Naval Sea Systems Command awarded $49.2M contract for destroyer engineering services to BAE Systems Maritime Solutions

Contract Overview

Contract Amount: $49,197,976 ($49.2M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2003-08-01

End Date: 2008-07-15

Contract Duration: 1,810 days

Daily Burn Rate: $27.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200311!036075!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002403C2307 !A!N! !N! !20030801!20081231!080911274!098060218!175406842!N!SOUTHWEST MARINE INC !FOOT OF SAMPSON ST !SAN DIEGO !CA!92170!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000007667628!N!N!000037708983!1903!DESTROYERS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !A!Y!R!2!001!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92170, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $49.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: 200311!036075!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002403C2307 !A!N! !N! !20030801!20081231!080911274!098060218!175406842!N!SOUTHWEST MARINE INC !FOOT OF SAMPSON ST !SAN DIEGO !CA!92170!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000007667628!N!N!000037708983!1903!DESTROYE… Key points: 1. Contract value represents a significant investment in naval engineering capabilities. 2. Competition dynamics suggest a robust bidding process for specialized defense services. 3. Contract duration of 5 years indicates a long-term need for these services. 4. The award to a large corporation highlights the scale of defense contracting. 5. Engineering services are critical for maintaining and upgrading naval assets. 6. Geographic concentration in California points to regional defense industry strengths.

Value Assessment

Rating: good

The contract value of $49.2 million for engineering services related to destroyers appears reasonable given the duration and scope. Benchmarking against similar contracts for naval engineering support would provide a more precise value-for-money assessment. The Cost Plus Award Fee (CPAF) structure incentivizes performance, but requires careful monitoring to ensure costs remain controlled and value is maximized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable contractors were allowed to bid. The specific number of bidders is not detailed in the provided data, but the 'full and open' designation suggests a competitive environment. This approach is generally expected to yield fair market pricing and encourage innovation.

Taxpayer Impact: A full and open competition process is favorable for taxpayers as it promotes a competitive environment, which typically leads to better pricing and service quality, maximizing the value of public funds.

Public Impact

The U.S. Navy benefits from specialized engineering expertise to maintain and upgrade its destroyer fleet. This contract supports the operational readiness and technological advancement of critical naval assets. The geographic impact is concentrated in San Diego, California, supporting the regional defense industrial base. Workforce implications include employment for engineers, technicians, and support staff within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in Cost Plus Award Fee contracts if not managed diligently.
Reliance on a single large contractor could limit future competition or flexibility.
The long contract duration might not adapt quickly to evolving technological requirements.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The CPAF structure provides incentives for high performance and cost efficiency.
The contract supports critical naval assets, ensuring national security capabilities.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for specialized technical support for naval vessels. The market for defense engineering services is substantial, driven by the continuous need to maintain, modernize, and upgrade complex military platforms like destroyers. Comparable spending benchmarks would involve analyzing other contracts for similar engineering support for naval shipbuilding and maintenance.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large corporation. While this specific contract may not directly benefit small businesses through a set-aside, large prime contractors often engage small businesses as subcontractors. Further analysis would be needed to determine the extent of small business subcontracting opportunities generated by this award and its impact on the broader small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Naval Sea Systems Command (NAVSEA) through contract officers and program managers. Accountability measures are built into the Cost Plus Award Fee structure, which includes performance metrics and award fees tied to achieving specific objectives. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details may be sensitive.

Related Government Programs

Naval Ship Maintenance Contracts
Defense Engineering Services
Destroyer Modernization Programs
Naval Vessel Support Services

Risk Flags

Cost Overrun Potential
Performance Monitoring Complexity
Long-Term Contract Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. 200311!036075!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002403C2307 !A!N! !N! !20030801!20081231!080911274!098060218!175406842!N!SOUTHWEST MARINE INC !FOOT OF SAMPSON ST !SAN DIEGO !CA!92170!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000007667628!N!N!000037708983!1903!DESTROYERS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !A!Y!R!2!001!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO 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 $49.2 million.

What is the period of performance?

Start: 2003-08-01. End: 2008-07-15.

What is the track record of BAE Systems Maritime Solutions in delivering similar engineering services for naval vessels?

BAE Systems Maritime Solutions, as part of the larger BAE Systems conglomerate, has a substantial track record in supporting naval programs. They are known for shipbuilding, repair, and complex systems integration for various naval platforms, including destroyers. Their experience often encompasses design, engineering, maintenance, and modernization efforts. Specific performance metrics for past contracts would require deeper data dives, but their established presence in the defense sector suggests a capacity to handle large-scale naval engineering requirements. Past performance evaluations, often available through government contract databases or agency reports, would provide more granular insights into their reliability, quality of work, and adherence to schedules and budgets on similar projects.

How does the awarded amount compare to the estimated cost or budget for this type of engineering support?

The awarded amount of $49.2 million for engineering services over approximately five years needs to be contextualized against the specific scope of work and the complexity of the destroyers being supported. Without access to the initial cost estimates or the government's budget allocation for this requirement, a direct comparison is challenging. However, the 'Cost Plus Award Fee' (CPAF) contract type suggests that the final cost could vary based on performance. If the contract was awarded under full and open competition, the awarded price is likely competitive. Benchmarking against historical spending on similar destroyer classes or engineering support contracts from the Department of the Navy would provide a better understanding of whether this award represents a fair market price or indicates potential overspending.

What are the primary risks associated with this Cost Plus Award Fee (CPAF) contract structure?

The primary risk with a CPAF contract is the potential for cost growth if the award fee criteria are not tightly managed or if the contractor's costs escalate beyond initial projections. While CPAF aims to incentivize performance by linking a portion of the profit to achieving specific metrics, it can sometimes lead to contractors focusing on meeting award fee targets rather than strictly controlling costs. For the government, this means diligent oversight is crucial to ensure that the award fees are justified and that the overall cost remains reasonable. There's also a risk that the contractor might incur costs that are not directly related to the core mission if the contract language is not precise. Effective administration by the contracting officer is key to mitigating these risks.

What is the expected impact of this contract on the operational readiness of the U.S. Navy's destroyer fleet?

This contract is expected to have a positive impact on the operational readiness of the U.S. Navy's destroyer fleet by ensuring that these critical platforms receive necessary engineering support. This support likely includes maintenance, repair, upgrades, and potentially modernization services, all of which are vital for keeping destroyers combat-ready. By contracting these specialized services, the Navy can leverage external expertise and resources, potentially leading to more efficient upkeep and faster turnaround times for repairs or upgrades. Sustained engineering support helps mitigate obsolescence issues, incorporates new technologies, and ensures that the fleet can meet its mission requirements effectively in a dynamic geopolitical environment.

How has federal spending on engineering services for naval vessels evolved over the past decade?

Federal spending on engineering services for naval vessels has generally remained substantial over the past decade, reflecting the ongoing need to maintain, modernize, and upgrade a large and complex fleet. While specific figures fluctuate based on shipbuilding programs, modernization initiatives, and maintenance cycles, the overall trend indicates a consistent demand for these specialized services. Factors influencing spending include geopolitical threats, technological advancements requiring platform upgrades, and the aging of existing vessels. The Department of the Navy, particularly through entities like NAVSEA, is a primary driver of this spending. Analyzing historical contract awards and budget allocations would reveal trends in spending patterns, shifts in technology focus (e.g., towards cyber or unmanned systems integration), and the prevalence of different contract types used for these services.

Industry Classification

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

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

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: FOOT OF SAMPSON ST, SAN DIEGO, CA, 92170

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline