DoD's $20.6M R&D Contract for Resilient Mission Systems Awarded to BAE Systems

Contract Overview

Contract Amount: $20,681,811 ($20.7M)

Contractor: BAE Systems Space & Mission Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2021-04-23

End Date: 2028-12-31

Contract Duration: 2,809 days

Daily Burn Rate: $7.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESILIENT AND AGILE MISSION SYSTEMS

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC. for work described as: RESILIENT AND AGILE MISSION SYSTEMS Key points: 1. Contract focuses on advanced research and development, indicating a need for cutting-edge solutions. 2. BAE Systems, a major defense contractor, secured this award, suggesting established capabilities. 3. The definitive contract type implies a long-term relationship for a specific scope of work. 4. Cost Plus Fixed Fee pricing structure may present cost control challenges if not closely monitored. 5. The contract duration of over 2800 days highlights a significant, multi-year commitment. 6. Research and Development in Physical, Engineering, and Life Sciences is a critical but often complex area. 7. Awarded by the Department of the Air Force, aligning with strategic aerospace priorities.

Value Assessment

Rating: fair

Benchmarking R&D contracts is inherently difficult due to the unique nature of innovation. However, the Cost Plus Fixed Fee (CPFF) structure, while common for R&D, can lead to cost overruns if not managed meticulously. The total award amount of $20.6 million over nearly 8 years suggests a moderate investment for the scope of research, but without specific deliverables or milestones, assessing value for money is challenging. Further analysis would require understanding the specific research objectives and expected outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is generally favorable for price discovery and ensuring the government receives competitive offers. The presence of two bids suggests a reasonable level of competition for this specialized R&D requirement.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces, ensuring that the government is not overpaying for research and development services.

Public Impact

The Department of the Air Force is the primary beneficiary, seeking advancements in resilient mission systems. This contract supports research and development activities, potentially leading to new technologies and capabilities. The geographic impact is likely concentrated in areas where BAE Systems conducts its R&D operations. Workforce implications may include employment for scientists, engineers, and technical specialists involved in the research.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF pricing can incentivize cost escalation if not rigorously managed.
The long contract duration may reduce flexibility if mission requirements change significantly.
Assessing the true value of R&D outcomes can be challenging until development is complete.

Positive Signals

Full and open competition promotes a competitive bidding environment.
Award to a major defense contractor like BAE Systems suggests confidence in their technical expertise.
The contract supports critical advancements in defense mission systems.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for defense-related R&D is substantial, driven by the need for technological superiority. Comparable spending benchmarks are difficult to establish for unique R&D projects, but this award represents a focused investment in a critical area for the Department of Defense.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The impact on the small business ecosystem would depend on BAE Systems' subcontracting plans and adherence to any small business subcontracting goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures are embedded in the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is generally maintained through contract awards databases, though specific R&D progress reports may be sensitive.

Related Government Programs

Advanced Technology Development
Aerospace Research and Development
Defense Mission Systems
Systems Engineering
Research and Development Services

Risk Flags

Cost Overrun Risk (CPFF)
Uncertainty of R&D Outcomes
Long-term Commitment Flexibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC.. RESILIENT AND AGILE MISSION SYSTEMS

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $20.7 million.

What is the period of performance?

Start: 2021-04-23. End: 2028-12-31.

What is BAE Systems' track record with similar R&D contracts for the Department of Defense?

BAE Systems has a significant history of performing complex R&D and systems integration work for the Department of Defense across various branches, including the Air Force. They are known for their expertise in areas such as space systems, electronic warfare, and command and control. While specific details on past R&D contracts of identical scope are not provided here, their overall performance in delivering advanced technological solutions for defense applications is generally well-established. However, like any large contractor, past performance reviews and specific contract outcomes would need to be examined for a comprehensive assessment.

How does the $20.6 million award compare to typical R&D investments in resilient mission systems?

The $20.6 million award over approximately 7.7 years (from April 2021 to December 2028) translates to an average annual investment of roughly $2.67 million. This figure represents a moderate level of funding for a specialized R&D effort. The 'typical' investment can vary widely depending on the specific technological maturity, the complexity of the problem being solved, and the strategic importance of the mission systems. For cutting-edge research requiring significant scientific and engineering resources, this amount could be considered a focused investment. Larger, more ambitious R&D programs often see significantly higher funding levels, while smaller, more targeted research might receive less.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risk with a CPFF contract, especially for R&D, is the potential for cost escalation. While the contractor receives a fixed fee, the 'cost plus' portion means the government reimburses allowable costs. If the contractor's costs exceed initial estimates, the government pays more. This can happen due to unforeseen technical challenges, scope creep, or inefficient management. For R&D, where outcomes are uncertain, it's harder to accurately estimate costs upfront. This structure can incentivize contractors to incur costs without as much pressure to control them, as their fee is guaranteed. Robust oversight, clear milestones, and stringent cost accounting are crucial to mitigate these risks.

What are the expected outcomes or deliverables from this R&D contract?

The provided data does not specify the exact deliverables or expected outcomes for this R&D contract. Contracts for Research and Development in Physical, Engineering, and Life Sciences (NAICS 541715) typically aim to advance scientific knowledge, develop new technologies, or create prototypes. For 'Resilient and Agile Mission Systems,' potential outcomes could include the development of new hardware or software components, improved system architectures, enhanced cybersecurity features, or advanced operational concepts that allow mission systems to function effectively under degraded or contested conditions. Specific milestones and final reports would likely be detailed in the contract's statement of work.

How does the competition level (2 bidders) impact the value for taxpayers?

Having two bidders in a full and open competition generally indicates a reasonable level of market interest and competition. While more bidders could potentially drive prices lower, two offers are often sufficient to establish a competitive baseline, especially for highly specialized R&D requirements where the pool of capable contractors may be limited. This level of competition suggests that the government likely received offers that were considered fair and reasonable. It avoids the potential inefficiencies and higher costs associated with sole-source or limited competition scenarios, thus providing better value for taxpayers compared to those situations.

What is the significance of the 'definitive contract' type for this R&D effort?

A 'definitive contract' is a standard contract that contains all the terms and conditions agreed upon by the parties. For an R&D effort like this, it signifies a formal, legally binding agreement with a clearly defined scope, price (or pricing structure like CPFF), period of performance, and other contractual clauses. Unlike basic ordering agreements or other indefinite-delivery vehicles, a definitive contract usually represents the final, fully negotiated agreement for a specific project or set of tasks. This provides clarity and commitment for both the government and the contractor throughout the duration of the research and development activities.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA865020S1958

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1600 COMMERCE ST UNIT 1, BOULDER, CO, 80301

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: $91,020,870

Exercised Options: $91,020,870

Current Obligation: $20,681,811

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $724,031

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline