DoD's $43.9M contract with BAE Systems for telecommunications services awarded under full and open competition

Contract Overview

Contract Amount: $43,871,510 ($43.9M)

Contractor: BAE Systems Technical Services

Awarding Agency: Department of Defense

Start Date: 2003-10-14

End Date: 2010-09-24

Contract Duration: 2,537 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $43.9 million to BAE SYSTEMS TECHNICAL SERVICES for work described as: Key points: 1. Contract awarded to a large, established defense contractor. 2. Long contract duration of 2537 days suggests a need for sustained services. 3. Firm Fixed Price contract type aims to control costs. 4. Awarded by the Department of Defense, indicating a focus on national security or defense operations. 5. The contract falls under the 'Other Telecommunications' NAICS code, suggesting a broad range of potential services. 6. The contract was awarded by the Defense Contract Management Agency, a key oversight body within DoD.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details. However, a $43.9 million contract over approximately seven years for telecommunications services, averaging around $6.3 million annually, appears within a reasonable range for large-scale government telecommunications support. The firm fixed-price structure suggests an attempt to manage cost predictability. Further analysis would require comparing the specific deliverables and service levels against similar contracts awarded during the same period to assess true value for money.

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 3 bidders suggests a moderate level of competition for this telecommunications services contract. While more than one bidder is positive, a higher number could potentially drive prices lower. The competition level here likely provided a reasonable basis for price discovery but may not have achieved the most aggressive pricing possible.

Taxpayer Impact: Taxpayers benefit from the assurance that the government sought multiple offers, which generally leads to more competitive pricing than a sole-source award. The moderate competition suggests a balance between ensuring adequate vendor pool and avoiding excessive administrative burden.

Public Impact

The primary beneficiaries are likely elements within the Department of Defense requiring telecommunications infrastructure and support. Services delivered could encompass network management, communication systems maintenance, and potentially the deployment of new telecommunications technologies. The contract's performance location is Maryland (MD), indicating a geographic focus for service delivery. Workforce implications include the potential for employment of telecommunications specialists, engineers, and support staff by BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed carefully.
Scope creep is a potential risk in long-term telecommunications contracts if not clearly defined and monitored.
Reliance on a single large contractor might limit opportunities for smaller, innovative firms in the long run.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Full and open competition suggests a robust process for selecting the vendor.
Award to a large, experienced contractor like BAE Systems may indicate a lower risk of performance failure.

Sector Analysis

The telecommunications sector is a critical component of modern infrastructure, supporting everything from basic voice and data services to complex command and control systems. Within the federal government, spending in this sector is substantial, covering a wide array of needs including network modernization, cybersecurity, and specialized communication systems for defense and intelligence agencies. This contract, falling under NAICS code 517910 (Other Telecommunications), likely represents a segment of this broader spending, focusing on services that may not fit neatly into more specific categories like wireless or wired telecommunications.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. The award to BAE Systems, a large prime contractor, suggests that small businesses are unlikely to be directly involved as the prime awardee. However, BAE Systems may engage small businesses as subcontractors to fulfill portions of the contract requirements, contributing to the small business ecosystem. Further investigation into subcontracting plans would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

The Department of Defense Contract Management Agency (DCMA) is responsible for overseeing contract performance, ensuring compliance with terms and conditions, and monitoring contractor progress. The firm fixed-price nature of the contract provides a degree of financial oversight by establishing a ceiling cost. Transparency regarding specific performance metrics and deliverables would be enhanced through public reporting mechanisms and potential Inspector General reviews, though such details are not explicitly provided.

Related Government Programs

DoD Telecommunications Services Contracts
Federal IT Services Contracts
Defense Communications Infrastructure
Government Network Services

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for vendor lock-in over the contract's lifespan.
Scope creep risk in long-term service contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.9 million to BAE SYSTEMS TECHNICAL SERVICES. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNICAL SERVICES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $43.9 million.

What is the period of performance?

Start: 2003-10-14. End: 2010-09-24.

What specific telecommunications services were included under this contract?

The provided data indicates the contract falls under NAICS code 517910, 'Other Telecommunications.' This broad category can encompass a wide range of services, including but not limited to, telecommunications network management, maintenance of communication equipment, potentially satellite communications, specialized data transmission services, and integration of various communication systems. Without access to the contract's statement of work (SOW) or detailed descriptions, the precise nature of the services remains unspecified. However, given the awarding agency (Department of Defense) and the contractor (BAE Systems), it is likely related to supporting military operations, command and control, or other defense-related communication needs.

How does the $43.9 million value compare to similar telecommunications contracts awarded by the DoD during that period?

Comparing the $43.9 million value requires context regarding the contract's duration (2537 days, approximately 7 years) and the specific services rendered. Averaging roughly $6.3 million per year, this contract appears to be of moderate to significant size for telecommunications support. During the period of 2003-2010, the DoD was actively engaged in numerous telecommunications modernization and support efforts. Larger, multi-year contracts for enterprise-wide network services or specialized systems could easily exceed this amount, while smaller, project-specific contracts would be less. To provide a precise benchmark, a detailed analysis of comparable contracts for similar scope and duration within the DoD during that timeframe would be necessary, considering factors like inflation and technological advancements.

What is BAE Systems' track record with similar government contracts, particularly within the DoD?

BAE Systems is a major global defense, aerospace, and security company with a substantial history of contracting with the U.S. Department of Defense and other government agencies. They have a broad portfolio that includes electronic systems, platforms, and services. For telecommunications and IT services, BAE Systems has consistently secured large contracts across various defense and intelligence sectors. Their track record generally indicates a capacity to handle complex, large-scale projects. However, like any large contractor, specific contract performance can vary, and a detailed review of past performance evaluations, any past performance issues, or contract disputes related to telecommunications services would be necessary for a comprehensive assessment.

What are the potential risks associated with a long-duration contract like this?

Long-duration contracts, such as this 2537-day (approx. 7-year) agreement, carry several potential risks. One primary risk is technological obsolescence; telecommunications technology evolves rapidly, and a contract spanning several years might lock the government into outdated systems or services if not structured with flexibility for upgrades. Another risk is vendor lock-in, where the government becomes heavily reliant on a single provider, making it difficult and costly to switch vendors later. Cost escalation beyond initial projections can also be a concern, especially if the firm fixed-price structure doesn't adequately account for unforeseen market changes or if scope creep occurs. Finally, maintaining consistent service quality and performance over an extended period requires diligent oversight.

How does the 'firm fixed price' contract type influence cost control and risk allocation?

The 'firm fixed price' (FFP) contract type is designed to provide the greatest cost control for the government. Under an FFP agreement, the contractor, BAE Systems in this case, assumes the primary risk for cost overruns. The price is set and generally not subject to adjustment unless there are specific contract modifications or unforeseen circumstances defined within the contract itself. This allocation of risk incentivizes the contractor to manage its costs efficiently and to accurately estimate the scope of work upfront. For the government, it offers budget predictability. However, it can also lead contractors to build in higher contingency margins to cover potential risks, potentially resulting in a higher initial price compared to cost-reimbursement contracts.

Industry Classification

NAICS: Information › Other Telecommunications › Other Telecommunications

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 557 MARY ESTHER CUT-OFF, FORT WALTON BE, FL

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,184,302

Exercised Options: $7,845,118

Current Obligation: $43,871,510

Contract Characteristics

Cost or Pricing Data: NO

Timeline