DoD's $46M Engineering Services Contract with BAE Systems Faces Scrutiny for Lack of Competition

Contract Overview

Contract Amount: $46,298,362 ($46.3M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2008-05-09

End Date: 2013-10-31

Contract Duration: 2,001 days

Daily Burn Rate: $23.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ENGR TECH SVCS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $46.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ENGR TECH SVCS Key points: 1. Significant spending on engineering services for the Department of the Navy. 2. Sole-source award to BAE Systems raises questions about competitive pricing. 3. Contract duration of 5 years and value of $46M warrant close examination. 4. Potential for higher costs due to limited competition.

Value Assessment

Rating: questionable

The contract value of $46,298,362 for engineering services over five years is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar engineering service contracts awarded through competitive processes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may lead to less favorable pricing for the government compared to an open competition.

Taxpayer Impact: The absence of competition likely results in higher costs for taxpayers, as the government may not have secured the best possible price for these engineering services.

Public Impact

Taxpayers may be overpaying for engineering services due to the sole-source award. Lack of transparency in the procurement process raises concerns about accountability. Potential for reduced innovation and quality if competition is stifled.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost-plus contract type

Positive Signals

Established contractor
Long-term contract

Sector Analysis

This contract falls under Engineering Services (NAICS 541330), a sector critical for defense and infrastructure projects. Spending benchmarks for this sector vary widely based on project complexity and duration, but competitive bidding is typically expected to drive efficiency and cost savings.

Small Business Impact

The data indicates this contract was not awarded to a small business. The sole-source nature of the award further suggests that opportunities for small businesses to participate in this specific procurement were likely limited or non-existent.

Oversight & Accountability

The sole-source award and cost-plus contract type necessitate robust oversight to ensure that costs are reasonable and that the contractor is performing effectively. Without competitive pressure, the government must rely heavily on its oversight mechanisms to protect taxpayer interests.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competition and price discovery.
Cost-plus contract type may incentivize higher costs.
Lack of transparency regarding justification for sole-source award.
Potential for taxpayer overpayment due to limited competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ENGR TECH SVCS

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $46.3 million.

What is the period of performance?

Start: 2008-05-09. End: 2013-10-31.

What was the justification for awarding this engineering services contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of available sources. Without specific details, it's unclear why BAE Systems was the only viable option. A thorough review would examine the documented rationale and explore whether market research was adequately conducted to identify potential competitors or if a phased approach could have introduced competition later.

How does the cost-plus fixed fee structure impact the government's ability to control costs and ensure value for money in this contract?

Cost-plus contracts, while offering flexibility, can incentivize contractors to incur higher costs as a portion of their fee is often tied to the total cost. The 'fixed fee' component provides some predictability, but the government bears the risk of cost overruns. Effective oversight is crucial to scrutinize allowable costs and ensure the contractor is not inflating expenses to increase their fee.

What performance metrics and deliverables were established to measure the effectiveness and value of BAE Systems' engineering services under this contract?

Measuring the effectiveness of engineering services requires clearly defined deliverables, performance standards, and quality metrics. Without insight into these specific contract terms, it's difficult to assess if the government received adequate value. Key indicators would include adherence to project timelines, quality of engineering designs, successful problem resolution, and overall contribution to the Department of the Navy's mission objectives.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002408R5404

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $46,382,220

Exercised Options: $46,302,220

Current Obligation: $46,298,362

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline