BAE Systems awarded $13.3M for NUWC engineering services under full and open competition

Contract Overview

Contract Amount: $13,288,660 ($13.3M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2006-02-14

End Date: 2008-03-31

Contract Duration: 776 days

Daily Burn Rate: $17.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING, TECHNICAL & BUSINESS MANAGEMENT SERVICES FOR NUWC CODE 20

Place of Performance

Location: KEYPORT, KITSAP County, WASHINGTON, 98345

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $13.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ENGINEERING, TECHNICAL & BUSINESS MANAGEMENT SERVICES FOR NUWC CODE 20 Key points: 1. Contract awarded to a single, established vendor, indicating potential for strong performance but limited opportunity for new entrants. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost control by the contractor, but requires robust oversight to manage expenses. 3. Delivery Order structure suggests this is part of a larger, potentially indefinite-delivery/indefinite-quantity (IDIQ) contract, allowing for flexibility. 4. The duration of 776 days (approx. 2 years) provides a reasonable timeframe for project completion and service delivery. 5. The contract was awarded under full and open competition, suggesting a competitive process that should yield fair market pricing. 6. The specific NAICS code (541330) points to specialized engineering services, a critical component for naval technology development.

Value Assessment

Rating: good

The contract value of $13.3 million for approximately two years of engineering and technical services appears reasonable given the specialized nature of NUWC's work. Benchmarking against similar contracts for advanced engineering support within the Department of Defense would provide a more precise value assessment. The Cost Plus Fixed Fee (CPFF) contract type, while common for complex R&D, necessitates careful monitoring of costs to ensure value for money. Without specific performance metrics or comparison data, it's challenging to definitively assess cost-effectiveness, but the competitive award suggests a fair starting point.

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 offers. The fact that it resulted in a single delivery order suggests that BAE Systems was the selected contractor from a competitive pool. The level of competition is generally positive for price discovery, as multiple bidders would have vied for the work, theoretically driving down costs. However, the specific number of bidders is not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions. This approach ensures that the government is not limited to a single provider, maximizing the potential for cost savings and quality.

Public Impact

Naval Undersea Warfare Center (NUWC) benefits from specialized engineering and technical support, crucial for maintaining and advancing undersea warfare capabilities. Services delivered likely include design, development, testing, and analysis of complex naval systems and technologies. The geographic impact is primarily centered around NUWC facilities, likely in key naval technology hubs. Workforce implications include the employment of skilled engineers, technicians, and management professionals by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to prevent cost overruns and ensure adherence to the fixed fee.
Reliance on a single vendor for a significant duration could pose risks if performance issues arise or if market conditions change.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
BAE Systems is a large, established defense contractor with a track record in similar technical services.
The contract duration allows for focused effort and potential for building expertise within the contractor team.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for advanced technological development. The market for defense engineering services is substantial, driven by continuous modernization requirements and national security imperatives. Contracts like this are essential for maintaining the technological edge of naval forces. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Department of the Navy or other defense agencies for similar specialized R&D and technical services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major defense contractor, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation would depend on BAE Systems' subcontracting plan and the availability of qualified small businesses for specific components or services required under this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices at NUWC. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures against the estimated costs and ensure the fixed fee is justified. Transparency is typically managed through contract reporting requirements and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Research and Development Contracts
Engineering and Technical Support Services
Naval Warfare Technology Development

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight.
Potential for cost overruns if not managed effectively.
Reliance on a single vendor for a specific task.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ENGINEERING, TECHNICAL & BUSINESS MANAGEMENT SERVICES FOR NUWC CODE 20

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 Navy).

What is the total obligated amount?

The obligated amount is $13.3 million.

What is the period of performance?

Start: 2006-02-14. End: 2008-03-31.

What is BAE Systems' track record with the Department of Defense for similar engineering services?

BAE Systems Technology Solutions & Services Inc. is a subsidiary of BAE Systems, a major global defense contractor with extensive experience providing engineering, technical, and business management services to the Department of Defense and its various branches, including the Navy. They have a long history of supporting complex defense programs, including those related to naval systems, electronic warfare, and C4ISR. Their track record typically involves managing large, multi-year contracts, often under competitive bidding processes. While specific performance metrics for this particular $13.3 million contract are not detailed here, BAE Systems generally maintains a strong presence and reputation within the defense sector for delivering complex technical solutions. Historical data on contract awards and performance reviews, if publicly available, would offer deeper insights into their specific performance on similar engagements.

How does the $13.3 million value compare to other engineering services contracts for NUWC?

The $13.3 million value for this specific delivery order, awarded in 2006 and ending in 2008, represents a moderate investment for specialized engineering services at NUWC. NUWC, being a major research, development, test, and evaluation center for the Navy, often engages in contracts ranging from a few million to hundreds of millions of dollars for complex projects. This particular contract's value should be viewed in the context of its specific scope and duration (approx. 2 years). Larger, multi-year platform development or system integration contracts would naturally exceed this amount significantly. However, for focused engineering, technical, and business management support, $13.3 million is a substantial sum, suggesting a significant scope of work. A comprehensive comparison would require analyzing NUWC's contract spending over similar periods and for comparable service categories.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to BAE Systems, revolve around cost control and contractor incentive. For the government, the risk is that the contractor may not be sufficiently incentivized to control costs, as the fee is fixed regardless of the actual costs incurred (within reason, as costs must be allowable and allocable). This can lead to potential cost overruns if not managed diligently. The contractor bears the risk of cost overruns if actual costs exceed the estimated costs, as their profit is capped by the fixed fee. However, this can also incentivize them to be efficient. Effective risk mitigation requires robust government oversight, detailed cost accounting, clear definition of allowable costs, and regular performance reviews to ensure the contractor is operating efficiently and effectively within the contract's parameters.

How does the 'full and open competition' award impact taxpayer value?

Awarding a contract under 'full and open competition' generally enhances taxpayer value by fostering a competitive environment. This process allows any responsible source to submit an offer, encouraging multiple companies to bid and potentially driving down prices through market forces. It also promotes innovation as contractors strive to offer the most competitive technical solutions and pricing. For taxpayers, this means the government is more likely to secure services at a fair market price, reducing the risk of overpayment compared to sole-source or limited competition awards. While the specific number of bidders isn't detailed here, the principle of full and open competition is a cornerstone of efficient government procurement, aiming to achieve the best value for public funds.

What is the significance of the NAICS code 541330 (Engineering Services) in this context?

The North American Industry Classification System (NAICS) code 541330, 'Engineering Services,' signifies that the contract's primary purpose is to procure professional engineering expertise. This code encompasses a wide range of engineering disciplines, including civil, mechanical, electrical, and aerospace engineering, as well as specialized fields like naval architecture and systems engineering. For NUWC, which focuses on undersea warfare technology, this code indicates that the contract likely involves complex design, analysis, development, testing, and integration of sophisticated systems. It signals a need for highly skilled engineers capable of tackling challenging technical problems, contributing directly to national defense capabilities. The classification helps in benchmarking spending against similar services across the government and industry.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002405R3276

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,816,588,082

Exercised Options: $542,170,538

Current Obligation: $13,288,660

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4018

IDV Type: IDC

Timeline