DoD's $45.8M R&D Contract for Space Vehicles Awarded to BAE Systems

Contract Overview

Contract Amount: $45,855,267 ($45.9M)

Contractor: BAE Systems Space & Mission Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2009-03-25

End Date: 2016-04-01

Contract Duration: 2,564 days

Daily Burn Rate: $17.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SPACE VEHICLE AND ALL ASSOCIATED WORK

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $45.9 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC. for work described as: SPACE VEHICLE AND ALL ASSOCIATED WORK Key points: 1. Contract focuses on research and development for space vehicles, indicating a need for advanced technological solutions. 2. The award to BAE Systems suggests a reliance on established defense contractors with proven capabilities in complex R&D. 3. A long performance period of 2,564 days (approx. 7 years) points to the intricate and long-term nature of the project. 4. The contract type (Cost Plus Fixed Fee) implies potential for cost overruns, requiring close monitoring. 5. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code highlights the scientific and technical depth of the work. 6. The absence of small business set-aside flags suggests the primary contractor is likely a large entity, with potential subcontracting opportunities. 7. The contract's geographic location in Colorado may indicate a concentration of aerospace and defense industry activity in that region.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific deliverables or comparable projects. The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs than fixed-price contracts if not managed diligently. While BAE Systems is a major defense contractor, the ultimate value for money will depend on the successful development of the space vehicle technology and its future application.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. This competitive process is intended to drive better pricing and innovation. However, the specific number of bidders is not provided, which limits a deeper analysis of the competitive intensity.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a more competitive environment that can lead to more cost-effective solutions and prevent price gouging.

Public Impact

The primary beneficiaries are likely the Department of Defense, which will receive advanced space vehicle capabilities. The contract supports the development of cutting-edge technologies crucial for national security and space exploration. The geographic impact is centered in Colorado, potentially boosting the local aerospace and defense workforce and economy. This contract could lead to advancements in scientific research and engineering, with potential spin-off technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur higher costs to achieve a larger fee, necessitating robust oversight.
The long duration of the contract increases the risk of scope creep and potential cost escalations over time.
Lack of specific performance metrics makes it difficult to assess the efficiency and effectiveness of the R&D efforts.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
BAE Systems is a well-established defense contractor with significant experience in space and mission systems.
The contract supports critical research and development for national security objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, with a strong emphasis on aerospace and defense applications. The market for space vehicle development is highly specialized, dominated by a few large defense contractors. Spending in this area is driven by national security priorities and technological advancement, with significant government investment.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. This suggests that the primary focus was on securing the best technical solution from a qualified contractor, likely a large entity. Subcontracting opportunities for small businesses may exist, but they are not explicitly mandated by the contract award details provided.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The CPFF structure necessitates rigorous financial oversight to monitor costs and ensure the fixed fee is justified. Transparency would be enhanced through regular reporting requirements from the contractor and potential audits.

Related Government Programs

Department of Defense Research and Development Programs
Space Systems Development Contracts
Aerospace Technology Research
National Security Space Initiatives

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Long Performance Period Risk
Technical Feasibility Uncertainty (R&D Nature)
Dependency on Single Contractor (BAE Systems)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.9 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC.. SPACE VEHICLE AND ALL ASSOCIATED WORK

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS SPACE & MISSION SYSTEMS INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $45.9 million.

What is the period of performance?

Start: 2009-03-25. End: 2016-04-01.

What is the track record of BAE Systems in delivering similar space vehicle R&D projects for the DoD?

BAE Systems has a substantial track record in defense contracting, including significant work in space systems, electronic warfare, and advanced technology development. They have been involved in numerous projects related to satellite technology, missile defense, and communication systems for various government agencies, including the Department of Defense. While specific details on past space vehicle R&D projects comparable to this contract are not publicly itemized, their extensive experience in complex, long-term defense programs suggests a capacity to handle the technical and logistical challenges inherent in such endeavors. Their history includes both successful program completions and instances where programs faced challenges, typical for large-scale R&D efforts. A deeper dive into their specific contract history with the DoD would reveal more granular performance data.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other R&D contract structures in terms of cost efficiency for the government?

Cost Plus Fixed Fee (CPFF) contracts are often used for R&D projects where the scope of work is not precisely defined, or where innovation and exploration are key objectives, making it difficult to establish a firm fixed price upfront. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing their profit. While this structure incentivizes the contractor to perform the work, it can lead to higher overall costs for the government compared to fixed-price contracts, as the contractor is not directly penalized for cost overruns beyond the agreed-upon fee. Fixed-price incentive (FPI) or firm-fixed-price (FFP) contracts, if feasible for the project's scope, can offer greater cost certainty. However, for highly uncertain R&D, CPFF can be appropriate if coupled with stringent oversight to manage costs effectively and ensure the fee remains reasonable relative to the effort.

What are the primary risks associated with a multi-year R&D contract for space vehicles, and how are they typically mitigated?

Multi-year R&D contracts for space vehicles carry several inherent risks. Technical risks include unforeseen scientific challenges, integration issues, and the possibility that the developed technology may not meet performance requirements. Schedule risks arise from the long duration, potential delays in funding, supply chain disruptions, or contractor performance issues. Cost risks are significant, especially with CPFF contracts, where actual costs can exceed initial estimates. Mitigation strategies include robust project management, phased development with clear milestones, regular technical reviews, strong government oversight of costs and progress, contingency planning, and clear contract clauses addressing scope changes and performance failures. Building strong communication channels with the contractor is also crucial for early identification and resolution of issues.

What is the potential impact of this contract on the broader aerospace and defense R&D landscape in Colorado?

A contract of this magnitude awarded to a major player like BAE Systems can have a significant positive impact on the aerospace and defense R&D landscape in Colorado. It can stimulate job creation within BAE Systems and its local supply chain, potentially attracting skilled engineers, scientists, and technicians to the region. Furthermore, it can foster innovation by driving advancements in space technology, which may lead to further research opportunities and technological spin-offs. The presence of such a contract can also enhance Colorado's reputation as a hub for aerospace and defense innovation, potentially attracting other companies and investments to the state. This could lead to a more robust ecosystem of research institutions, specialized suppliers, and skilled labor.

How does the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code inform our understanding of the contract's objectives?

The NAICS code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' broadly categorizes the contract's objective as scientific inquiry and experimentation aimed at discovering or interpreting facts, principles, or theories for application to new or improved products, processes, or services. For a space vehicle contract, this implies the work likely involves fundamental research, applied research, and experimental development in areas such as materials science, propulsion systems, avionics, structural engineering, and potentially life support systems if human spaceflight is a consideration. It signals that the contract is not for the production of existing hardware but for the creation of novel technologies or significant improvements to existing ones, requiring a high degree of scientific and engineering expertise.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corp (UEI: 006419147)

Address: 1600 COMMERCE ST, BOULDER, CO, 80301

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $86,071,665

Exercised Options: $59,235,833

Current Obligation: $45,855,267

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA881806D0002

IDV Type: IDC

Timeline