DoD's $321M Advanced Technology Support Program contract for microelectronic solutions awarded to BAE Systems

Contract Overview

Contract Amount: $32,132,519 ($32.1M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-26

End Date: 2026-06-30

Contract Duration: 1,008 days

Daily Burn Rate: $31.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO ANALYZE, AND DEVELOP THE NEXT GENERATION SIGNALS INTELLIGENCE.

Place of Performance

Location: HUDSON, HILLSBOROUGH County, NEW HAMPSHIRE, 03051

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $32.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO ANALYZE, AND DEVELOP THE NEXT GENERATION SIGNALS INTELLIGENCE. Key points: 1. Contract focuses on critical next-generation signals intelligence capabilities. 2. BAE Systems, a major defense contractor, is the awardee. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. Performance period extends through June 2026, indicating a medium-term investment. 5. The contract is not set aside for small businesses, suggesting a focus on large prime contractors. 6. The specific NAICS code (541330) points to engineering services, a broad category.

Value Assessment

Rating: fair

The total contract value is substantial at over $321 million. Benchmarking this specific contract's value is challenging without more granular data on the 'microelectronic capability solutions' and 'signals intelligence' deliverables. However, given the Cost Plus Fixed Fee structure, there's an inherent risk of costs exceeding initial estimates if scope or complexity increases. The award to a large, established contractor like BAE Systems suggests a competitive process likely yielded a reasonable price for the expected services, but ongoing oversight is crucial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. This method generally promotes competitive pricing and allows the government to select the best value. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down costs through market forces and ensures the government receives competitive offers.

Public Impact

The primary beneficiaries are the Department of Defense and its intelligence agencies, which will receive advanced signals intelligence capabilities. The contract supports the development and analysis of next-generation microelectronic solutions crucial for national security. Geographic impact is likely concentrated around BAE Systems' facilities and DoD research centers, with potential for broader national security implications. Workforce implications include specialized engineering and technical roles within BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to prevent scope creep and manage costs effectively.
The broad nature of 'microelectronic capability solutions' could lead to undefined requirements and potential cost increases.
Reliance on a single large contractor, even with competition, can sometimes limit flexibility and innovation compared to a more diverse supplier base.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The contract addresses a critical national security need in signals intelligence and advanced microelectronics.
BAE Systems is a reputable contractor with significant experience in defense technology.

Sector Analysis

This contract falls within the broader defense technology and engineering services sector. The market for advanced microelectronics and signals intelligence is highly specialized, dominated by a few large defense contractors and niche technology firms. Spending in this area is driven by the need for technological superiority in national security. Comparable spending benchmarks would typically be found within other large DoD R&D and systems integration contracts.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific small business subcontracting goals explicitly stated in the provided data. The award to a large prime contractor like BAE Systems suggests that the primary focus is on leveraging established capabilities. However, BAE Systems may engage small businesses as subcontractors for specialized components or services, which would contribute to the small business ecosystem indirectly.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, specifically the Defense Microelectronics Activity. Given the Cost Plus Fixed Fee structure, rigorous financial and performance monitoring is essential. Transparency is typically managed through contract reporting requirements, though detailed public disclosure may be limited due to national security sensitivities. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Research Projects Agency (ARPA) Contracts
Defense Intelligence Agency (DIA) Contracts
National Security Agency (NSA) Contracts
Intelligence, Information and Communications Technology (IICT) Spending
Microelectronics Research and Development Programs

Risk Flags

Cost Plus Fixed Fee contract requires diligent oversight to manage potential cost overruns.
Scope definition for 'advanced microelectronic capability solutions' may present challenges.
Reliance on a single large contractor could limit market flexibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO ANALYZE, AND DEVELOP THE NEXT GENERATION SIGNALS INTELLIGENCE.

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 $32.1 million.

What is the period of performance?

Start: 2023-09-26. End: 2026-06-30.

What is the historical spending pattern for the Advanced Technology Support Program (ATSP)?

The provided data indicates a single award for the ATSP contract with a value of $321,325,190, covering a period from September 26, 2023, to June 30, 2026. Without access to historical contract databases or previous ATSP awards, it is difficult to establish a comprehensive spending pattern. However, this single award suggests a significant, multi-year investment in advanced technology support. Future analysis would require examining prior contract actions under this program or similar initiatives to identify trends in funding levels, contractor selection, and the evolution of technological requirements.

How does the Cost Plus Fixed Fee (CPFF) structure impact the risk profile of this contract?

The Cost Plus Fixed Fee (CPFF) contract structure means the contractor is reimbursed for all allowable costs plus a predetermined fixed fee representing profit. This structure shifts some cost risk to the government, as the final cost can exceed initial estimates if actual costs are higher than projected. For taxpayers, this necessitates robust government oversight to ensure costs are reasonable and allocable to the contract's objectives. While CPFF can be useful for research and development where costs are uncertain, it requires diligent management to prevent cost overruns and ensure value for money. The fixed fee provides the contractor with an incentive to control costs, but the primary risk mitigation lies in the government's ability to audit costs and manage the scope of work effectively.

What is BAE Systems' track record with similar Department of Defense contracts?

BAE Systems is a major global defense contractor with an extensive history of performing complex technology and engineering services for the Department of Defense (DoD). They have a well-established track record in areas such as electronic systems, intelligence, surveillance, and reconnaissance (ISR), and advanced manufacturing. While specific details on past performance for contracts precisely matching the 'microelectronic capability solutions' and 'signals intelligence' scope of this ATSP award are not provided, BAE Systems' overall profile suggests they possess the technical expertise and infrastructure to handle such requirements. Government contract databases and past performance reviews would offer more granular insights into their specific successes and challenges on comparable DoD programs.

Can the value of this contract be benchmarked against similar government procurements?

Benchmarking the $321 million value of the Advanced Technology Support Program (ATSP) contract requires comparing it to similar procurements for 'microelectronic capability solutions' and 'next-generation signals intelligence.' This is challenging due to the specialized nature of the services. However, we can infer context by considering the typical scale of R&D and advanced engineering services contracts awarded by the DoD, which often run into hundreds of millions of dollars over several years. The fact that it's a Cost Plus Fixed Fee award for advanced technology suggests a high degree of uncertainty in project costs, making direct price comparisons difficult. Value is assessed not just on price but on the technical capabilities delivered and the strategic importance of the intelligence gained.

What are the potential performance risks associated with this contract?

Potential performance risks include the inherent complexity of developing 'next-generation signals intelligence' and advanced microelectronic solutions. Technical challenges in innovation, integration, and achieving desired performance metrics are significant. The Cost Plus Fixed Fee (CPFF) structure, while allowing flexibility, can also introduce risks if not managed tightly; scope creep, cost overruns, and schedule delays are possible if requirements are not clearly defined and controlled. Furthermore, reliance on a single contractor, even one as capable as BAE Systems, can pose risks related to vendor lock-in or potential disruptions if the contractor faces internal issues. Ensuring clear communication, robust project management, and continuous government oversight are critical to mitigating these risks.

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: $44,557,111

Exercised Options: $44,557,111

Current Obligation: $32,132,519

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,960,934

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