DoD Awards BAE Systems $110M for C4I Solutions, Facing Potential Cost Overruns

Contract Overview

Contract Amount: $110,256,063 ($110.3M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-04

End Date: 2021-05-03

Contract Duration: 3,163 days

Daily Burn Rate: $34.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EXCOMM - RESEARCH AND DEVELOPMENT, EVALUATION, ENGINEERING, INTEGRATION, TESTING, LOGISTICS, ALTERATION, INSTALLATION, TRAINING, AND HARDWARE SUPPORT SERVICES NECESSARY FOR THE SCR DIVISION TO PROVIDE NON-REPETITIVE, RAPID RESPONSE COMMAND, CONTROL, COMMUNICATIONS, COMPUTERS, AND INTELLIGENCE (C4I) SOLUTIONS TO CLOSE CRITICAL COMMUNICATION CAPABILITY GAPS.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $110.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: EXCOMM - RESEARCH AND DEVELOPMENT, EVALUATION, ENGINEERING, INTEGRATION, TESTING, LOGISTICS, ALTERATION, INSTALLATION, TRAINING, AND HARDWARE SUPPORT SERVICES NECESSARY FOR THE SCR DIVISION TO PROVIDE NON-REPETITIVE, RAPID RESPONSE COMMAND, CONTROL, COMMUNICATIONS, COMPUTERS, AND… Key points: 1. Significant contract value of $110.26 million for critical C4I solutions. 2. BAE Systems Technology Solutions & Services Inc. is the sole awardee. 3. Potential for cost overruns indicated by the high number of delivery orders. 4. The contract falls under Engineering Services within the Defense sector.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a high number of delivery orders (34858), suggests potential for cost escalation beyond the initial award. Benchmarking is difficult without specific task order details.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the high number of delivery orders may indicate a shift towards less competitive tasking over the contract's life.

Taxpayer Impact: Taxpayer funds are being used for critical defense communications infrastructure. While competition was initially broad, the execution phase's cost management will determine the ultimate taxpayer impact.

Public Impact

Enhances critical communication capabilities for the SCR Division. Supports rapid response C4I solutions, addressing capability gaps. Long contract duration (over 8 years) suggests sustained need for these services. Services include R&D, engineering, integration, testing, and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High number of delivery orders (34858) may indicate scope creep or inefficient tasking.
CPFF contract type can lead to cost overruns if not managed tightly.
No small business participation noted.

Positive Signals

Awarded under full and open competition.
Addresses critical communication capability gaps.
Long-term contract provides stable support.

Sector Analysis

This contract is within the Defense sector, specifically focusing on Engineering Services (NAICS 541330). Spending in this area is substantial, driven by the need for advanced C4I systems to maintain technological superiority.

Small Business Impact

The data indicates this contract was not awarded to small businesses (SB: false). There is no indication of small business subcontracting goals or participation within the provided details.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA). Oversight will be crucial to monitor costs, performance, and ensure the contractor meets the rapid response requirements effectively.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

High number of delivery orders.
Cost Plus Fixed Fee contract type.
No small business participation.
Long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. EXCOMM - RESEARCH AND DEVELOPMENT, EVALUATION, ENGINEERING, INTEGRATION, TESTING, LOGISTICS, ALTERATION, INSTALLATION, TRAINING, AND HARDWARE SUPPORT SERVICES NECESSARY FOR THE SCR DIVISION TO PROVIDE NON-REPETITIVE, RAPID RESPONSE COMMAND, CONTROL, COMMUNICATIONS, COMPUTERS, AND INTELLIGENCE (C4I) SOLUTIONS TO CLOSE CRITICAL COMMUNICATION CAPABILITY GAPS.

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 $110.3 million.

What is the period of performance?

Start: 2012-09-04. End: 2021-05-03.

What is the average cost per delivery order, and how does it compare to similar contracts?

With a total award of $110,256,062.61 and 34,858 delivery orders, the average cost per order is approximately $3,163. This appears low, suggesting many small, potentially routine tasks. However, without knowing the scope of each order, a direct comparison is difficult. Further analysis would require breaking down order values and comparing them to industry benchmarks for similar engineering and support services.

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

The primary risk of a CPFF contract is that the contractor is reimbursed for all allowable costs plus a fixed fee. If costs escalate unexpectedly due to unforeseen technical challenges or scope changes, the government bears the financial burden. This structure incentivizes cost control less than fixed-price contracts, requiring robust government oversight to prevent contractor inefficiencies from driving up the final price.

How effectively does this contract address the stated goal of closing critical communication capability gaps?

The contract's objective is to provide rapid response C4I solutions to close critical communication gaps, which is a vital mission. The long duration and broad scope (R&D, engineering, testing, etc.) suggest a comprehensive approach. However, the effectiveness hinges on the contractor's ability to deliver innovative and timely solutions, and the government's clear definition and validation of 'critical gaps' throughout the contract's lifecycle.

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: N0002411R3201

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

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: $118,218,557

Exercised Options: $118,218,557

Current Obligation: $110,256,063

Subaward Activity

Number of Subawards: 128

Total Subaward Amount: $9,687,022

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