Defense Spends $16.5M on Engineering Services with BAE Systems Australia, No Competition Identified

Contract Overview

Contract Amount: $16,556,363 ($16.6M)

Contractor: BAE Systems Australia Limited

Awarding Agency: Department of Defense

Start Date: 2019-08-09

End Date: 2024-10-15

Contract Duration: 1,894 days

Daily Burn Rate: $8.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES

Plain-Language Summary

Department of Defense obligated $16.6 million to BAE SYSTEMS AUSTRALIA LIMITED for work described as: ENGINEERING SERVICES Key points: 1. Significant contract value of $16.5M for engineering services. 2. Sole-source award to BAE Systems Australia raises competition concerns. 3. Long contract duration of 1894 days suggests ongoing need. 4. Cost-plus fixed fee contract type may incentivize cost escalation.

Value Assessment

Rating: questionable

The contract is a Cost Plus Fixed Fee type, which can lead to higher costs if not managed carefully. Benchmarking against similar engineering services contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for a $16.5M contract means taxpayers may not be receiving the best possible price for these engineering services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Potential for reduced innovation and service quality without market pressure. Lack of transparency in the procurement process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration

Positive Signals

Specific engineering services provided
Awarded by Department of Defense

Sector Analysis

Engineering services are critical for defense projects, encompassing design, analysis, and technical support. Spending benchmarks vary widely based on project complexity and duration, but $16.5M over nearly 5 years is substantial.

Small Business Impact

This contract was awarded to BAE Systems Australia Limited, a large corporation. There is no indication that small businesses were involved in this specific procurement, missing an opportunity for their participation.

Oversight & Accountability

The Department of Defense awarded this contract. Oversight is crucial to ensure the cost-plus fixed fee structure is managed effectively and that the services provided are necessary and delivered at a fair price.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Cost-plus contract type
Long contract duration
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.6 million to BAE SYSTEMS AUSTRALIA LIMITED. ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS AUSTRALIA LIMITED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.6 million.

What is the period of performance?

Start: 2019-08-09. End: 2024-10-15.

What specific engineering services are being procured, and why was a sole-source award deemed necessary?

The specific engineering services are classified under NAICS code 541330, which covers engineering services. A sole-source award typically occurs when only one vendor can provide the required services due to unique capabilities, proprietary technology, or urgent needs. Justification for this specific award would need to be reviewed by the contracting agency.

What are the potential cost overruns associated with the Cost Plus Fixed Fee contract type for this $16.5M award?

Cost Plus Fixed Fee contracts carry inherent risks of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. Without detailed cost data and performance metrics, it's difficult to quantify potential overruns. However, the longer the contract duration, the greater the opportunity for costs to escalate beyond initial projections.

How does the lack of competition impact the overall effectiveness and value for money of this engineering services contract?

The absence of competition significantly hinders the government's ability to secure the best value. Without competing bids, there's no market-driven pressure to optimize pricing or encourage innovative solutions. This can lead to suboptimal outcomes and taxpayers potentially paying more than necessary for the engineering services rendered.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA855517R0004

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: EVANS BUILDING TARANAKI RD, EDINBURGH PARKS

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, International Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $16,556,363

Exercised Options: $16,556,363

Current Obligation: $16,556,363

Actual Outlays: $31,264

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA855519D0004

IDV Type: IDC

Timeline