DoD's $20.5M Trident II FAE Support contract awarded to BAE Systems without competition

Contract Overview

Contract Amount: $20,474,597 ($20.5M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2016-10-01

End Date: 2021-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $11.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF FY17 TRIDENT II (D5) FAE SUPPORT SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IGF::CT::IGF FY17 TRIDENT II (D5) FAE SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Long-term contract duration of 5 years suggests a sustained need for these specialized engineering services. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored. 4. Performance is located in Maryland, indicating a concentration of specialized defense support in that region. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms in this niche. 6. The absence of competition suggests a unique capability or proprietary technology held by the contractor.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized engineering services for the Trident II program. Without competitive bids, it's difficult to ascertain if the $20.5 million represents a fair market price. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D and complex services, carries inherent risks of cost escalation if rigorous oversight is not maintained. The contractor, BAE Systems, is a major defense contractor, suggesting they possess the necessary expertise, but the lack of competition prevents a direct value-for-money assessment against alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple offerors. This typically occurs when only one source is capable of meeting the government's needs, often due to proprietary technology, unique expertise, or urgent requirements where competition is not feasible. The lack of competition means there was no direct price negotiation driven by market forces, potentially leading to a higher price than if multiple bids had been received.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive pressure. Without competing the requirement, the government lacks assurance that it secured the best possible price and value.

Public Impact

The primary beneficiaries are the Department of Defense and the Navy, ensuring continued support for the critical Trident II (D5) missile system. Services delivered include specialized engineering support, crucial for the maintenance and operational readiness of strategic nuclear deterrents. The geographic impact is concentrated in Maryland, where the contractor's facility is located, supporting local specialized technical employment. Workforce implications include the employment of highly skilled engineers and technical personnel required for this sensitive program.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can lead to cost overruns without stringent oversight.
Long contract duration (5 years) increases exposure to potential performance issues or changing requirements.
Lack of small business participation means fewer opportunities for smaller, innovative firms in this specialized sector.

Positive Signals

BAE Systems is a reputable defense contractor with established expertise in complex systems.
Contract supports a critical national security program (Trident II D5), ensuring readiness.
Engineering services are specialized and likely require unique capabilities not widely available.
Contract provides stable, long-term support essential for the sustainment of strategic assets.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense applications. The market for specialized engineering services for strategic weapon systems is highly concentrated, with a limited number of large defense contractors possessing the requisite security clearances, expertise, and infrastructure. Comparable spending benchmarks are difficult to establish due to the unique nature of the Trident II program and the sole-source award. However, the overall defense engineering services market is substantial, driven by modernization and sustainment needs of military platforms.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The nature of the specialized engineering services required for the Trident II program likely favors large, established defense contractors like BAE Systems. This limits opportunities for small businesses to participate directly in this specific contract, although they may be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure costs remain within acceptable limits and that the contractor meets all performance requirements. Transparency is generally limited for sole-source defense contracts involving sensitive technologies. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Trident II D5 Strategic Weapon System
Ballistic Missile Submarine Program
Naval Sea Systems Command (NAVSEA) Contracts
Defense Engineering Services Contracts
Strategic Deterrent Modernization Programs

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IGF::CT::IGF FY17 TRIDENT II (D5) FAE SUPPORT SERVICES

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 $20.5 million.

What is the period of performance?

Start: 2016-10-01. End: 2021-09-30.

What is BAE Systems' track record with similar sole-source defense engineering contracts?

BAE Systems Technology Solutions & Services Inc. has a significant history of performing complex defense engineering and support services for the U.S. military, often through large, sole-source, or competitively awarded contracts. Their portfolio includes work on various naval systems, aerospace, and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) programs. While specific details on past sole-source contracts for highly specialized systems like the Trident II are often proprietary, BAE's extensive experience suggests a capability to meet demanding technical and security requirements. However, the lack of competition on this specific contract means direct comparisons of their performance on similar sole-source engagements are not publicly available, making it difficult to assess if this award represents a pattern of sole-source reliance or a justified exception.

How does the $20.5 million contract value compare to similar engineering support for strategic weapon systems?

Direct comparison of the $20.5 million contract value for Trident II FAE support is challenging due to the unique and highly specialized nature of the work, coupled with its sole-source award. Strategic weapon systems, particularly nuclear deterrents like the Trident II, require extremely high levels of technical expertise, security, and reliability, which command premium pricing. Unlike more common engineering services, the scope often involves proprietary technologies, classified information, and long-term sustainment critical for national security. Without competitive bids or publicly available data on similar sole-source contracts for comparable systems (e.g., ICBM support, bomber sustainment engineering), it's difficult to benchmark this value effectively. The Cost Plus Fixed Fee structure also means the final cost could fluctuate based on actual expenses incurred, further complicating direct comparisons.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee contract for critical defense systems?

The primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract for critical defense systems like the Trident II FAE support are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than might be achieved through a competitive bidding process. The government lacks the leverage of multiple offers to negotiate the best possible price. Secondly, the CPFF structure, while allowing for flexibility in scope and covering actual costs plus a fixed fee, can incentivize the contractor to incur higher costs, as their fee is fixed regardless of the total expenditure. This necessitates robust government oversight to monitor costs, prevent inefficiencies, and ensure the contractor remains focused on delivering value within the agreed-upon fee structure. Without stringent oversight, there's an increased risk of cost overruns and reduced value for taxpayer money.

What is the historical spending pattern for Trident II (D5) FAE support services?

Historical spending data specifically for 'Trident II (D5) FAE Support Services' is not readily available in the provided dataset or easily accessible public databases without deeper investigation into specific contract vehicles over time. However, the Trident II (D5) program itself is a long-standing and critical component of the U.S. strategic nuclear triad, involving continuous sustainment, modernization, and operational support. Spending on such programs typically spans decades and involves substantial, often multi-billion dollar, investments across various contracts for missile production, maintenance, testing, and support services. Given the nature of strategic systems, funding is generally consistent, driven by readiness requirements and periodic upgrades. This $20.5 million contract represents a portion of that ongoing lifecycle support expenditure, awarded for a five-year period.

How does the contract's performance period (5 years) impact risk and value assessment?

The 5-year performance period for this contract (1825 days) represents a significant commitment by the Department of the Navy. From a risk perspective, a longer duration increases the potential exposure to unforeseen challenges, such as changes in technology, evolving threat landscapes, or contractor performance issues. It also means that any inefficiencies or cost overruns incurred early in the contract could have a magnified impact over the full term. However, for highly specialized and critical systems like the Trident II, a longer contract duration can also provide stability and predictability for both the government and the contractor. This can foster a stronger working relationship, allow for more effective long-term planning and investment in specialized resources, and potentially lead to greater efficiencies and knowledge retention compared to a series of shorter, competitively re-bid contracts, provided robust oversight is maintained.

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

Solicitation ID: N0003017Q0007

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

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: $20,709,694

Exercised Options: $20,709,694

Current Obligation: $20,474,597

Actual Outlays: $1,589,713

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $1,562,599

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline