DoD awards $117M contract for Systems Engineering & Integration to BAE Systems, facing no competition

Contract Overview

Contract Amount: $116,889,999 ($116.9M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2011-10-03

End Date: 2013-11-03

Contract Duration: 762 days

Daily Burn Rate: $153.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SP2012 SYSTEMS ENGINEERING&INTEGRATION

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $116.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: SP2012 SYSTEMS ENGINEERING&INTEGRATION Key points: 1. Significant contract value of $117 million for specialized engineering services. 2. Sole-source award to BAE Systems raises questions about competitive pricing. 3. Contract duration of 762 days suggests a substantial, ongoing need. 4. Focus on engineering services within the defense sector.

Value Assessment

Rating: questionable

The contract value of $117 million for engineering services is substantial. Without competitive bids, it's difficult to assess if this price represents fair market value compared to similar contracts. Benchmarking is challenging due to the sole-source nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, BAE Systems, was considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers as competition is absent.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these engineering services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Potential for reduced innovation and service quality without market pressure. Reliance on a single contractor for critical defense systems engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

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

Positive Signals

Award to established contractor
Clear contract duration

Sector Analysis

This contract falls within the Engineering Services sector, specifically for systems engineering and integration within the Department of Defense. Spending in this area is critical for complex defense projects, but often involves high costs and specialized expertise.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as 'sb' is false. The focus was on a large, sole-source provider, bypassing opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is delivering services effectively and at a reasonable cost, despite the lack of competition. Accountability is crucial given the significant taxpayer investment.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition.
Cost-plus contract type may incentivize higher costs.
Lack of competitive bidding makes price validation difficult.
Potential for contractor lock-in.
Absence of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $116.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. SP2012 SYSTEMS ENGINEERING&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 $116.9 million.

What is the period of performance?

Start: 2011-10-03. End: 2013-11-03.

What is the justification for the sole-source award, and how was the price determined to be fair and reasonable without competition?

The justification for a sole-source award typically involves specific circumstances like unique capabilities or urgent needs. Without access to the detailed justification documentation, it's impossible to definitively state why BAE Systems was the only viable option. Price reasonableness is usually assessed through historical pricing, independent government cost estimates, or comparison to similar commercial services, but this is more challenging and less reliable without competitive benchmarks.

What are the specific risks associated with a sole-source, cost-plus contract for critical defense systems engineering?

Sole-source contracts eliminate competitive pressure, potentially leading to inflated costs and reduced contractor efficiency. Cost-plus arrangements, while offering flexibility, can incentivize higher spending as the contractor is reimbursed for costs plus a fee. For critical defense systems, this combination increases financial risk and could impact the overall value and effectiveness of the acquired services if not rigorously managed and overseen.

How can the government ensure effective delivery and value for money on this contract given the lack of competition?

Effective oversight is paramount. The government must implement robust performance monitoring, conduct thorough cost analyses, and maintain strong communication with the contractor. Establishing clear performance metrics and milestones, and potentially bringing in independent technical experts, can help ensure services are delivered as expected and that costs remain justifiable, mitigating some risks inherent in sole-source, cost-plus agreements.

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 FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 520 GAITHER ROAD, 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: $124,254,610

Exercised Options: $120,301,300

Current Obligation: $116,889,999

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $2,078,586

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline