DoD's $1.7B IT contract for systems engineering and data processing awarded to BAE Systems

Contract Overview

Contract Amount: $17,157,576 ($17.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2025-07-14

End Date: 2030-09-13

Contract Duration: 1,887 days

Daily Burn Rate: $9.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SYSTEMS ENGINEERING AND EVALUATION, SYSTEMS ANALYSIS WORLDWIDE. PROVIDE DATA AND INFORMATION PROCESSING CAPABILITIES FOR SUPPORT OF AFRL, DIA, ACC AND OTHER DOD AND IC CUSTOMERS.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $17.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: SYSTEMS ENGINEERING AND EVALUATION, SYSTEMS ANALYSIS WORLDWIDE. PROVIDE DATA AND INFORMATION PROCESSING CAPABILITIES FOR SUPPORT OF AFRL, DIA, ACC AND OTHER DOD AND IC CUSTOMERS. Key points: 1. Contract provides critical data and information processing capabilities for multiple defense and intelligence agencies. 2. BAE Systems, a major defense contractor, secured this significant award. 3. The contract's duration of nearly five years suggests a long-term need for these services. 4. Performance-based contract type indicates a focus on achieving specific outcomes. 5. The award is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, suggesting potential for future task orders. 6. The contract is not set aside for small businesses, indicating a focus on large prime contractors.

Value Assessment

Rating: good

The contract's value of $1.7 billion over approximately five years represents a substantial investment in IT and systems engineering support. Benchmarking this against similar large-scale IT service contracts within the Department of Defense is challenging without more granular data on specific services rendered. However, the Cost Plus Fixed Fee (CPFF) pricing structure suggests that while costs are tracked, the fixed fee provides a degree of predictability for the contractor's profit. The value appears aligned with the complexity and scope of providing data and information processing for multiple high-level defense and intelligence agencies.

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 specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, which can lead to better pricing and innovation. The fact that it was competed broadly suggests that the government sought the best possible solution and value from the market.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the pool of potential offerors, driving down prices through market forces and increasing the likelihood of securing high-quality services at a competitive cost.

Public Impact

The primary beneficiaries are the Air Force Research Laboratory (AFRL), Defense Intelligence Agency (DIA), and Air Combat Command (ACC), along with other Department of Defense (DoD) and Intelligence Community (IC) customers. The contract delivers essential data and information processing capabilities, crucial for intelligence analysis, research, and operational support. Services are likely to have a nationwide impact, supporting critical national security functions. The contract supports a workforce skilled in systems engineering, data analysis, and information technology within BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not closely monitored, as the contractor is reimbursed for allowable costs plus a fixed fee.
The long duration of the contract (nearly 5 years) necessitates robust oversight to ensure continued relevance and performance.
Lack of specific details on the number of bidders in the full and open competition makes it difficult to fully assess the intensity of price discovery.
The broad scope of services (systems engineering, data processing) could lead to scope creep if not managed meticulously.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process that likely yielded favorable terms.
The contract supports critical national security missions for key defense and intelligence agencies.
BAE Systems is a well-established defense contractor with a significant track record, implying a level of reliability.
The contract is a delivery order under an IDIQ, which allows for flexibility and task-specific ordering, potentially optimizing resource allocation.

Sector Analysis

This contract falls within the Information Technology (IT) and professional services sector, specifically focusing on computer systems design and related services. The market for IT support and systems engineering within the federal government is substantial, with agencies heavily reliant on contractors for specialized expertise. This contract represents a significant portion of spending within this niche, supporting complex data processing and analytical needs for defense and intelligence operations. Comparable spending benchmarks would typically involve other large IDIQ vehicles or prime contracts for similar IT and engineering support services to DoD and IC agencies.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'ss' field being false. This means the primary award went to a large business prime contractor, BAE Systems. While there is no explicit small business set-aside, large prime contractors are often required to subcontract a portion of the work to small businesses as part of their overall subcontracting plan. The extent to which small businesses will benefit will depend on BAE Systems' subcontracting strategy and adherence to federal small business goals.

Oversight & Accountability

Oversight for this contract will primarily reside with the contracting officers and program managers within the Department of the Air Force, overseeing the performance for AFRL, DIA, ACC, and other DoD/IC customers. The Cost Plus Fixed Fee (CPFF) structure necessitates diligent financial oversight to ensure allowable costs are properly documented and reimbursed. Performance metrics and deliverables outlined in the contract will be monitored to ensure service quality and timeliness. Transparency is facilitated through contract award databases and reporting requirements, though specific internal oversight mechanisms are not detailed here.

Related Government Programs

Defense Intelligence Agency (DIA) IT Support Contracts
Air Force Research Laboratory (AFRL) Research and Development Support
Air Combat Command (ACC) Systems Engineering Services
Intelligence Community Information Technology Enterprise (IC ITE)
Department of Defense IT Modernization Programs

Risk Flags

Cost Overrun Risk (CPFF)
Scope Creep Potential
Long-Term Contract Management
Dependency on Single Large Prime Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. SYSTEMS ENGINEERING AND EVALUATION, SYSTEMS ANALYSIS WORLDWIDE. PROVIDE DATA AND INFORMATION PROCESSING CAPABILITIES FOR SUPPORT OF AFRL, DIA, ACC AND OTHER DOD AND IC CUSTOMERS.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES 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 $17.2 million.

What is the period of performance?

Start: 2025-07-14. End: 2030-09-13.

What is BAE Systems' track record with similar large-scale IT and systems engineering contracts for the DoD and IC?

BAE Systems Technology Solutions & Services Inc. has a substantial history of performing complex IT, systems engineering, and data processing services for various U.S. government agencies, including the Department of Defense (DoD) and Intelligence Community (IC). They are a major defense contractor with extensive experience in areas such as command and control systems, intelligence analysis support, and cybersecurity. Their past performance often includes large, multi-year contracts requiring sophisticated technical solutions and program management. While specific details of past performance on contracts of this exact scope and value are proprietary, BAE Systems' overall profile suggests they possess the necessary capabilities and experience to execute this contract successfully. Agencies often award contracts to incumbents or companies with proven success in similar environments due to the high stakes and complexity involved in national security IT services.

How does the $1.7 billion value compare to similar systems engineering and data processing contracts within the DoD?

The $1.7 billion value for this five-year contract (approximately $340 million per year) is significant but falls within the expected range for large-scale IT and systems engineering support services awarded by the Department of Defense (DoD) and Intelligence Community (IC). Major defense contractors frequently secure contracts in the hundreds of millions to billions of dollars for comprehensive support that includes systems design, integration, data management, and operational sustainment for critical defense platforms and intelligence systems. For instance, similar contracts supporting major commands like U.S. Cyber Command, Space Force, or large research laboratories often reach or exceed this valuation. The value reflects the complexity, duration, and the critical nature of the services provided to agencies like AFRL, DIA, and ACC, which require specialized expertise and robust data handling capabilities.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude ($1.7 billion) is the potential for cost overruns, as the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. While the fixed fee provides the contractor with a predictable profit margin, it can reduce the incentive to control costs rigorously compared to fixed-price contracts. Effective oversight by the government is crucial to scrutinize allowable costs, prevent inefficiencies, and ensure the contractor exercises sound financial management. Scope creep is another significant risk; if the requirements evolve without proper contract modifications and adjustments to the fee or ceiling, costs can escalate beyond initial projections. Ensuring clear definition of 'allowable costs' and robust reporting mechanisms are key mitigation strategies.

How does the 'full and open competition' award mechanism impact price discovery and overall value for taxpayers?

Awarding this $1.7 billion contract under 'full and open competition' is generally beneficial for taxpayers. This mechanism maximizes the number of potential bidders by allowing any responsible source to compete, thereby increasing market reach and fostering a more competitive environment. Increased competition typically drives down prices as contractors vie for the award, leading to better value for the government. It also encourages innovation as companies propose diverse solutions to meet the government's needs. While the specific number of bidders isn't stated, the principle of full and open competition suggests that the government sought the most advantageous offer through a broad solicitation, which should result in a more efficient use of taxpayer funds compared to sole-source or limited competition scenarios.

What are the implications of this contract being a 'delivery order' under an IDIQ contract?

This contract being a 'delivery order' under an Indefinite Delivery/Indefinite Quantity (IDIQ) contract signifies that it is one specific task order issued against a pre-established larger contract vehicle. IDIQs provide flexibility for agencies to procure services or supplies over a period, with specific quantities or delivery schedules defined by individual task orders. For taxpayers, this structure can offer advantages such as streamlined procurement processes for subsequent needs and potentially better pricing negotiated at the IDIQ level. However, it also means that the total spending under the IDIQ could exceed the $1.7 billion stated for this specific delivery order over its lifetime, depending on future task orders. Robust management of the IDIQ vehicle is essential to ensure continued value and control over total obligated funds.

What is the significance of the contract's duration (nearly 5 years) for service continuity and planning?

The contract's duration of approximately five years (1,887 days) is significant as it provides a substantial period of service continuity for critical functions like systems engineering and data processing for agencies such as AFRL, DIA, and ACC. This long-term commitment allows for deeper integration of services, facilitates long-range planning for both the government and the contractor, and enables the development of specialized expertise within the contractor's team. For taxpayers, a longer duration can sometimes lead to more stable pricing and reduced costs associated with frequent contract transitions, such as recompeting efforts or onboarding new vendors. It also suggests a recognized, ongoing need for these specific capabilities within the DoD and IC, underpinning strategic national security objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

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: $237,908,105

Exercised Options: $172,433,125

Current Obligation: $17,157,576

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $1,202,564

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 47QTCK18D0053

IDV Type: GWAC

Timeline