Naval Sea Systems Command awards $19.3M contract for engineering services to BAE Systems, highlighting a cost-plus award fee structure

Contract Overview

Contract Amount: $19,269,872 ($19.3M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2001-08-10

End Date: 2003-03-31

Contract Duration: 598 days

Daily Burn Rate: $32.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200111!017149!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002401C5162 !A!N!*!Y!P00006 !20010810!20030930!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTGOMERY !MARYLAND !+000000414905!Y!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !541330!*!*!3! ! ! !*!*!*!B!*!*!B! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!* !A!A!N! ! ! ! ! ! !0001!

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200111!017149!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002401C5162 !A!N!*!Y!P00006 !20010810!20030930!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTG… Key points: 1. Contract awarded for specialized engineering and technical services, crucial for naval platform development and maintenance. 2. The cost-plus award fee structure incentivizes contractor performance while managing project costs. 3. Competition was full and open, suggesting a robust market for these specialized services. 4. The contract duration of approximately 20 months indicates a focused scope of work. 5. The geographic location of the contractor in Maryland may point to proximity to key naval facilities. 6. This award falls within the broader defense sector, supporting critical national security objectives.

Value Assessment

Rating: good

The total award amount of $19.3 million for engineering technical services over a period of roughly 20 months appears reasonable given the specialized nature of defense contracts. Benchmarking against similar contracts for engineering support within the Department of Defense would provide a more precise value assessment. The cost-plus award fee (CPAF) structure allows for flexibility and performance incentives, which can be effective in complex projects, but also requires diligent oversight to ensure cost control and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers. The specific number of bidders is not detailed, but the 'full and open' designation suggests a healthy competitive environment for these engineering services.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive marketplace where contractors vie for the contract based on both technical merit and cost.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, through the provision of essential engineering and technical support. Services delivered likely include design, development, testing, and sustainment engineering for naval systems. The geographic impact is concentrated around naval facilities and the contractor's operational base in Maryland. Workforce implications include employment for engineers, technicians, and support staff at BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if not closely monitored.
Dependence on a single contractor for critical engineering services could pose a risk if performance falters.
The specific technical scope and deliverables require clear definition to avoid scope creep and ensure alignment with naval needs.

Positive Signals

Awarding to a known entity like BAE Systems suggests a level of confidence in their capabilities and past performance.
Full and open competition indicates a healthy market and potential for innovation from multiple sources.
The use of an award fee structure can drive contractor performance and efficiency.

Sector Analysis

This contract falls within the Defense sector, specifically supporting naval engineering and technical services. The market for such specialized services is dominated by large defense contractors with established relationships and expertise. Spending in this category is driven by the need for advanced technological solutions and ongoing support for complex military platforms. Comparable spending benchmarks would typically be found within the broader DoD's research, development, testing, and evaluation (RDT&E) or operations and maintenance (O&M) budgets for shipbuilding and conversion.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting goals for small businesses. This suggests the primary award went to a large business, BAE Systems. While large prime contracts can sometimes trickle down opportunities to small businesses through subcontracting, the absence of specific set-aside or subcontracting requirements means the direct impact on the small business ecosystem for this particular award is likely limited unless BAE Systems voluntarily engages small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Sea Systems Command (NAVSEA) and potentially the Defense Contract Management Agency (DCMA). The Cost Plus Award Fee (CPAF) structure necessitates rigorous oversight to monitor costs, evaluate performance against defined criteria, and determine award fees. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Cost Plus Award Fee Contracts
Defense Contractor Support Services

Risk Flags

Cost Plus Award Fee (CPAF) structure requires diligent oversight to manage costs and ensure value.
Contract performance metrics and award criteria need clear definition and monitoring.
Potential for contractor focus on award fee maximization over pure cost efficiency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200111!017149!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002401C5162 !A!N!*!Y!P00006 !20010810!20030930!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTGOMERY !MARYLAND !+000000414905!Y!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !541330!*!*!3! ! ! !*!*!*!B!*!*!B!

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 $19.3 million.

What is the period of performance?

Start: 2001-08-10. End: 2003-03-31.

What is BAE Systems' track record with similar engineering services contracts for the Navy?

BAE Systems has a long and extensive history of providing a wide range of services to the U.S. Navy, including complex engineering, technical support, ship maintenance, and platform integration. They are a major defense contractor with numerous awards across various naval programs. Their track record typically involves managing large, complex projects and delivering technical solutions. Specific performance metrics and past award fee scores on similar contracts would provide a more granular assessment, but generally, they are considered a capable provider of these services. Historical data from contract databases and performance reviews (like Contractor Performance Assessment Reporting System - CPARS) would offer deeper insights into their reliability and quality of work on prior engagements.

How does the $19.3 million award compare to other engineering services contracts awarded by NAVSEA in the same period?

The $19.3 million award for engineering technical services represents a mid-tier value for a contract of this nature within the Department of Defense. NAVSEA frequently awards contracts ranging from a few million to hundreds of millions of dollars for various engineering and technical support functions. Contracts for specialized R&D, platform modernization, or sustainment engineering can often exceed this amount significantly. Conversely, smaller, more focused task orders or support services might be awarded for less. Without a direct comparison of contract scope, duration, and specific services rendered, it's challenging to definitively benchmark this award. However, it falls within a common range for significant, but not program-defining, engineering support efforts.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract structure for this type of service?

The primary risks with a CPAF structure revolve around cost control and the potential for contractor behavior driven by award fee targets. While CPAF incentivizes performance, it can also lead contractors to focus on activities that maximize their award fee, potentially at the expense of overall project efficiency or cost-effectiveness if not carefully managed. There's a risk of 'fee chasing' where the contractor prioritizes meeting subjective award criteria over more critical, but less fee-generating, tasks. Furthermore, the government must invest significant resources in robust oversight and performance evaluation to ensure fair and accurate fee determination. If the criteria are poorly defined or the oversight is lax, costs can escalate beyond initial projections without a commensurate increase in value.

What is the typical duration for engineering services contracts of this magnitude within the defense sector?

The typical duration for engineering services contracts of this magnitude within the defense sector can vary widely depending on the scope and nature of the services. Contracts like this one, with a duration of approximately 20 months (598 days), are common for projects with defined phases, specific development cycles, or focused technical support requirements. Longer-term contracts, often spanning several years, are more typical for sustainment, lifecycle support, or large-scale research and development programs. Shorter durations, under a year, might be used for specialized studies, rapid prototyping, or specific problem-solving tasks. The 20-month timeframe suggests a project with clear objectives and a defined endpoint for the contracted services.

How does the 'full and open competition' designation impact the potential for innovation and cost savings for taxpayers?

The 'full and open competition' designation is a cornerstone of federal procurement policy designed to maximize innovation and cost savings. By allowing all responsible sources to submit bids, the government broadens the pool of potential solutions and encourages companies to differentiate themselves through innovative approaches and competitive pricing. This process fosters a dynamic market where contractors are motivated to offer their best technologies and most efficient methods to win the contract. For taxpayers, this translates into potentially lower prices due to competitive pressure and access to cutting-edge solutions that might not emerge from a sole-source or limited competition environment. It also provides a mechanism for identifying emerging companies with novel capabilities.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 08

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline