Military hardware comprises of the machinery and physical equipment that are used by the armed forces, such as tanks, aircrft, and missiles.
While the governments of some countries purchase their military hardware directly through the Ministry of Defence, other countries employ the services of defence contractors to purchase hardware.
In some cases, the purchase is done jointly by the government with the assistance of a defence contractor or multiple defence contractors.
There are 2 categories of defence contracts
1. Single award contract
A single award contract occurs when there is only one company that is carrying out the defence contract. This process is less cumbersome but needs to be documented properly by the government. These type of contracts are awarded only to a sole company who can get any revenue under that contract.
2. Multiple award contract
This form of contract involves several companies obtaining a contract and then competing for task orders. Here, only those companies with a multiple award contract can compete for the task orders and task orders are the work.
Multiple award contracts are awarded under what is called a hunting license (which allows you to go out and find game) but they limit competition to only those who have won one of these multiple award contracts (allowing you to “hunt” for revenue amongst a select or broad class of potential customers).
An example of a multiple award contract is a General Services Administration (GSA) schedule. Under this process companies have multiple awards schedule for different hardware and businesses submit contract offers and establish pricing. Once a vendor is on the GSA schedule, then these opportunities are limited to only those people who have that schedule.
One of the ways government facilitates the multiple award contract is through Broad Agency Announcements (BAA).
The BAA is used by governments to solicit proposals from outside groups for certain research and development. The agency will then select proposals to fund as contracts or grants. BAAs are broad in their subject matter and focus on advancing science rather than acquiring specific products, which are instead covered under a request for proposals.
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