BAE Systems awarded $360M for R&D in physical, engineering, and life sciences by DoD

Contract Overview

Contract Amount: $35,981,286 ($36.0M)

Contractor: BAE Systems Information and Electronic Systems Integration Inc.

Awarding Agency: Department of Defense

Start Date: 2007-04-25

End Date: 2015-12-31

Contract Duration: 3,172 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES

Place of Performance

Location: HONOLULU, HONOLULU County, HAWAII, 96813

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $36.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES Key points: 1. Contract value represents significant investment in advanced research capabilities. 2. Full and open competition suggests a robust bidding process. 3. Long contract duration (2007-2015) indicates a sustained need for these R&D services. 4. Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost control while ensuring contractor profit. 5. The contract's focus on R&D aligns with national security and technological advancement priorities. 6. The awardee, BAE Systems, is a major defense contractor with extensive R&D experience.

Value Assessment

Rating: good

The total award of $359.8 million over approximately 8 years for R&D services is substantial. Benchmarking this against similar large-scale R&D contracts is challenging without more specific service details. However, the CPFF structure, while common for R&D, requires careful oversight to ensure value for money. The number of bids (2) suggests moderate competition for this specific award.

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. With two bids received, the competition level was moderate. While more bidders could potentially drive prices lower, two bids still provide a basis for price comparison and evaluation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions.

Public Impact

The primary beneficiaries are the Department of Defense and potentially national security through advancements in physical, engineering, and life sciences. Services delivered include research and development activities aimed at creating new technologies or improving existing ones. The geographic impact is likely concentrated around BAE Systems' research facilities, with potential for broader application across military operations. Workforce implications include employment for scientists, engineers, and support staff involved in R&D projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
Limited visibility into the specific R&D projects and their direct impact without further reporting.
The relatively low number of bids (2) could indicate barriers to entry or a specialized market.

Positive Signals

Awarded through full and open competition, suggesting a fair and accessible process.
Long-term contract duration implies a consistent need and successful performance history.
The contractor, BAE Systems, is a reputable entity with significant experience in defense R&D.

Sector Analysis

This contract falls within the broader Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is critical for technological innovation and national defense. Spending in this area is often characterized by long project timelines, high upfront investment, and significant potential for groundbreaking discoveries. Comparable spending benchmarks would typically be found within other large government R&D procurements across various agencies.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of large-scale R&D and the prime contractor's size, subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on the extent to which BAE Systems engages them for specialized services or components.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of Defense) and potentially the Defense Contract Management Agency (DCMA). Accountability measures would be tied to the CPFF contract terms, requiring detailed reporting on research progress and expenditures. Transparency is often limited for specific R&D projects due to national security or proprietary concerns, but overall spending and contract performance are subject to federal oversight.

Related Government Programs

Department of Defense Research and Development
Advanced Technology Development Contracts
Engineering Services Contracts
Life Sciences Research Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition (2 Bidders)
Long Contract Duration (Potential for Scope Creep/Relevance Drift)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.0 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $36.0 million.

What is the period of performance?

Start: 2007-04-25. End: 2015-12-31.

What specific areas within physical, engineering, and life sciences did BAE Systems focus on under this contract?

The provided data indicates the contract broadly covers 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS code 541710). However, it does not specify the precise sub-disciplines or projects undertaken by BAE Systems. Typically, such broad R&D contracts with the Department of Defense could encompass areas like materials science, advanced manufacturing, robotics, artificial intelligence applications in engineering, biotechnology, medical research for soldiers, and environmental science relevant to military operations. Detailed project information would likely be found in contract modifications, technical reports, or agency-specific program documentation, which are not included here.

How does the Cost Plus Fixed Fee (CPFF) structure influence cost control and contractor incentives for this R&D contract?

The Cost Plus Fixed Fee (CPFF) structure is common for research and development contracts where the scope of work can be uncertain and costs difficult to predict precisely. Under CPFF, the contractor is reimbursed for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to complete the work efficiently to maximize their profit margin, as the fee is fixed regardless of the final cost. However, it also places a significant burden on the government to meticulously audit and approve all incurred costs to prevent overspending. Effective oversight is crucial to ensure that costs are reasonable and allocable to the contract objectives, mitigating the risk of cost escalation.

What is the significance of the contract duration (3172 days) in the context of R&D spending?

A duration of 3172 days, approximately 8.7 years, for an R&D contract signifies a long-term commitment by the Department of Defense to a particular research objective or a series of related research efforts. Such extended periods are characteristic of R&D because scientific discovery and technological development are often iterative, complex, and require sustained investment. This duration suggests that the work undertaken was likely foundational, exploratory, or aimed at developing mature technologies over a significant timeframe, rather than short-term, task-specific projects. It also implies a stable funding stream and a strategic focus on the R&D areas covered by the contract.

Given only two bids were received, what are the potential implications for innovation and price discovery?

Receiving only two bids in a full and open competition can have several implications. On one hand, it might suggest a highly specialized field where only a few entities possess the necessary expertise and resources, potentially limiting the range of innovative approaches. On the other hand, two bidders still provide a competitive dynamic, allowing for price comparison and evaluation. However, a lower number of bidders generally reduces the pressure on pricing compared to a scenario with numerous competitors. For taxpayers, this could mean potentially higher costs than if more companies vied for the contract. It also raises questions about potential barriers to entry for other capable firms.

How does BAE Systems' track record in defense R&D inform the assessment of this contract's value?

BAE Systems is a globally recognized defense contractor with a substantial and long-standing presence in research and development across various defense domains. Their extensive experience in delivering complex technological solutions for military applications suggests a high level of technical capability and program management expertise. This track record generally supports the expectation that they can successfully execute the R&D objectives outlined in the contract. For this specific $360 million award, their established reputation likely contributed to the government's confidence in awarding the contract, although rigorous oversight of costs and deliverables remains essential to ensure optimal value, irrespective of the contractor's standing.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 999 BISHOP ST STE 2700, HONOLULU, HI, 96813

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,203,732

Exercised Options: $36,337,326

Current Obligation: $35,981,286

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline