DoD's $27.8M Engineering Services Contract Awarded to BAE Systems for Naval Support

Contract Overview

Contract Amount: $27,825,955 ($27.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2013-02-27

End Date: 2014-06-30

Contract Duration: 488 days

Daily Burn Rate: $57.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROFESSIONAL SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $27.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: PROFESSIONAL SERVICES Key points: 1. Contract value represents a significant investment in specialized engineering expertise for naval operations. 2. BAE Systems, a major defense contractor, secured this award, indicating strong capabilities in the sector. 3. The firm fixed-price structure suggests a defined scope and cost control measures were in place. 4. The contract duration of 488 days points to a substantial, multi-month project requirement. 5. Awarded under full and open competition, this contract likely benefited from competitive pricing. 6. The specific engineering services provided are crucial for maintaining and advancing naval technological capabilities.

Value Assessment

Rating: good

The contract value of approximately $27.8 million for engineering services appears reasonable given the duration and the nature of defense-related projects. Benchmarking against similar large-scale engineering support contracts for naval systems would provide a more precise value-for-money assessment. The firm fixed-price type suggests that the contractor assumed the cost risk, which can be advantageous for the government if managed effectively. However, without detailed task breakdowns and performance metrics, 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 had the opportunity to submit proposals. The presence of two bids suggests a competitive environment, which typically drives better pricing and service offerings for the government. The level of competition is a positive indicator for price discovery and ensuring that the selected contractor offers the best value proposition.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure engineering services at the most advantageous price point, reducing the risk of overpayment for critical naval support.

Public Impact

The Department of the Navy benefits from specialized engineering services essential for its operations. This contract supports the technological advancement and maintenance of naval assets. The primary beneficiaries are the naval forces relying on the engineering expertise for mission readiness. The contract likely supports a workforce of skilled engineers and technical professionals, primarily in Maryland. Geographic impact is concentrated in Maryland, where the contractor's operations are likely based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs despite firm fixed-price contract.
Dependence on a single contractor for critical engineering services could pose a risk if performance falters.
Ensuring adequate technical oversight to validate the quality and necessity of engineering tasks.
The long-term implications of this specific engineering solution on future naval technology upgrades.

Positive Signals

Awarded through full and open competition, suggesting a competitive and fair process.
Firm fixed-price contract type helps in cost control and predictability.
BAE Systems is a reputable defense contractor with a track record in complex engineering projects.
The contract addresses a clear need for specialized engineering services within the Department of Defense.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional services market supporting government and defense needs. The market for defense engineering services is substantial, driven by the continuous need for technological innovation, maintenance, and upgrades of complex military systems. Spending in this area is often characterized by long-term relationships, high barriers to entry due to specialized knowledge, and significant government oversight. Comparable spending benchmarks would involve analyzing other large engineering support contracts awarded by the Department of Defense or other federal agencies for similar naval or aerospace applications.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like BAE Systems suggests that the primary focus was on securing specialized capabilities, potentially limiting direct opportunities for small businesses unless they are part of the prime's supply chain. Further analysis would be needed to determine if subcontracting plans included provisions for small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to meet defined deliverables within budget. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Support Services
Professional Services Contracts
Defense Research and Development Support

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Quality assurance concerns if contractor prioritizes profit over performance.
Dependence on a single large contractor may limit future competition.
Need for robust government oversight to ensure technical adequacy.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. PROFESSIONAL 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 $27.8 million.

What is the period of performance?

Start: 2013-02-27. End: 2014-06-30.

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

BAE Systems is a major global defense contractor with extensive experience in providing engineering, technology, and support services to the Department of Defense and allied nations. They have a long history of managing complex programs across various military branches, including the Navy. Their portfolio includes work on naval platforms, combat systems, electronic warfare, and cyber solutions. While specific details of past performance on contracts identical in scope and value to this one would require deeper database analysis, BAE Systems' overall profile suggests a strong capability to handle large, technically demanding engineering projects. Their track record generally indicates a capacity for delivering on large-scale defense contracts, though like any large contractor, they may have faced performance challenges on specific projects that would be detailed in past performance reviews during the bidding process.

How does the $27.8 million value compare to similar engineering services contracts for naval support?

The $27.8 million contract value for engineering services, awarded over approximately 1.6 years (488 days), appears to be within a reasonable range for specialized support to naval systems. Large-scale engineering and technical support contracts for defense applications can range from tens of millions to billions of dollars, depending on the complexity, duration, and scope of services. For instance, contracts for ship design, systems integration, or lifecycle support for major naval platforms often exceed this value significantly. However, for specific, targeted engineering tasks such as system analysis, software development support, or specialized technical consulting, $27.8 million represents a substantial but not extraordinary investment. A precise comparison would necessitate benchmarking against contracts with similar service descriptions (e.g., NAICS code 541330 - Engineering Services) awarded by the Department of the Navy or other defense agencies within the last few years.

What are the primary risks associated with this firm fixed-price contract?

While a firm fixed-price (FFP) contract is designed to provide cost certainty for the government, risks can still emerge. One primary risk is that the contractor, BAE Systems, might cut corners on quality or scope to maximize profit if the initial cost estimate was too low or if unforeseen technical challenges arise. This could lead to suboptimal engineering solutions or reduced system performance. Another risk is scope creep; if the requirements are not clearly defined or if the government requests modifications, managing changes under an FFP contract can lead to disputes or require costly contract modifications. Furthermore, if the contractor lacks sufficient technical expertise or resources for certain aspects of the work, it could impact project timelines and deliverables, even within the fixed price. Effective government oversight is crucial to mitigate these risks by ensuring adherence to the SOW and quality standards.

How effective is full and open competition in ensuring value for taxpayer money in defense engineering contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in defense engineering contracts. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. Multiple bidders are incentivized to offer their best technical solutions and most competitive pricing to win the contract. This process enhances price discovery, allowing the government to ascertain a fair market price for the required services. Moreover, it provides a wider pool of potential contractors, increasing the likelihood of finding a firm with the specific expertise and capabilities needed, thereby improving the overall quality and effectiveness of the delivered services. While it requires more upfront effort in solicitation and evaluation, the long-term benefits in terms of cost savings and optimal performance typically outweigh these initial investments.

What is the historical spending trend for engineering services by the Department of the Navy?

Historical spending by the Department of the Navy (DoN) on engineering services has been substantial and generally increasing over the past decade, reflecting the ongoing need to modernize naval platforms, develop new technologies, and maintain complex existing systems. The DoN consistently ranks among the largest federal agencies for contracting engineering and technical services, often utilizing various contract types, including firm fixed-price and cost-plus arrangements, depending on the nature of the requirement. Spending is driven by major shipbuilding programs, research and development initiatives, cybersecurity enhancements, and sustainment efforts for aircraft, ships, and ground systems. Analyzing specific spending categories within engineering services, such as naval architecture, systems engineering, or software engineering, would reveal trends tied to strategic defense priorities and technological advancements. The data indicates a sustained demand for these critical services to ensure naval readiness and technological superiority.

What are the implications of awarding this contract to BAE Systems regarding market concentration in defense engineering?

The award of this $27.8 million engineering services contract to BAE Systems, a large and established defense contractor, contributes to the ongoing trend of market concentration within the defense industrial base. Major contractors like BAE Systems possess the scale, resources, and established relationships necessary to compete for and execute large, complex government contracts. While this ensures capability for critical defense needs, it can also raise concerns about reduced competition in the long run and potentially higher prices if market dominance increases. Smaller, specialized firms may find it challenging to break into the market or compete effectively against these industry giants. Therefore, while BAE Systems' selection indicates they met the requirements, it underscores the importance of monitoring market dynamics and fostering an environment where smaller innovative companies can also contribute to defense engineering efforts.

Industry Classification

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

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: M6785413Q0009

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,134,302

Exercised Options: $27,825,955

Current Obligation: $27,825,955

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS23F0005K

IDV Type: FSS

Timeline