DoD's $35.9M Engineering Services Contract with BAE Systems Faces Scrutiny for Value and Competition

Contract Overview

Contract Amount: $35,928,916 ($35.9M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2013-03-29

End Date: 2017-03-31

Contract Duration: 1,463 days

Daily Burn Rate: $24.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF IN-SERVICE ENGINEERING AND INTEGRATED LOGISTICS SUPPORT SERVICES

Place of Performance

Location: KEYPORT, KITSAP County, WASHINGTON, 98345

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $35.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IGF::OT::IGF IN-SERVICE ENGINEERING AND INTEGRATED LOGISTICS SUPPORT SERVICES Key points: 1. The contract awarded to BAE Systems for engineering and logistics support represents a significant investment in defense capabilities. 2. Competition for this contract was full and open, suggesting a potentially competitive bidding process. 3. However, the 'COST PLUS FIXED FEE' pricing structure warrants a closer look at cost control and potential for overruns. 4. The lack of small business participation is a notable aspect of this award.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed tightly, as the contractor is reimbursed for all allowable costs plus a fixed fee. Benchmarking against similar CPFF contracts for engineering services is crucial to assess if the $35.9M total value is reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the specific impact on price discovery for this particular contract requires further analysis of the bidding outcomes and the final negotiated price.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the CPFF structure necessitates robust oversight to ensure costs remain controlled and the final price reflects true value.

Public Impact

Taxpayers are funding critical engineering and logistics support for naval operations. The contract's duration and value suggest a long-term commitment to a specific contractor. The absence of small business involvement may limit opportunities for smaller, specialized firms in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee pricing structure
Lack of small business participation
Potential for cost overruns without strict oversight

Positive Signals

Awarded under full and open competition
Provides essential engineering and logistics support

Sector Analysis

This contract falls within the Engineering Services sector, which is vital for maintaining and developing complex defense systems. Spending benchmarks for similar large-scale engineering support contracts within the Department of Defense can vary significantly based on scope and duration.

Small Business Impact

The data indicates that this contract did not involve small businesses, as 'sb' is false. This suggests that the prime contractor, BAE Systems, likely handled the entire scope of work or subcontracted to other large businesses, missing opportunities to engage smaller, potentially more agile firms.

Oversight & Accountability

Robust oversight is critical for CPFF contracts to ensure costs are reasonable and allocable. The Department of the Navy must implement stringent monitoring mechanisms to track expenditures and verify the necessity of all costs incurred by BAE Systems.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee pricing can incentivize higher spending.
Lack of small business participation.
Potential for cost overruns.
Limited insight into specific performance metrics.
Need for detailed cost auditing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IGF::OT::IGF IN-SERVICE ENGINEERING AND INTEGRATED LOGISTICS SUPPORT SERVICES

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 $35.9 million.

What is the period of performance?

Start: 2013-03-29. End: 2017-03-31.

What was the final negotiated price and fee for this contract, and how does it compare to the initial bid estimates?

The provided data shows the total value at $35.9M, but does not detail the final negotiated price or fee breakdown. A thorough analysis would require examining the contract modifications and final payment records to compare against initial bid estimates and assess if the fixed fee remained appropriate throughout the contract's life.

What specific engineering and logistics services were provided, and were they delivered effectively within the contract's parameters?

The contract is for 'IN-SERVICE ENGINEERING AND INTEGRATED LOGISTICS SUPPORT SERVICES.' Effectiveness would be assessed through performance metrics, delivery schedules, and user feedback from the Department of the Navy. Without specific performance reports, it's difficult to definitively gauge the quality and timeliness of the services rendered.

Given the CPFF structure, what measures were in place to control costs and prevent scope creep?

For CPFF contracts, cost control relies heavily on the government's ability to audit contractor expenses and manage the scope of work. The Navy should have established clear milestones, regular reporting requirements, and a robust change control process to mitigate risks associated with cost overruns and uncontrolled scope expansion.

Industry Classification

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

Solicitation ID: N0002410R3336

Offers Received: 3

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: $72,749,178

Exercised Options: $48,968,717

Current Obligation: $35,928,916

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $3,871,420

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4018

IDV Type: IDC

Timeline