DoD awards BAE Systems $19.1M for engineering services, with a 4-year performance period

Contract Overview

Contract Amount: $19,143,771 ($19.1M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2020-09-18

End Date: 2024-09-30

Contract Duration: 1,473 days

Daily Burn Rate: $13.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CET 20-047, NEW TASK ORDER

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $19.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: CET 20-047, NEW TASK ORDER Key points: 1. Contract value represents a significant investment in specialized engineering capabilities. 2. Competition dynamics for this contract are assessed to understand pricing efficiency. 3. Risk indicators are evaluated based on contract type and contractor performance history. 4. Performance context is provided by comparing to similar engineering service contracts. 5. Sector positioning highlights the role of BAE Systems within the defense industrial base. 6. The contract's duration suggests a need for sustained engineering support. 7. The absence of small business set-asides is noted. 8. The contract type (Cost Plus Fixed Fee) warrants scrutiny for cost control.

Value Assessment

Rating: fair

The contract value of $19.1 million over approximately four years suggests a moderate annual spend for specialized engineering services. Benchmarking against similar engineering service contracts within the Department of Defense is crucial to determine if this represents fair value. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not managed diligently, as it incentivizes cost incurrence. Without detailed cost breakdowns or comparisons to industry standards for specific engineering tasks, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The specific number of bidders is not provided, but full and open competition generally fosters a more competitive environment, which can lead to better pricing and innovation. The agency's approach to competition is a positive indicator for price discovery, though the ultimate effectiveness depends on the number and capability of the participating firms.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at competitive prices. It ensures that the government explores a wide range of potential providers, preventing potential monopolies and encouraging cost-consciousness among bidders.

Public Impact

The primary beneficiaries are the Department of Defense agencies requiring specialized engineering expertise. Services delivered likely include design, development, testing, and integration of complex systems. The geographic impact is primarily centered around BAE Systems' operational locations and DoD facilities. Workforce implications include employment opportunities for engineers and technical specialists within BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type may lead to cost overruns if not closely monitored.
Limited transparency on the specific engineering tasks and their associated costs.
Potential for scope creep without rigorous change management processes.
Dependence on a single contractor for a significant duration could pose supply chain risks.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
BAE Systems is a large, established defense contractor with significant experience.
The contract duration indicates a stable, long-term need for these services.
The specific task order (CET 20-047) suggests a defined scope within a larger framework.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader defense industrial base. The market for specialized defense engineering is characterized by high barriers to entry due to technical expertise, security clearances, and established relationships. Spending in this area is driven by the need for advanced technological solutions and system sustainment. Comparable spending benchmarks would involve analyzing other large engineering service contracts awarded by the DoD for similar capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside. The prime contractor, BAE Systems, is a large corporation. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of a set-aside suggests that the primary focus was on obtaining the most capable provider through full and open competition, rather than specifically targeting small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Microelectronics Activity (DMEA) and potentially the relevant contracting officer's representative (COR). The CPFF contract type necessitates close monitoring of costs and performance to ensure value for money. Transparency is often limited in specific task orders, but overall contract spending and performance metrics are usually subject to agency reporting and potentially Inspector General reviews if performance issues or fraud are suspected.

Related Government Programs

Defense Engineering Services
Information and Electronic Systems Integration
Advanced Technology Development
Department of Defense Research and Development

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
Limited public detail on specific deliverables and performance metrics.
Contract duration of over four years necessitates ongoing performance monitoring.
Absence of explicit small business subcontracting goals requires verification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. CET 20-047, NEW TASK ORDER

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Microelectronics Activity).

What is the total obligated amount?

The obligated amount is $19.1 million.

What is the period of performance?

Start: 2020-09-18. End: 2024-09-30.

What is BAE Systems' track record with similar Cost Plus Fixed Fee (CPFF) contracts within the Department of Defense?

BAE Systems Information and Electronic Systems Integration Inc. has a substantial history of performing on CPFF contracts with the Department of Defense. These contracts often involve complex research, development, and integration projects where the final scope or cost is difficult to precisely define upfront. While CPFF contracts offer flexibility, they also require rigorous oversight to manage costs effectively. Historical data would need to be analyzed to assess BAE Systems' performance in terms of cost control, schedule adherence, and quality delivery on comparable CPFF awards. Agencies typically evaluate contractor past performance, including their management of CPFF awards, during the source selection process.

How does the $19.1 million contract value compare to other engineering service contracts awarded by the Defense Microelectronics Activity (DMEA)?

The $19.1 million value for this specific task order represents a significant, but not unprecedented, investment for specialized engineering services. To benchmark effectively, one would need to analyze the DMEA's historical contract awards for engineering services, particularly those with similar scope and duration. The Defense Microelectronics Activity often procures highly specialized technical support. Comparing this award to other task orders under the same basic contract (if applicable) or to similar sole-source or competitively awarded contracts for advanced engineering solutions would provide better context. Without access to DMEA's full contract database, a precise comparison is difficult, but this figure suggests a substantial project.

What are the primary risk indicators associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risk indicator for this CPFF contract is the potential for cost overruns. CPFF contracts reimburse the contractor for allowable costs plus a fixed fee, which can incentivize higher spending if not managed meticulously. Without strong oversight, there's a risk that costs could escalate beyond initial projections. Another risk is scope creep, where the project's objectives expand beyond the original agreement, leading to increased costs and extended timelines. Contractor performance and the agency's ability to effectively monitor expenditures and deliverables are critical mitigating factors. The fixed fee component aims to provide some cost certainty for the contractor's profit, but the overall cost to the government remains variable.

What is the expected program effectiveness or outcome of these engineering services for the DoD?

The expected program effectiveness hinges on the specific engineering tasks outlined in the task order (CET 20-047). Generally, engineering services procured by the Defense Microelectronics Activity aim to enhance the capabilities of defense systems, develop new technologies, or provide critical technical support for existing platforms. This could involve areas like microelectronics design, system integration, cybersecurity engineering, or advanced materials research. Successful outcomes would be measured by the timely delivery of high-quality engineering solutions that meet DoD requirements, improve system performance, reduce lifecycle costs, or provide a technological advantage. The effectiveness is directly tied to how well the engineering solutions address the DoD's strategic needs.

What are the historical spending patterns for engineering services procured by the Defense Microelectronics Activity (DMEA)?

Historical spending patterns for engineering services by the DMEA would likely show a consistent need for specialized technical expertise to support the development and sustainment of defense systems, particularly in areas related to microelectronics and advanced technologies. The DMEA often acts as a hub for acquiring cutting-edge solutions. Spending levels can fluctuate based on defense priorities, technological advancements, and specific program requirements. Analyzing past DMEA contracts would reveal trends in the types of engineering services sought, the average contract values, and the primary contractors engaged. This particular $19.1 million award suggests a significant, focused investment within a broader pattern of DMEA's procurement activities.

How does the 'FULL AND OPEN COMPETITION' designation impact the potential for cost savings and innovation?

The 'FULL AND OPEN COMPETITION' designation is a strong positive signal for both cost savings and innovation. It means that all responsible sources were permitted to submit a bid, leading to a wider pool of potential contractors. This increased competition typically drives down prices as contractors vie for the award. Furthermore, a diverse range of bidders can introduce novel approaches, technologies, and methodologies, fostering innovation. The government benefits by having access to a broader spectrum of solutions and potentially achieving better value for its investment compared to sole-source or limited competition scenarios.

Industry Classification

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

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

Solicitation ID: HQ072715R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,151,077

Exercised Options: $19,151,077

Current Obligation: $19,143,771

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ072716D0002

IDV Type: IDC

Timeline