DoD's $13M IT contract to BAE Systems for wired telecommunications services awarded via full and open competition

Contract Overview

Contract Amount: $12,956,553 ($13.0M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2008-09-24

End Date: 2011-09-29

Contract Duration: 1,100 days

Daily Burn Rate: $11.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IT SOLUTIONS SERVICES

Place of Performance

Location: CHARLOTTESVILLE, ALBEMARLE County, VIRGINIA, 22911

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $13.0 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IT SOLUTIONS SERVICES Key points: 1. The contract value of $12.96 million represents a significant investment in IT infrastructure. 2. BAE Systems, a major defense contractor, secured this award, indicating strong capabilities in the sector. 3. The 'full and open competition' award type suggests a competitive bidding process, potentially leading to better pricing. 4. The contract duration of approximately three years provides a stable period for service delivery. 5. The use of 'Time and Materials' pricing may introduce cost variability depending on actual effort expended. 6. The contract falls under the Wired Telecommunications Carriers NAICS code, specifying the nature of services.

Value Assessment

Rating: good

The contract value of $12.96 million for IT solutions services appears reasonable given the scope and duration. Benchmarking against similar large-scale telecommunications contracts within the Department of Defense is necessary for a definitive value assessment. However, the competitive award process suggests that pricing was scrutinized. The 'Time and Materials' pricing model, while flexible, warrants close monitoring to ensure costs remain aligned with expected service delivery and do not escalate beyond initial projections.

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 bids. The presence of two bids suggests a moderate level of competition for this specific requirement. While two bidders participated, a higher number would typically indicate more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down costs through multiple offers. Even with two bidders, the competition likely resulted in a more favorable price than a sole-source award.

Public Impact

The primary beneficiaries are the Department of Defense and its various components, which will receive enhanced wired telecommunications services. The services delivered are crucial for maintaining secure and reliable communication networks essential for military operations. The contract is geographically focused within Virginia, supporting DoD installations and personnel in that region. This contract supports a segment of the IT services workforce, likely including engineers, technicians, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Time and Materials' pricing structure can lead to cost overruns if not managed diligently.
The limited number of bidders (two) might indicate potential barriers to entry or a concentrated market for these specific services.
The contract's duration could lead to vendor lock-in if not carefully managed upon expiration.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential offerors.
BAE Systems is a well-established contractor with a significant presence in the defense sector, suggesting a lower risk of performance failure.
The contract supports critical IT infrastructure for the Department of Defense.

Sector Analysis

This contract falls within the IT solutions and services sector, specifically focusing on wired telecommunications infrastructure. The market for such services is substantial, driven by the ongoing need for robust and secure communication networks, particularly within government and defense. Comparable spending benchmarks would involve analyzing other large-scale telecommunications and network infrastructure contracts awarded by federal agencies, considering factors like service scope, duration, and technology involved.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, BAE Systems, is a large corporation, suggesting that subcontracting opportunities for small businesses may exist but are not guaranteed by the contract's structure. The impact on the small business ecosystem would depend on BAE Systems' subcontracting strategy and the availability of qualified small businesses for specific tasks within the contract's scope.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). Accountability measures are embedded within the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Information Technology Contracting Office
General Services Administration (GSA) IT Schedule Programs
Department of Defense Enterprise IT Services Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Limited competition (two bidders) may impact price discovery.
Vendor lock-in risk due to contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.0 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IT SOLUTIONS 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 (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $13.0 million.

What is the period of performance?

Start: 2008-09-24. End: 2011-09-29.

What is BAE Systems' track record with similar IT services contracts within the Department of Defense?

BAE Systems Technology Solutions & Services Inc. has a substantial track record with the Department of Defense, often securing large, complex IT and engineering services contracts. Their history includes numerous awards for network infrastructure, cybersecurity, and systems integration. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a generally positive performance history. However, a deeper dive into past performance reviews and any documented issues on prior DoD contracts would provide a more comprehensive understanding of their reliability and effectiveness in delivering similar services.

How does the per-unit cost of this contract compare to market rates for wired telecommunications services?

Determining a precise per-unit cost for this contract is challenging due to its 'Time and Materials' (T&M) pricing structure. T&M contracts bill for direct labor hours at specified hourly rates and for actual material costs. Therefore, the total cost is variable and depends on the actual effort expended and materials used. Benchmarking against market rates would require analyzing the specific hourly labor rates for different skill sets and the markup on materials, as well as comparing the overall contract value to similar T&M contracts for wired telecommunications services of comparable scope and duration within the federal government or commercial sectors. Without these granular details, a direct per-unit cost comparison is not feasible.

What are the primary risks associated with the 'Time and Materials' pricing model for this contract?

The primary risk associated with the 'Time and Materials' (T&M) pricing model is the potential for cost escalation if not managed effectively. Unlike fixed-price contracts, T&M contracts do not set a ceiling on the total cost, making it harder for the government to predict the final expenditure. This can lead to budget overruns if the contractor's labor hours are excessive or if material costs are higher than anticipated. To mitigate this risk, robust oversight, detailed tracking of labor hours and materials, and clear performance standards are crucial. The government must actively monitor the contractor's efficiency and ensure that the effort expended is reasonable and necessary for the services being delivered.

What is the significance of the NAICS code 517110 (Wired Telecommunications Carriers) in understanding the contract's scope?

The North American Industry Classification System (NAICS) code 517110, 'Wired Telecommunications Carriers,' is significant as it precisely defines the primary industry and type of services covered by this contract. This code encompasses establishments primarily engaged in operating and/or providing access to telecommunications networks, such as wireline and wireless voice and data communications, including internet access. For this contract, it indicates that the services procured likely involve the installation, maintenance, and operation of wired communication infrastructure, such as fiber optic networks, copper wiring, and related equipment, essential for transmitting voice, data, and video signals within the Department of Defense's operational environment.

How does the contract's duration of approximately three years (1100 days) impact its strategic value and potential for vendor lock-in?

A contract duration of approximately three years (1100 days) provides a significant period for the contractor to deliver services and for the agency to realize the benefits of the IT infrastructure. This duration offers stability and allows for the implementation of potentially complex projects without the constant disruption of frequent re-competition. Strategically, it enables the Defense Information Systems Agency (DISA) to plan its IT roadmap with a degree of certainty regarding this service component. However, a longer duration also increases the potential for vendor lock-in, where the agency becomes heavily reliant on the incumbent contractor, potentially making it difficult or costly to switch providers in the future. This necessitates careful contract management and planning for future procurements.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 2525 NETWORK PL, HERNDON, VA, 11

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

Financial Breakdown

Contract Ceiling: $12,956,553

Exercised Options: $12,956,553

Current Obligation: $12,956,553

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ07D0003

IDV Type: IDC

Timeline