DoD awards $10.2M engineering services contract to BAE Systems, highlighting potential for cost-plus fixed-fee arrangements

Contract Overview

Contract Amount: $10,238,938 ($10.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-20

End Date: 2027-03-18

Contract Duration: 1,093 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: T-AO 207-210 LABOR

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29405

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $10.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: T-AO 207-210 LABOR Key points: 1. Contract awarded using Cost Plus Fixed Fee (CPFF) pricing, which can incentivize contractor efficiency but requires robust oversight. 2. Full and open competition suggests a healthy market for these engineering services, potentially leading to competitive pricing. 3. The contract duration of 1093 days indicates a significant, long-term need for these specialized engineering services. 4. Awarded by the Department of the Navy, this contract aligns with broader defense sector investments in technical support. 5. The contractor, BAE Systems, is a major player in the defense industry, suggesting established capabilities. 6. The contract's value, while substantial, needs to be benchmarked against similar engineering service contracts to assess value for money.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure requires careful monitoring to ensure costs remain reasonable and the fixed fee is justified. Without specific benchmarks for comparable engineering services, it's difficult to definitively assess value for money. However, the competitive award process provides some assurance that pricing was scrutinized. The total award value of $10.2 million over nearly three years suggests a moderate per-year spend for specialized engineering support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This approach typically fosters a competitive environment, encouraging bidders to offer their best pricing and technical solutions. The presence of 3 bids suggests a reasonable level of competition for this specific requirement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and encouraging innovation among bidders.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations and acquisition programs. This contract likely supports the development, testing, or sustainment of naval systems and technologies. The geographic impact is primarily centered around the contractor's facilities and potentially naval bases where services are rendered. The contract supports a skilled workforce in engineering and technical fields, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contracts can lead to cost overruns if not managed diligently.
Reliance on a single large contractor like BAE Systems could limit future competition or flexibility.
The specific engineering services required are not detailed, making it hard to assess potential risks in execution.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
BAE Systems is a well-established defense contractor with a proven track record.
The contract duration suggests a stable, long-term need that the contractor can fulfill.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and development of complex military systems. Spending in this area is often characterized by long-term contracts, specialized expertise, and significant government oversight. Comparable spending benchmarks would typically be found within other large defense contracts for similar technical support functions.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major defense contractor, there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business subcontracting is not detailed in this award notice and would require further investigation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to ensure costs are allowable, allocable, and reasonable, and that the fixed fee is earned. Transparency is typically maintained through contract reporting requirements and potential audits by agencies like the Defense Contract Audit Agency (DCAA).

Related Government Programs

Department of Defense Engineering Services
Naval Systems Engineering Support
Cost Plus Fixed Fee Contracts
Defense Contractor Services

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing requires diligent oversight to prevent cost overruns.
Contract duration is substantial, necessitating long-term performance monitoring.
Specific scope of work not detailed, making risk assessment challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. T-AO 207-210 LABOR

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 $10.2 million.

What is the period of performance?

Start: 2024-03-20. End: 2027-03-18.

What is the historical spending pattern for BAE Systems Technology Solutions & Services Inc. with the Department of the Navy for engineering services?

Analyzing historical spending for BAE Systems Technology Solutions & Services Inc. with the Department of the Navy for engineering services would involve reviewing past contract awards and task orders. This would reveal trends in contract values, types (e.g., CPFF, FFP), and the specific services rendered. A significant history of similar awards would indicate a strong existing relationship and established performance, while a lack of prior awards might suggest this is a new area of focus or a competitive win against incumbents. Without access to a comprehensive contract database, it's challenging to provide precise historical figures, but such an analysis is crucial for understanding the contractor's role and the government's reliance on their services over time.

How does the $10.2 million award value compare to similar engineering services contracts awarded by the Department of the Navy?

To benchmark the $10.2 million award value, one would compare it against recent Department of the Navy contracts for comparable engineering services, considering factors like contract duration, scope of work, and pricing structure (e.g., CPFF, FFP). If similar contracts for similar durations and complexity range from $5 million to $15 million, then this $10.2 million award appears to be within a reasonable market range. Conversely, if comparable contracts are significantly lower or higher, it might indicate either exceptional value or potential overpricing. The fact that this was a full and open competition with 3 bidders suggests the price was likely competitive within the market for these specific services.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risks associated with a $10.2 million CPFF contract revolve around cost control and contractor performance. For the government, the risk is that the contractor may not exert maximum effort to control costs, as the fee is fixed regardless of the final cost (within allowable limits). This can lead to cost overruns if not managed diligently. For the contractor, the risk lies in underestimating the effort required, which could erode the value of the fixed fee. Effective risk mitigation requires robust government oversight, detailed cost tracking, clear performance metrics, and regular audits to ensure the contractor is performing efficiently and costs are justified.

What is the expected impact of this contract on the defense engineering services market?

This contract's impact on the defense engineering services market is likely to reinforce the position of BAE Systems as a key provider in this domain. The award through full and open competition suggests a healthy market with multiple capable firms, potentially spurring innovation and competitive pricing among participants. For other firms, it highlights the demand for specialized engineering support within the Navy and the types of services being procured. The CPFF structure, while common, also underscores the need for effective government oversight in managing complex projects, setting a precedent for how such contracts are administered. The overall effect is likely a continued emphasis on technical expertise and long-term support relationships within the defense sector.

How does the geographic location of the award (South Carolina) influence the contract's execution and oversight?

The contract's designation of South Carolina (SN: SOUTH CAROLINA) as its location likely indicates where BAE Systems Technology Solutions & Services Inc. will perform a significant portion of the work. This geographic focus can influence oversight by potentially assigning contracting officers and technical representatives from nearby Navy installations or regional offices. It may also imply a concentration of specialized labor and resources within that state for defense engineering services. While oversight mechanisms are standardized across the DoD, local presence can facilitate more direct communication and site visits, potentially enhancing the effectiveness of monitoring performance and costs, especially if the work is concentrated at a specific facility.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0003922R1002

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

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: $11,995,004

Exercised Options: $11,995,004

Current Obligation: $10,238,938

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $851,531

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003923D1001

IDV Type: IDC

Timeline