled howitzers. Supports domestic manufacturing and jobs within the defense industrial base. Ensures readiness for military operations through modernization of key equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High per-unit cost
- Long-term contract duration
Positive Signals
- Critical defense system acquisition
- Supports established defense contractor
Sector Analysis
The defense sector, particularly armored vehicle manufacturing, involves complex engineering and high production costs. Spending benchmarks for similar systems can vary widely based on technology and quantity, but this award represents a substantial investment in a specialized platform.
Small Business Impact
This contract was awarded directly to BAE Systems, a large prime contractor. There is no explicit information provided regarding subcontracting opportunities for small businesses within this specific delivery order.
Oversight & Accountability
As a sole-source award, oversight is crucial to ensure fair pricing and adherence to contract terms. The Department of the Army's contracting command is responsible for monitoring performance and expenditures throughout the contract's lifecycle.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- High per-unit cost requires justification.
- Long contract duration may not reflect current market efficiencies.
- Lack of transparency on small business participation.
- Potential for cost overruns without competitive pressure.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, pa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $484.4 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. PRODUCTION AND SUPPORT EFFORTS FOR 40 SELF PROPELLED HOWITZER SYSTEM VEHICLE SETS
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $484.4 million.
What is the period of performance?
Start: 2024-07-03. End: 2027-09-30.
What is the justification for the sole-source award, and were alternative solutions considered?
The justification for a sole-source award typically involves unique capabilities, existing system compatibility, or urgent needs where only one vendor can fulfill the requirement. Without further details, it's unclear if BAE Systems possesses exclusive rights or if competitive procurement was deemed impractical or too time-consuming for this specific acquisition.
How does the per-unit cost compare to previous acquisitions of similar howitzer systems?
Benchmarking this $12.1 million per-unit cost against historical data for the M109 Paladin or similar self-propelled howitzers is essential. Inflation, technological upgrades, and changes in production scale can all influence costs, but a significant deviation from past pricing warrants scrutiny, especially in a sole-source context.
What are the key performance metrics and delivery milestones for this contract, and how will they be tracked?
Effective oversight requires clearly defined performance metrics and delivery milestones for the 40 howitzer systems. The Army must have robust tracking mechanisms to monitor BAE Systems' progress, ensure quality standards are met, and verify timely delivery to maintain operational readiness and justify the significant expenditure.
Industry Classification
NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing
Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Ball Corporation
Address: 1100 BAIRS RD, YORK, PA, 17408
Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations
Financial Breakdown
Contract Ceiling: $797,925,963
Exercised Options: $797,925,963
Current Obligation: $484,423,327
Subaward Activity
Number of Subawards: 311
Total Subaward Amount: $155,009,582
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W912CH24D0016
IDV Type: IDC
Timeline
Start Date: 2024-07-03
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 00:00:00
Last Modified: 2026-01-07
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