BAE Systems awarded $28M for Air Force R&D, facing limited competition

Contract Overview

Contract Amount: $28,056,805 ($28.1M)

Contractor: BAE Systems Space & Mission Systems Inc.

Awarding Agency: Department of Defense

Start Date: 2021-02-05

End Date: 2026-02-05

Contract Duration: 1,826 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESPONSIVE OPERATOR-INTERFACE DEVELOPMENT (ROID)

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $28.1 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC. for work described as: RESPONSIVE OPERATOR-INTERFACE DEVELOPMENT (ROID) Key points: 1. Contract value represents a significant investment in specialized R&D capabilities. 2. The limited competition suggests a niche market or specific technological requirements. 3. Performance period of five years indicates a long-term strategic need. 4. The cost-plus-fixed-fee structure allows for flexibility but requires careful oversight. 5. Focus on Research and Development in Physical, Engineering, and Life Sciences. 6. Geographic concentration in Colorado for contract performance.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specialized R&D nature and the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can lead to cost overruns if not managed tightly. Without comparable contracts for similar operator-interface development, assessing true value-for-money is difficult. The fixed fee component provides some cost certainty for the contractor, but the overall cost is variable.

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. However, the presence of only two bidders suggests that the market for this specific type of specialized R&D may be limited, or that only a few companies possess the requisite technical expertise and security clearances. This level of competition, while technically open, may not have driven the most aggressive pricing.

Taxpayer Impact: While the competition was technically open, the low number of bidders means taxpayers may not have benefited from the full price discovery that a more robust competitive environment could provide.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving advanced operator-interface development. This contract supports the advancement of physical, engineering, and life sciences research. Work is concentrated in Colorado, potentially impacting the local tech and research workforce. The development is expected to enhance operational capabilities for Air Force personnel. The research outcomes could have broader applications in defense technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize cost growth if not rigorously monitored.
Limited competition may result in less favorable pricing for the government.
The specialized nature of R&D makes performance metrics and success criteria potentially difficult to define and measure.

Positive Signals

Full and open competition was utilized, allowing for a broad range of potential bidders.
The five-year performance period suggests a sustained commitment to a critical capability.
BAE Systems is a well-established defense contractor with significant experience in complex systems.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for such specialized R&D is often characterized by a limited number of highly capable firms, government funding cycles, and long development timelines. Comparable spending benchmarks are difficult to establish without knowing the precise technological domain, but R&D contracts of this magnitude are typical for advanced defense applications.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While BAE Systems may engage small businesses as subcontractors, there is no explicit requirement or focus on small business set-asides within this specific award. This means the direct impact on the small business ecosystem for this particular contract is likely minimal, though subcontracting opportunities could exist.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Department of the Air Force contracting and program management offices. Key accountability measures will involve monitoring expenditures against the fixed fee, ensuring progress aligns with research milestones, and verifying the effective use of funds. Transparency is typically maintained through contract reporting requirements and potential reviews by the Government Accountability Office (GAO) or the Inspector General, depending on the nature of any reported issues.

Related Government Programs

Advanced Technology Development
Aerospace Research and Development
Defense Systems Engineering
Software Development Services
Command and Control Systems Research

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition Impact on Price
Defining R&D Success Metrics
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.1 million to BAE SYSTEMS SPACE & MISSION SYSTEMS INC.. RESPONSIVE OPERATOR-INTERFACE DEVELOPMENT (ROID)

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 $28.1 million.

What is the period of performance?

Start: 2021-02-05. End: 2026-02-05.

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

BAE Systems has a substantial track record with the Department of Defense, frequently securing large contracts across various domains including R&D, systems integration, and platform development. For R&D specifically, they are known for their work in areas like electronic warfare, cyber security, and advanced materials. Their history includes numerous cost-plus contracts, necessitating robust government oversight to manage costs and ensure deliverables meet evolving requirements. Analyzing their past performance on similar CPFF R&D awards would involve reviewing contract close-out data, any incurred cost overruns, and the successful delivery of research outcomes against initial objectives. Their extensive experience suggests a capacity to handle complex R&D projects, but also highlights the importance of diligent program management from the Air Force's perspective.

How does the $28 million contract value compare to typical R&D spending in this specific sub-sector?

The $28 million contract value for 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)' is a significant, but not extraordinary, amount for a five-year R&D effort within the defense sector. The specific NAICS code (541715) covers a broad range of scientific research and development services. To provide a precise comparison, one would need to identify the exact technological focus of the 'RESPONSIVE OPERATOR-INTERFACE DEVELOPMENT (ROID)'. However, defense R&D spending can range from millions to billions. This contract appears to be a mid-to-large size award for a specific, likely specialized, development project rather than a broad foundational research program. Annual R&D spending by the DoD is in the tens of billions, placing this contract within a typical allocation for a focused technological advancement.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, like this one for ROID, center on cost control and scope definition. For the government, the risk is that the 'cost plus' component can lead to higher-than-anticipated expenditures if the contractor's costs escalate beyond initial projections. Inadequate oversight or poorly defined requirements can incentivize inefficiencies or scope creep, driving up the total contract cost. For the contractor, the risk lies in accurately estimating the costs to achieve the fixed fee, especially in R&D where outcomes are uncertain. If costs exceed estimates significantly, the fixed fee may not provide adequate profit. Effective risk mitigation requires clear statement of work, robust cost tracking, regular performance reviews, and strong program management to ensure the R&D objectives are met efficiently and within reasonable cost parameters.

How might the 'limited competition' (2 bidders) impact the long-term effectiveness of this technology?

The 'limited competition' aspect, with only two bidders for this R&D contract, could have implications for long-term technological effectiveness. While BAE Systems is a capable contractor, a lack of broader competition might mean that alternative innovative approaches or more cost-effective solutions were not explored or presented. In R&D, diverse perspectives can often lead to breakthroughs. If the chosen technology requires future iterations or upgrades, the initial limited competition might set a precedent that restricts future competitive opportunities, potentially leading to vendor lock-in or slower adoption of next-generation solutions. Conversely, a focused relationship with a capable provider could ensure continuity and deep understanding of the system's evolution, provided the government maintains strong oversight and encourages innovation within the existing framework.

What are the potential performance metrics or milestones for 'RESPONSIVE OPERATOR-INTERFACE DEVELOPMENT (ROID)'?

Performance metrics and milestones for 'RESPONSIVE OPERATOR-INTERFACE DEVELOPMENT (ROID)' would likely focus on the successful design, development, testing, and integration of the operator interface. Key performance indicators (KPIs) could include metrics related to user response times, system stability, ease of use (measured through user testing and feedback), adherence to security protocols, and successful integration with existing or planned Air Force systems. Milestones might involve phased deliverables such as preliminary design reviews, critical design reviews, prototype demonstrations, alpha/beta testing phases, and final acceptance testing. The 'responsiveness' aspect suggests metrics around latency, throughput, and the interface's ability to adapt to varying operational demands or data loads. Success would be measured by the interface's ability to enhance operator efficiency, reduce errors, and improve situational awareness.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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

Financial Breakdown

Contract Ceiling: $28,057,769

Exercised Options: $28,057,769

Current Obligation: $28,056,805

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $2,490,589

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865020D6203

IDV Type: IDC

Timeline