DoD's $32.8M radar warning system purchase for C-130s lacked competition, raising value concerns

Contract Overview

Contract Amount: $32,875,337 ($32.9M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2013-09-25

End Date: 2016-04-01

Contract Duration: 919 days

Daily Burn Rate: $35.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE AN/ALR-56M ADVANCED RADAR WARNING RECEIVER SYSTEM SHIPSETS AND SPARES APPLICABLE TO C-130 AIRCRAFT

Place of Performance

Location: GREENLAWN, SUFFOLK County, NEW YORK, 11740, UNITED STATES OF AMERICA

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: PURCHASE AN/ALR-56M ADVANCED RADAR WARNING RECEIVER SYSTEM SHIPSETS AND SPARES APPLICABLE TO C-130 AIRCRAFT Key points: 1. The contract awarded to BAE Systems for AN/ALR-56M radar warning receiver systems was not competed, limiting price discovery. 2. The sole-source nature of this award warrants scrutiny regarding whether the government secured the best possible value. 3. The fixed-price contract type offers some cost certainty but does not mitigate the risk of overpayment due to lack of competition. 4. The contract duration of 919 days suggests a significant need for these systems, underscoring the importance of competitive pricing. 5. The specific application to C-130 aircraft highlights a niche requirement within the broader defense electronics sector. 6. The absence of small business participation is noted, as the contract was not set aside.

Value Assessment

Rating: questionable

Without competitive bids, it is difficult to benchmark the value for money received. The firm fixed-price contract provides some cost control, but the lack of competition means the government may have paid a premium. Comparing this to similar radar warning receiver systems procured through competitive means would be necessary to assess true value. The total award amount of $32.8 million for 1 unit (likely shipsets) requires careful analysis against market rates for comparable technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, BAE Systems, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no direct price comparison or incentive for vendors to offer their lowest possible price.

Taxpayer Impact: Taxpayers may have paid more than necessary due to the absence of a competitive bidding process. Without competing offers, the government lacked leverage to negotiate the best possible price for these critical radar warning systems.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating C-130 aircraft, who will receive enhanced threat detection capabilities. The services delivered include the provision of advanced radar warning receiver systems, crucial for survivability in contested airspace. The geographic impact is primarily within military installations where C-130s are based and maintained. Workforce implications are likely concentrated within BAE Systems' manufacturing and integration facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for other capable vendors.
Potential for vendor lock-in with specialized systems.

Positive Signals

Award to an established defense contractor with expertise in electronic warfare systems.
Firm fixed-price contract provides cost certainty for the government.
System is critical for enhancing aircraft survivability.

Sector Analysis

This contract falls within the Defense Electronics sector, specifically focusing on electronic warfare systems. The market for such specialized components is often characterized by high barriers to entry due to technological complexity and stringent military requirements. While specific market size data for AN/ALR-56M shipsets is not readily available, the broader defense electronics market is substantial, with significant government investment. This contract represents a specific procurement within that larger ecosystem, addressing a critical need for the C-130 platform.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the available data. The award to a large prime contractor like BAE Systems suggests that the primary execution will be handled by the prime or its direct large-business partners. This limits the direct economic benefit to the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and financial accountability. The Department of Defense's Inspector General also has jurisdiction for audits and investigations. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are often not publicly disclosed.

Related Government Programs

AN/ALR-56M Radar Warning Receiver
C-130 Aircraft Systems
Electronic Warfare Systems
Defense Logistics Agency Procurements
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. PURCHASE AN/ALR-56M ADVANCED RADAR WARNING RECEIVER SYSTEM SHIPSETS AND SPARES APPLICABLE TO C-130 AIRCRAFT

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $32.9 million.

What is the period of performance?

Start: 2013-09-25. End: 2016-04-01.

What is the track record of BAE Systems in delivering similar electronic warfare systems to the Department of Defense?

BAE Systems is a major defense contractor with a long history of developing and supplying electronic warfare (EW) systems, including radar warning receivers, to various branches of the U.S. military. They have been involved in numerous programs across different platforms, often serving as a prime integrator or key component supplier. Their experience includes systems for fighter jets, bombers, and transport aircraft, similar to the C-130. While specific performance metrics for past contracts are often proprietary, BAE Systems generally has a strong reputation for technical capability in this domain. However, the lack of competition on this specific AN/ALR-56M contract means that even with a strong track record, the government's ability to ensure optimal pricing and value is diminished compared to a competitive scenario.

How does the awarded price of $32.8 million for the AN/ALR-56M system compare to market rates or similar systems?

Directly comparing the $32.8 million award for the AN/ALR-56M system to market rates is challenging due to the sole-source nature of the contract and the proprietary details of the system. Radar warning receiver systems are highly specialized and technologically advanced, with costs varying significantly based on features, integration complexity, and quantity. Without competitive bids, there is no benchmark price established through market forces for this specific procurement. To assess value, one would need to compare this award to historical data for similar systems procured competitively by the DoD or other allied nations, factoring in inflation, technological advancements, and specific system capabilities. The absence of such comparative data makes a definitive value assessment difficult.

What are the primary risks associated with a sole-source procurement of this magnitude?

The primary risk associated with a sole-source procurement of this magnitude ($32.8 million) is the potential for paying a non-competitive price, meaning the government may not have achieved the best possible value for its investment. Without competition, there is less incentive for the contractor to minimize costs or offer the most aggressive pricing. Another risk is vendor lock-in, where the government becomes dependent on a single supplier for critical components, potentially limiting future flexibility and increasing long-term costs. Furthermore, a sole-source award can stifle innovation by preventing other capable companies from entering the market or demonstrating their solutions, potentially leading to missed opportunities for more advanced or cost-effective technologies.

What is the expected program effectiveness or impact of the AN/ALR-56M system on C-130 operations?

The AN/ALR-56M Advanced Radar Warning Receiver (RWR) system is designed to significantly enhance the survivability of C-130 aircraft by providing timely and accurate detection of radar-guided threats. Its integration into the C-130 platform allows aircrews to identify and react to potential dangers, such as surface-to-air missile (SAM) threats or enemy aircraft radar, thereby increasing mission success rates and reducing the risk of aircraft loss. The effectiveness of the system is crucial for C-130s operating in contested or high-risk environments, supporting a wide range of missions including troop transport, cargo delivery, and special operations. The procurement aims to ensure that C-130 fleets are equipped with modern defensive capabilities to meet evolving threat landscapes.

What are the historical spending patterns for AN/ALR-56M systems or similar radar warning receivers by the Department of Defense?

Historical spending patterns for the AN/ALR-56M system specifically are not detailed in the provided data, beyond this single $32.8 million award. However, the AN/ALR-56 family of systems has been a staple in U.S. Air Force and Navy aircraft for decades, indicating a consistent, albeit potentially fluctuating, level of investment over time. Spending on similar radar warning receivers across the DoD would represent a significant portion of the overall electronic warfare budget. This budget is influenced by geopolitical factors, threat assessments, and the modernization cycles of various aircraft platforms. Without access to detailed historical contract databases or program budget documents, precise historical spending figures for this specific system or category are difficult to ascertain, but it is reasonable to assume consistent, multi-million dollar investments over many years for such critical survivability equipment.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: BAE Systems PLC (UEI: 217304393)

Address: 100 CAMPUS RD STE 1, TOTOWA, NJ, 07512

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $32,875,337

Exercised Options: $32,875,337

Current Obligation: $32,875,337

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $1,300,490

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPM4AX08D9416

IDV Type: IDC

Timeline