DoD's $30.8M BAE Systems contract for engineering services awarded via sole-source justification

Contract Overview

Contract Amount: $30,871,210 ($30.9M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2013-10-29

End Date: 2017-03-31

Contract Duration: 1,249 days

Daily Burn Rate: $24.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CL::IGF N20 SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $30.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IGF::CL::IGF N20 SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Significant duration of 1249 days suggests a long-term need for services. 3. Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns. 4. No small business set-aside, potentially limiting opportunities for smaller firms. 5. Contract performance period spans over three years, indicating substantial resource allocation. 6. Engineering services are critical for defense operations, but competition is key for value.

Value Assessment

Rating: fair

The contract's value of $30.8 million over approximately 4 years for engineering services requires careful benchmarking. Without specific deliverables or comparable contracts, assessing value for money is challenging. The CPFF structure, while allowing flexibility, can lead to higher costs if not managed tightly. The lack of competition further complicates a direct value assessment, as market-driven pricing pressures are absent.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required services. The lack of competition means that the government did not benefit from multiple bids, which could have driven down prices or offered innovative solutions. This raises questions about whether the government explored all avenues for competition.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price due to the absence of competitive bidding. This can lead to higher overall spending for similar services compared to competed contracts.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations. The contract likely supports critical defense infrastructure or technological development. Services are delivered within Virginia, impacting the local economy and workforce. Specialized engineering expertise is required, potentially involving highly skilled professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Cost Plus Fixed Fee structure may incentivize higher spending if not rigorously managed.
Lack of small business participation could limit broader economic impact.

Positive Signals

Contract addresses a specific, likely critical, engineering need for the Department of Defense.
Long contract duration suggests a stable, ongoing requirement, providing predictability.
BAE Systems is a known entity in defense contracting, implying established capabilities.

Sector Analysis

This contract falls within the Engineering Services sector, a vital component of the broader defense industrial base. The market for defense engineering services is substantial, with significant government spending allocated annually. This specific contract likely supports specialized naval engineering requirements, fitting into a niche within the larger defense IT and services market. Benchmarking would require comparison to other sole-source or competed engineering contracts within the DoD.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract are limited. The absence of a small business focus in this award does not necessarily reflect the overall small business utilization within the Department of Defense, but it does represent a missed opportunity for smaller firms in this instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations. Transparency is dependent on the level of detail made public regarding contract performance and expenditures, which can be limited for sole-source awards.

Related Government Programs

Department of Defense Engineering Services
Naval Sea Systems Command Contracts
Sole-Source Defense Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IGF::CL::IGF N20 SUPPORT

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 $30.9 million.

What is the period of performance?

Start: 2013-10-29. End: 2017-03-31.

What specific engineering services were provided under this contract, and how do they align with the Department of the Navy's mission requirements?

The contract, awarded to BAE Systems Technology Solutions & Services Inc., was for engineering services under NAICS code 541330. While the specific nature of these services is not detailed in the provided data, engineering services within the Department of Defense typically encompass a wide range, including design, development, testing, and technical support for military systems, platforms, and infrastructure. Given the awarding agency (Department of the Navy), these services could relate to naval vessel design, maintenance, modernization, or the development of associated combat systems. The 'N20 SUPPORT' designation in the data might hint at a specific program or system requiring technical and engineering assistance. Without further documentation, the precise alignment with mission requirements remains general but is understood to be critical for naval operational capabilities.

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

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source justification. The specific reasons for this determination are not detailed in the abbreviated data. Typically, sole-source awards are justified when only one responsible source is capable of providing the required services, often due to unique capabilities, proprietary technology, or urgent and compelling needs where competition is not feasible. The government is required to document this justification thoroughly. While the data states it was not available for competition, it does not specify if alternative sources were considered and found unsuitable, or if the justification precluded their consideration from the outset.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact cost control and value for money compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract type involves the contractor being reimbursed for all allowable costs plus a fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or is subject to change. While it allows for flexibility and can be beneficial for research and development or complex projects, it carries inherent risks for cost control. The contractor has less incentive to minimize costs compared to fixed-price contracts, as their profit (the fixed fee) is not directly tied to cost savings. This can potentially lead to higher overall costs for the government if not managed with rigorous oversight, detailed cost tracking, and strong negotiation of allowable costs. Value for money under CPFF hinges heavily on effective government oversight to ensure costs are reasonable and allocable.

What is the historical spending pattern for similar engineering services contracts within the Department of the Navy or Department of Defense?

Historical spending on engineering services within the Department of the Navy and the broader Department of Defense is substantial, reflecting the complexity and ongoing needs of military operations and technological advancement. While this specific contract is for $30.8 million, the DoD procures billions of dollars in engineering services annually across various categories, including systems engineering, research and development support, technical consulting, and infrastructure design. Spending patterns vary significantly based on defense priorities, modernization efforts, and specific platform requirements. Contracts can range from small, specialized services to large, multi-year programs. Analyzing historical data for similar sole-source or competed engineering contracts, particularly those with CPFF structures, would provide a benchmark for assessing whether this $30.8 million award falls within typical spending ranges for comparable services.

What are the potential risks associated with a sole-source award of this magnitude and duration for engineering services?

A sole-source award of $30.8 million over 1249 days (approximately 3.4 years) for engineering services carries several potential risks. Firstly, the lack of competition means the government may not have secured the most cost-effective solution, potentially leading to overpayment. Secondly, the absence of multiple bidders could limit the infusion of innovative approaches or technologies that might have emerged from a competitive process. Thirdly, reliance on a single contractor for an extended period can create vendor lock-in, making it difficult and costly to switch providers if performance issues arise or market conditions change. Finally, without the pressure of competition, the contractor might have reduced incentives to maintain peak performance or efficiency throughout the contract's life, necessitating robust government oversight to mitigate these risks.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $30,871,210

Exercised Options: $30,871,210

Current Obligation: $30,871,210

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $4,510,901

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline