DoD Awards $80.8M Firm Fixed Price Contract to BAE Systems for M88A2 Hercules Vehicles
Contract Overview
Contract Amount: $80,827,497 ($80.8M)
Contractor: BAE Systems Land & Armaments L.P.
Awarding Agency: Department of Defense
Start Date: 2025-12-22
End Date: 2028-11-30
Contract Duration: 1,074 days
Daily Burn Rate: $75.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCUREMENT OF M88A2 HERCULES VEHICLES
Place of Performance
Location: YORK, YORK County, PENNSYLVANIA, 17408
Plain-Language Summary
Department of Defense obligated $80.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: PROCUREMENT OF M88A2 HERCULES VEHICLES Key points: 1. Significant investment in armored vehicle sustainment. 2. Sole-source award to BAE Systems, a major defense contractor. 3. Potential for higher costs due to lack of competition. 4. Focus on maintaining critical military equipment readiness.
Value Assessment
Rating: fair
The contract value of $80.8M for M88A2 Hercules vehicles appears reasonable given the specialized nature of military hardware. However, without competitive bidding, it's difficult to ascertain if this represents the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to BAE Systems. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive procurement.
Taxpayer Impact: The lack of competition may result in the government paying a premium for these vehicles, impacting overall taxpayer value.
Public Impact
Ensures continued operational readiness of essential recovery vehicles. Supports BAE Systems' manufacturing capabilities and workforce. Potential impact on future competitive landscape for similar vehicles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Firm Fixed Price contract with long duration
Positive Signals
- Supports critical defense needs
- Long-term contract provides stability
Sector Analysis
This procurement falls within the Defense sector, specifically military vehicle manufacturing. Spending benchmarks for armored vehicle production can vary widely based on complexity and quantity, but large sole-source contracts warrant scrutiny.
Small Business Impact
This contract was awarded to BAE Systems, a large defense contractor, and there is no indication of small business participation in this specific award. Further analysis would be needed to determine if subcontracting opportunities exist.
Oversight & Accountability
The sole-source nature of this award suggests limited oversight in the initial award phase. Ongoing oversight will be crucial to ensure BAE Systems meets contract requirements and delivers value.
Related Government Programs
- Military Armored Vehicle, Tank, and Tank Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding may lead to inflated costs.
- Sole-source award limits transparency and accountability.
- Long contract duration (2028) increases risk of cost overruns or performance issues.
- No small business participation explicitly stated.
Tags
military-armored-vehicle-tank-and-tank-c, department-of-defense, pa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $80.8 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. PROCUREMENT OF M88A2 HERCULES VEHICLES
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 $80.8 million.
What is the period of performance?
Start: 2025-12-22. End: 2028-11-30.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies must document these justifications thoroughly. For this M88A2 procurement, understanding the specific reasons BAE Systems was the only viable option is critical to assessing the necessity of foregoing competition and its potential cost implications.
How does the pricing of this contract compare to historical M88A2 procurements or similar vehicle contracts?
Benchmarking this $80.8M contract against previous M88A2 acquisitions or comparable armored vehicle contracts is essential for evaluating value. Without competitive bids, historical data or industry benchmarks become the primary tools for assessing price reasonableness. Any significant deviations from historical pricing should be thoroughly investigated to ensure taxpayer funds are used efficiently.
What are the performance metrics and delivery schedules, and how will contract performance be monitored?
Effective oversight requires clear performance metrics and delivery schedules outlined in the contract. The Department of the Army must actively monitor BAE Systems' progress against these benchmarks to ensure timely delivery and adherence to quality standards. Robust performance monitoring helps mitigate risks associated with long-term, sole-source contracts and ensures the government receives the expected value.
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
Offers Received: 1
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: $80,827,497
Exercised Options: $80,827,497
Current Obligation: $80,827,497
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2025-12-22
Current End Date: 2028-11-30
Potential End Date: 2028-11-30 00:00:00
Last Modified: 2025-12-29
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