DoD awards BAE Systems $26.7M R&D contract for MERCURY project

Contract Overview

Contract Amount: $26,682,883 ($26.7M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc

Awarding Agency: Department of Defense

Start Date: 2019-09-27

End Date: 2026-04-30

Contract Duration: 2,407 days

Daily Burn Rate: $11.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: MERCURY

Place of Performance

Location: MERRIMACK, HILLSBOROUGH County, NEW HAMPSHIRE, 03054

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $26.7 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC for work described as: MERCURY Key points: 1. Contract awarded to BAE Systems for R&D in physical, engineering, and life sciences. 2. Full and open competition after exclusion of sources indicates a specific, justified approach. 3. Potential risks include cost overruns given the Cost Plus Fixed Fee structure. 4. The IT sector is heavily influenced by R&D investments like this.

Value Assessment

Rating: fair

The contract value of $26.7M for a 2407-day duration appears reasonable for R&D. However, without specific deliverables or benchmarks for similar R&D efforts, a precise value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a limited competition where specific sources were identified and allowed to bid. This method can impact price discovery by potentially limiting the number of competitive offers.

Taxpayer Impact: Taxpayer funds are being used for advanced research and development, which can lead to future technological advancements and economic benefits, but also carries inherent risks of research failure.

Public Impact

Advancement of scientific and technological capabilities within the Department of Defense. Potential for new technologies that could have dual-use applications in the civilian sector. Investment in specialized research areas that may not be readily available in the commercial market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs.
Limited competition may lead to higher prices than a fully open process.
Long contract duration increases exposure to changing technological landscapes and economic conditions.

Positive Signals

Focus on critical R&D areas for national security.
Involvement of a major defense contractor suggests expertise and capability.
Potential for significant technological breakthroughs.

Sector Analysis

This contract falls under Research and Development in the Physical, Engineering, and Life Sciences. Spending in this sector is crucial for maintaining technological superiority but can be highly variable and subject to research outcomes.

Small Business Impact

The contract was awarded to BAE Systems, a large defense contractor, and there is no indication of small business participation in this specific award. Opportunities for small businesses may exist further down the subcontracting chain.

Oversight & Accountability

The Department of the Air Force is the contracting agency. Oversight will be critical to ensure the R&D objectives are met efficiently and effectively within the allocated budget, especially given the contract type.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Cost Overruns
Research Failure
Scope Creep
Technological Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.7 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. MERCURY

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $26.7 million.

What is the period of performance?

Start: 2019-09-27. End: 2026-04-30.

What specific research objectives does the MERCURY project aim to achieve, and how will success be measured?

The MERCURY project's specific research objectives are not detailed in the provided data. Success measurement in R&D contracts typically involves achieving defined technical milestones, demonstrating proof-of-concept, or developing prototypes that meet specified performance criteria. Detailed metrics would be outlined in the contract's Statement of Work.

What are the primary risks associated with the Cost Plus Fixed Fee contract structure for this R&D effort?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract for R&D is that the contractor may have less incentive to control costs, as their profit is fixed. If costs escalate, the government bears the increased expense, potentially exceeding the initial budget. Effective oversight is crucial to mitigate this.

How does this R&D investment align with the Department of Defense's broader strategic technology goals?

Without knowing the specific focus of the MERCURY project, it's difficult to definitively align it with DoD's strategic goals. However, R&D in physical, engineering, and life sciences is fundamental to advancing capabilities in areas like artificial intelligence, advanced materials, cyber warfare, and autonomous systems, which are key DoD priorities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA865019S7925

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 144 DANIEL WEBSTER HWY #24, MERRIMACK, NH, 03054

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $30,253,151

Exercised Options: $30,253,151

Current Obligation: $26,682,883

Actual Outlays: $5,055,066

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $1,723,756

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline