Department of the Army awards $42.45M contract for facilities support services to BAE Systems

Contract Overview

Contract Amount: $42,454,101 ($42.5M)

Contractor: BAE Systems Ordnance Systems Inc

Awarding Agency: Department of Defense

Start Date: 2014-11-25

End Date: 2015-09-30

Contract Duration: 309 days

Daily Burn Rate: $137.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PARTIAL SETTLEMENT OF CATEGORY C REQUESTS FOR EQUITABLE ADJUSTMENT

Place of Performance

Location: RADFORD, RADFORD (CITY) County, VIRGINIA, 24141, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $42.5 million to BAE SYSTEMS ORDNANCE SYSTEMS INC for work described as: PARTIAL SETTLEMENT OF CATEGORY C REQUESTS FOR EQUITABLE ADJUSTMENT Key points: 1. The contract value of $42.45M represents a significant investment in facilities support. 2. BAE Systems, a major defense contractor, secured this award. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The duration of the contract is approximately 309 days. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The award was made by the Department of the Army, a key component of the DoD.

Value Assessment

Rating: fair

The contract value of $42.45M for facilities support services over approximately 10 months appears to be within a reasonable range for a large-scale government contract of this nature. Benchmarking against similar facilities support contracts awarded by the Department of Defense or other agencies would provide a clearer picture of value for money. The firm fixed price structure suggests that the contractor bears the primary responsibility for cost overruns, which can be a positive indicator for the government if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this requirement. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: The full and open competition process is generally favorable for taxpayers as it aims to ensure the government receives the best possible value by encouraging a wide range of offers and driving down costs through competitive pressure.

Public Impact

This contract directly benefits the Department of the Army by ensuring the provision of essential facilities support services. The services delivered are critical for the operational readiness and maintenance of military facilities. The geographic impact is likely concentrated in Virginia, where the contract is administered. The contract supports jobs within BAE Systems and potentially its subcontractors, contributing to the defense industrial workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The limited number of bids (2) could indicate potential barriers to entry or a lack of broader market interest, which might affect long-term competition.
The contract's relatively short duration (309 days) might suggest a need for ongoing re-competition, potentially leading to administrative overhead and fluctuating contractor performance.
The specific nature of 'PARTIAL SETTLEMENT OF CATEGORY C REQUESTS FOR EQUITABLE ADJUSTMENT' in the description is unclear and could represent unresolved issues from prior contract phases.

Positive Signals

Awarding under full and open competition is a positive signal for fair market access and potential cost savings.
The firm fixed price contract type effectively transfers cost overrun risk to the contractor, protecting taxpayer funds.
BAE Systems is a well-established defense contractor with a significant track record, suggesting a degree of reliability in performance.

Sector Analysis

Facilities Support Services fall under the broader category of professional, scientific, and technical services, often encompassing a wide range of activities from maintenance and repair to logistics and base operations support. The market for these services within the defense sector is substantial, driven by the extensive infrastructure managed by agencies like the Department of the Army. Comparable spending benchmarks would typically be assessed against the total value of facilities management contracts awarded annually by the DoD, which runs into billions of dollars.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, as BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors, depending on BAE's subcontracting plan and the specific needs of the facilities support services required.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are inherent in the firm fixed price contract type, where the contractor is responsible for delivering services within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and oversight activities may not always be publicly detailed.

Related Government Programs

Base Operations Support (BOS)
Logistics and Supply Chain Management
Facilities Maintenance and Repair
Construction and Engineering Services

Risk Flags

Unclear scope due to 'partial settlement' reference
Limited competition (2 bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.5 million to BAE SYSTEMS ORDNANCE SYSTEMS INC. PARTIAL SETTLEMENT OF CATEGORY C REQUESTS FOR EQUITABLE ADJUSTMENT

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS ORDNANCE SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $42.5 million.

What is the period of performance?

Start: 2014-11-25. End: 2015-09-30.

What is the historical spending pattern for facilities support services by the Department of the Army, and how does this award compare?

The Department of the Army, as a major component of the Department of Defense, consistently allocates significant funds towards facilities support services to maintain its vast infrastructure. Historical spending data reveals a multi-billion dollar annual expenditure across various contracts for base operations, maintenance, repair, and related services. This specific award of $42.45 million, while substantial for a single contract, represents a fraction of the Army's overall annual investment in facilities management. Analyzing trends in contract values, competition levels, and service scope over the past five to ten years would provide a clearer context for this award's significance and whether it aligns with established spending patterns or indicates a shift in strategy or market conditions.

What specific types of facilities support services are included under this contract?

The contract description 'PARTIAL SETTLEMENT OF CATEGORY C REQUESTS FOR EQUITABLE ADJUSTMENT' and the North American Industry Classification System (NAICS) code 561210 for 'Facilities Support Services' suggest a broad scope. Typically, these services encompass a range of activities necessary for the operation and maintenance of government facilities. This can include, but is not limited to, grounds maintenance, custodial services, pest control, refuse collection, facility repair and upkeep (HVAC, plumbing, electrical), security services, and potentially administrative support related to facility management. The 'partial settlement' aspect might indicate that this award is resolving specific claims or adjustments related to a prior or ongoing larger facility services requirement, rather than initiating a new, comprehensive service package.

What is BAE Systems' track record with similar facilities support contracts for the Department of Defense?

BAE Systems is a major defense contractor with extensive experience across various domains, including logistics and support services. While their primary reputation is often associated with complex weapon systems and platforms, they do engage in facilities support and base operations. Their track record with similar contracts would involve reviewing past performance evaluations, any significant contract disputes or awards, and their demonstrated capability in managing large-scale service contracts for government entities. Information on their past performance, often available through government databases like the Contractor Performance Assessment Reporting System (CPARS), would indicate their reliability, quality of service, and adherence to contract terms in delivering facilities support.

How does the firm fixed price (FFP) contract type impact risk and value for this facilities support service?

The Firm Fixed Price (FFP) contract type is generally considered advantageous for the government when the scope of work is well-defined and unlikely to change significantly. Under an FFP contract, the contractor, BAE Systems in this case, assumes the primary risk for cost overruns. This means that the agreed-upon price remains constant regardless of the contractor's actual costs incurred. For the government, this provides cost certainty and predictability, making budgeting easier. The value proposition lies in the contractor's incentive to manage costs efficiently to maximize profit. However, if the scope is not clearly defined or if unforeseen issues arise, the contractor may be less inclined to perform additional work without a formal change order, potentially leading to disputes or a need for contract modifications.

What does the 'PARTIAL SETTLEMENT OF CATEGORY C REQUESTS FOR EQUITABLE ADJUSTMENT' signify in the context of this award?

The phrase 'PARTIAL SETTLEMENT OF CATEGORY C REQUESTS FOR EQUITABLE ADJUSTMENT' suggests that this contract award is related to resolving outstanding financial claims or adjustments from a previous contract or a series of contracts. Requests for Equitable Adjustment (REA) are typically submitted by contractors when they believe they are entitled to additional compensation or time due to government-caused delays, changes in scope, or other unforeseen circumstances. The 'partial settlement' indicates that this award addresses a portion of these claims, possibly related to a specific category ('Category C') of issues. The fact that it's a settlement implies a negotiated agreement between the contractor and the government to resolve these disputes, potentially avoiding more costly litigation.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: STATE RT 114, RADFORD, VA, 24141

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,454,101

Exercised Options: $42,454,101

Current Obligation: $42,454,101

Parent Contract

Parent Award PIID: W52P1J11G0002

IDV Type: BOA

Timeline