DoD's $250M BAE Systems Contract for US/UK Systems Integration Lacked Competition

Contract Overview

Contract Amount: $250,210,808 ($250.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2012-04-30

Contract Duration: 1,307 days

Daily Burn Rate: $191.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: US AND UK SYSTEMS INTEGRATION

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $250.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: US AND UK SYSTEMS INTEGRATION Key points: 1. Significant spending on a sole-source contract raises questions about value. 2. The lack of competition limits price discovery and potentially inflates costs. 3. The contract's duration and cost-plus structure may introduce performance risks. 4. Engineering services sector spending is substantial, but this contract's specifics warrant scrutiny.

Value Assessment

Rating: questionable

The contract's total award value of $250.2 million over 1307 days suggests a high per-day cost. Without competitive benchmarks, assessing its value is difficult, but the lack of competition is a primary concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits opportunities for price discovery and competition, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The absence of competition likely resulted in a higher price than a competed contract would have achieved, impacting taxpayer funds negatively.

Public Impact

Taxpayers may have overpaid due to the lack of competitive bidding. The sole-source nature raises concerns about the government's procurement strategy. The effectiveness of systems integration for US and UK forces is tied to this significant investment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration

Positive Signals

Specific systems integration for US/UK cooperation

Sector Analysis

This contract falls within the Engineering Services sector, which is a critical area for defense and technology. Spending in this sector is often high due to the complexity of projects, but competitive procurement is key to ensuring value.

Small Business Impact

The contract was awarded to BAE Systems, a large defense contractor. There is no indication that small businesses were involved in this specific sole-source award, missing an opportunity for their participation.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure the government received fair value and that the services provided were essential and effectively delivered.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited transparency in pricing
Contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $250.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. US AND UK SYSTEMS INTEGRATION

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 $250.2 million.

What is the period of performance?

Start: 2008-10-01. End: 2012-04-30.

What was the justification for awarding this 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 viable alternatives. Without specific documentation, it's unclear if alternatives were thoroughly explored. A competitive process would have likely yielded better pricing and potentially more innovative solutions, making the lack of competition a significant concern for taxpayer value.

How does the cost-plus incentive fee structure impact the contractor's incentive to control costs and deliver efficiently?

Cost-plus contracts, especially incentive fee types, allow the contractor to recover allowable costs plus a fee. While incentives aim to align contractor and government interests, they can still lead to less cost consciousness than fixed-price contracts. The government must diligently monitor costs and performance to ensure efficiency and prevent overruns.

What is the long-term strategic value and effectiveness of the US and UK systems integration provided under this contract?

The effectiveness hinges on the successful integration of systems critical for joint US-UK operations. The strategic value lies in enhanced interoperability and mission capability. However, assessing this without competitive benchmarks or performance reviews is challenging. The sole-source nature raises questions about whether the most effective and cost-efficient solutions were procured.

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $437,739,810

Exercised Options: $283,761,899

Current Obligation: $250,210,808

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline