BAE Systems awarded $45.3M for engineering support of air traffic control and landing systems

Contract Overview

Contract Amount: $45,271,502 ($45.3M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2008-05-01

End Date: 2025-04-30

Contract Duration: 6,208 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING &TECHNICAL SERVICES IN SUPPORT OF AIR TRAFFIC CONTROL & LANDING SYS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $45.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ENGINEERING &TECHNICAL SERVICES IN SUPPORT OF AIR TRAFFIC CONTROL & LANDING SYS Key points: 1. Contract value represents a significant investment in critical defense infrastructure. 2. BAE Systems is a major defense contractor, indicating established capabilities. 3. The contract duration suggests a long-term need for these specialized services. 4. Cost-plus fixed-fee structure may incentivize cost management by the contractor. 5. The 'Engineering Services' NAICS code points to a highly specialized technical domain. 6. Delivery order under a larger contract indicates a phased approach to procurement.

Value Assessment

Rating: good

The contract value of $45.3 million over its period of performance appears reasonable for specialized engineering services supporting complex defense systems. Benchmarking against similar contracts for air traffic control and landing system support is challenging without more specific service details. However, the cost-plus fixed-fee (CPFF) pricing structure, while common for R&D and complex services, requires careful oversight to ensure cost efficiency. The duration of the contract (over 17 years) suggests a stable, long-term requirement, which can sometimes lead to better pricing through economies of scale or established relationships, but also carries the risk of cost escalation if not managed diligently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The fact that it is a single delivery order (no: 1) under a potentially larger contract vehicle implies that the initial competition was robust. The number of bidders is not specified, but full and open competition generally leads to a wider range of solutions and potentially more competitive pricing compared to limited or sole-source procurements. This approach allows the government to select the best value offering from the market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it fosters a competitive environment, driving down prices and encouraging innovation. This increases the likelihood that taxpayer funds are used efficiently to secure high-quality services.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who rely on safe and efficient air traffic control and landing systems. Services delivered include critical engineering and technical support for vital defense infrastructure. The geographic impact is likely concentrated within military installations and operational areas requiring these systems. Workforce implications include the employment of skilled engineers and technical specialists by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously monitored.
Long contract duration could lead to price creep if market conditions change significantly.
Reliance on a single contractor for critical systems engineering may pose long-term dependency risks.

Positive Signals

Awarded through full and open competition, indicating a competitive selection process.
BAE Systems is a large, established defense contractor with a proven track record.
The contract addresses a critical need for air traffic control and landing systems, ensuring operational readiness.
Long-term nature of the contract suggests stability and continuity of essential services.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Engineering services for critical systems like air traffic control and landing systems fall within this domain, requiring specialized expertise and adherence to stringent quality and safety standards. The market for such services is dominated by a few large, established contractors. Spending in this area is driven by national security requirements and the need to maintain and modernize aging infrastructure. Comparable spending benchmarks would typically be found within other large, complex defense system support contracts.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major defense contractor, the primary focus is likely on prime performance rather than direct small business set-asides. However, BAE Systems, like most large defense contractors, is expected to have subcontracting plans that may involve small businesses. The extent to which small businesses will participate as subcontractors is not detailed here but is a common practice in the defense industry to leverage specialized capabilities and meet socio-economic goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to monitor costs and prevent overruns. Transparency is typically managed through contract reporting requirements and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Air Traffic Control Systems Modernization
Defense Infrastructure Support
Naval Air Systems Command Contracts
Logistics and Technical Support Services

Risk Flags

Cost Overrun Risk (CPFF)
Long-Term Dependency
Contractor Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ENGINEERING &TECHNICAL SERVICES IN SUPPORT OF AIR TRAFFIC CONTROL & LANDING SYS

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $45.3 million.

What is the period of performance?

Start: 2008-05-01. End: 2025-04-30.

What is BAE Systems' track record with similar engineering support contracts for air traffic control systems?

BAE Systems has a substantial history of providing engineering and technical services to the Department of Defense and other government agencies, including those related to aviation and command and control systems. While specific details on their performance for air traffic control and landing systems under similar contracts require deeper investigation into past performance reports and contract databases, their position as a major defense contractor suggests a capacity to handle complex requirements. Their portfolio often includes systems integration, software development, and lifecycle support for critical defense platforms. Analyzing past contract awards, performance evaluations (e.g., CPARS), and any past disputes or corrective actions would provide a more definitive assessment of their track record in this specific niche.

How does the $45.3 million contract value compare to historical spending on air traffic control engineering support?

Comparing the $45.3 million contract value requires context regarding the scope and duration of services. This figure represents the total estimated cost and fee over the contract's life, which spans from May 1, 2008, to April 30, 2025 (over 17 years). Annualized spending would be approximately $2.66 million per year. To benchmark effectively, one would need to analyze historical spending trends for similar engineering and technical services supporting air traffic control and landing systems across the DoD or other federal agencies. Factors like inflation, technological advancements, and the specific systems being supported (e.g., radar, navigation aids, communication systems) significantly influence cost. Without access to a comprehensive database of comparable contracts, a precise value comparison is difficult, but the amount appears consistent with long-term, specialized support for critical defense infrastructure.

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

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is incentivized to control costs to protect their fixed fee, the government bears the risk of paying actual allowable costs incurred. If the contractor's costs exceed estimates, the government pays the actual costs plus the pre-determined fee. This structure requires robust government oversight to scrutinize allowable costs, ensure efficiency, and prevent scope creep that could inflate expenses. Another risk is that the contractor might prioritize profit (the fixed fee) over optimal performance if not carefully managed through performance metrics and incentives. Effective administration and auditing are crucial to mitigate these risks and ensure value for taxpayer money.

How effective are the current air traffic control and landing systems that this contract supports?

The effectiveness of the air traffic control and landing systems supported by this contract is directly tied to the quality and timeliness of the engineering and technical services provided by BAE Systems. These systems are critical for safe and efficient military aviation operations, impacting readiness and operational capability. While this contract focuses on the support services rather than the systems themselves, the long duration and full and open competition suggest a sustained and important requirement. Assessing system effectiveness would involve examining operational metrics such as system uptime, incident rates, modernization progress, and user feedback from military aviation commands. The continued funding and long-term nature of this support contract imply that the systems are considered essential and require ongoing technical expertise to maintain their operational status and potentially undergo upgrades.

What is the historical spending pattern for engineering support of air traffic control systems within the Department of Defense?

Historical spending patterns for engineering support of air traffic control systems within the Department of Defense (DoD) generally show a consistent and significant investment. These systems are fundamental to military operations, requiring continuous maintenance, upgrades, and modernization to keep pace with technological advancements and evolving threats. Spending is often distributed across various contracts, including those for system development, integration, sustainment, and specialized technical services like those provided by BAE Systems. The total DoD spending in this area can fluctuate based on major modernization programs, budget allocations, and geopolitical factors. Analyzing aggregated contract data over several fiscal years, categorized by relevant NAICS codes (like 541330 for Engineering Services) and defense agencies, would reveal trends in investment levels and the types of services procured.

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: N0002407R3517

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

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: $49,873,258

Exercised Options: $49,873,258

Current Obligation: $45,271,502

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4018

IDV Type: IDC

Timeline