Dod Awards $18.8M for Trident D5LE2 System's Engineering to BAE Systems, a Sole-Source Contract

Contract Overview

Contract Amount: $18,833,209 ($18.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2022-10-01

End Date: 2024-09-30

Contract Duration: 730 days

Daily Burn Rate: $25.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TRIDENT D5LE2 SYSTEM'S ENGINEERING

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $18.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: TRIDENT D5LE2 SYSTEM'S ENGINEERING Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Engineering services are critical for complex defense systems like the TRIDENT missile. 3. The contract duration of 730 days suggests a need for sustained technical support. 4. Cost Plus Fixed Fee contract type may incentivize cost overruns. 5. The awardee, BAE SYSTEMS, is a major defense contractor with significant experience. 6. Geographic location in Maryland may indicate a concentration of specialized engineering talent.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source engineering contract is challenging without comparable bids. The Cost Plus Fixed Fee (CPFF) structure, while common for complex R&D, carries inherent risks of cost escalation. The fixed fee component provides some incentive for the contractor to manage costs, but the absence of competitive pressure means the government cannot be certain it is receiving the best possible price. Further analysis would require understanding the specific technical challenges and the contractor's historical performance on similar projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the unique capabilities, technology, or security clearances required for the service. While efficient in certain circumstances, it significantly reduces the potential for price discovery through competition, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive bidding. Without multiple offers, the government has less leverage to negotiate favorable pricing.

Public Impact

The primary beneficiary is the Department of the Navy, which relies on these engineering services for the TRIDENT D5LE2 SYSTEM. Services delivered include critical engineering support for a strategic defense asset. The geographic impact is concentrated in Maryland, where BAE SYSTEMS operates. Workforce implications include the employment of specialized engineers and technical staff within BAE SYSTEMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize higher spending if not closely monitored.
Lack of transparency in the sole-source justification requires careful review.
Potential for contractor lock-in due to specialized nature of the system.
Limited visibility into alternative solutions or innovative approaches from other vendors.

Positive Signals

BAE SYSTEMS is a reputable contractor with extensive experience in defense systems.
Engineering services are essential for maintaining the operational readiness of strategic assets.
The contract duration suggests a stable, long-term need for these critical services.
The fixed fee component provides some cost control within the CPFF structure.
Maryland's concentration of defense contractors may facilitate efficient project execution.

Sector Analysis

The aerospace and defense sector is characterized by high R&D investment, complex supply chains, and significant government procurement. Contracts for strategic weapon systems engineering, like the TRIDENT missile program, represent a critical but niche segment. Spending in this area is driven by national security imperatives and technological advancements. Comparable spending benchmarks are difficult to establish due to the unique nature of such systems, but overall defense engineering services represent a substantial portion of the DoD's budget.

Small Business Impact

This contract was awarded to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC., a large defense contractor, and does not appear to have a small business set-aside component. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The focus on specialized engineering for a major defense system suggests that prime contracting opportunities for small businesses may be limited unless they are part of BAE's 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 sole-source award, the justification and terms would be subject to review by relevant procurement authorities. Transparency is limited by the non-competitive nature, but contract performance metrics and financial expenditures would be monitored. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

TRIDENT II (D5) Missile Program
Strategic Weapons Systems
Naval Sea Systems Command (NAVSEA) Contracts
Defense Engineering Services
BAE Systems Defense Contracts

Risk Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee contract type carries risk of cost overruns.
Lack of transparency in competition justification.
Potential for contractor dependency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. TRIDENT D5LE2 SYSTEM'S ENGINEERING

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 $18.8 million.

What is the period of performance?

Start: 2022-10-01. End: 2024-09-30.

What is BAE Systems' track record with the TRIDENT program and similar complex engineering contracts?

BAE Systems has a long-standing relationship with the U.S. Navy and has been a key contractor for various aspects of the TRIDENT missile program, including support, sustainment, and component manufacturing. Their extensive experience in complex defense systems engineering, including other strategic weapon platforms, suggests a strong capability to handle the technical demands of the TRIDENT D5LE2 SYSTEM. Historical performance data on similar contracts, including on-time delivery, budget adherence, and technical success rates, would be crucial for a comprehensive assessment. While specific contract performance details are often proprietary, their continued selection for critical programs indicates a generally positive track record.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for this type of engineering service?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex engineering services where the scope of work is not fully defined at the outset, or where significant uncertainties exist. It reimburses the contractor for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if requirements change but carries a higher risk of cost overruns as the contractor is incentivized to incur costs to achieve the fixed fee. Other types like Cost Plus Incentive Fee (CPIF) could offer better cost control by linking profit to performance targets. For highly specialized, non-routine engineering, CPFF is a common, albeit riskier, choice than FFP.

What are the primary risks associated with a sole-source award for critical defense system engineering?

The primary risks associated with a sole-source award for critical defense system engineering include a lack of competitive pricing, potentially leading to inflated costs for taxpayers. Without competition, there's reduced incentive for the contractor to innovate or optimize efficiency, as there are no rivals to outperform. There's also a risk of contractor over-reliance or 'lock-in,' where the government becomes dependent on a single provider, making future transitions difficult and costly. Furthermore, the absence of multiple bids can obscure whether the chosen contractor truly offers the best value or if alternative, potentially more cost-effective, solutions exist. Robust oversight and negotiation are critical to mitigate these risks.

What is the historical spending pattern for TRIDENT D5LE2 SYSTEM'S ENGINEERING or similar services by the Department of the Navy?

Historical spending on the TRIDENT D5LE2 SYSTEM'S ENGINEERING and related services by the Department of the Navy is substantial, reflecting the strategic importance and complexity of the TRIDENT missile program. While specific annual figures for this exact contract line item fluctuate based on program phases and needs, the overall sustainment and modernization of the TRIDENT fleet represent a multi-billion dollar investment over its lifecycle. The Navy consistently allocates significant resources to ensure the reliability and effectiveness of its strategic deterrent. Analyzing past contract awards for similar engineering, maintenance, and upgrade services for the TRIDENT system would reveal trends in spending, contractor selection, and pricing, providing context for the current $18.8 million award.

Are there any specific performance metrics or Key Performance Indicators (KPIs) associated with this contract that are publicly available?

Publicly available performance metrics or Key Performance Indicators (KPIs) for specific defense contracts like this one are typically limited due to national security sensitivities and proprietary business information. While the contract itself will contain performance clauses and standards that the contractor must meet, these are rarely disclosed in detail. The Department of the Navy monitors adherence to these standards, which could include technical accuracy, timeliness of deliverables, and adherence to safety protocols. However, the government generally does not release granular performance data for individual contracts to the public domain, making it difficult to assess the contractor's specific achievements or shortcomings outside of general contract awards and terminations.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003023R6004

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 RD, 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: $20,065,209

Exercised Options: $20,065,209

Current Obligation: $18,833,209

Subaward Activity

Number of Subawards: 61

Total Subaward Amount: $5,799,135

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline