DoD's $16.6M Engineering Services Contract Awarded to BAE Systems Faces Scrutiny Over Competition and Value

Contract Overview

Contract Amount: $16,570,698 ($16.6M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2008-03-26

End Date: 2024-01-26

Contract Duration: 5,784 days

Daily Burn Rate: $2.9K/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: HAUPPAUGE, SUFFOLK County, NEW YORK, 11788

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $16.6 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ENGINEERING, TECHNICAL & BUSINESS MANAGEMENT SERVICES FOR NUWC CODE 20 Key points: 1. The contract, valued at $16.6 million, is for engineering, technical, and business management services. 2. BAE Systems Technology Solutions & Services Inc. is the sole awardee, raising questions about competition. 3. The contract duration is 5784 days, spanning over 15 years, which is unusually long. 4. The sector is Defense, specifically engineering services, with a significant but not unprecedented spend. 5. The award method is a delivery order under a larger contract, potentially limiting initial price discovery.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type can lead to cost overruns if not managed tightly. Without a clear benchmark for similar long-term engineering services, assessing the value is difficult, especially given the extended duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While the initial award was under full and open competition, the issuance of a delivery order to a single entity suggests a lack of ongoing competitive pressure for this specific task order. This could impact price discovery and potentially lead to higher costs.

Taxpayer Impact: The long duration and cost-plus nature of the contract warrant close monitoring to ensure taxpayer funds are used efficiently and effectively over the contract's lifespan.

Public Impact

Long-term contracts can lock in pricing, potentially missing out on market reductions. The extended period raises concerns about adaptability to evolving technological needs. Lack of transparency in ongoing task order competition can obscure true cost-effectiveness for taxpayers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (15+ years)
Cost-plus contract type
Single awardee for delivery order
Lack of clear performance metrics for value assessment

Positive Signals

Services are critical for Naval Undersea Warfare Center (NUWC) operations
BAE Systems is a known defense contractor with relevant expertise

Sector Analysis

This contract falls within the Defense sector, specifically for engineering and technical services supporting naval operations. Spending benchmarks for similar long-term, specialized engineering support contracts can vary widely based on scope and duration, but a 15-year term is notably long.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). There is no information provided on subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The long duration and cost-plus nature necessitate robust oversight from the Defense Contract Management Agency (DCMA) to ensure compliance, control costs, and verify performance against requirements. Regular reviews and audits are crucial.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Extended contract duration (over 15 years)
Cost-plus contract type increases cost risk
Single awardee for a long-term delivery order limits competition
Lack of transparency on performance metrics and value assessment
Potential for contractor lock-in and reduced flexibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.6 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $16.6 million.

What is the period of performance?

Start: 2008-03-26. End: 2024-01-26.

How does the fixed fee component of this Cost Plus Fixed Fee contract ensure value for money given the 15+ year duration and potential for evolving requirements?

The fixed fee in a CPFF contract is determined at the outset and remains constant regardless of the final cost. While it provides the contractor with a guaranteed profit margin, its effectiveness in ensuring value over a long period depends heavily on the initial negotiation's accuracy and the agency's ability to manage scope creep and ensure efficient performance. Without detailed insight into the fee structure and performance metrics, it's difficult to ascertain if it adequately incentivizes cost control and value delivery over such an extended timeframe.

What are the primary risks associated with awarding a single delivery order for such a long duration, and how are they mitigated?

The primary risks include potential cost overruns due to the Cost Plus Fixed Fee structure, lack of competitive pressure leading to inflated prices, and the possibility of the contractor becoming entrenched, making future transitions difficult. Mitigation strategies typically involve stringent oversight, regular performance reviews, clear scope definition, and potentially incorporating mechanisms for re-negotiation or competitive tasking if feasible within the contract framework.

How effective is the 'full and open competition' classification when the award is a single delivery order for a prolonged period?

While the overarching contract may have been awarded under full and open competition, a single, long-duration delivery order can limit the practical application of competitive principles for the specific services rendered. This approach might be justified if the services are highly specialized or require a long-term, stable relationship. However, it raises concerns about whether subsequent taskings within this order were truly optimized for price and performance compared to potentially re-competing the work.

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: N0002408R3164

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

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: $43,690,578

Exercised Options: $26,242,133

Current Obligation: $16,570,698

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4018

IDV Type: IDC

Timeline