DoD awards $19.8M for NATO Seasparrow engineering support, with BAE Systems as prime

Contract Overview

Contract Amount: $19,798,492 ($19.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-19

End Date: 2026-07-18

Contract Duration: 729 days

Daily Burn Rate: $27.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SUPPORT SERVICES IN SUPPORT OF THE NATO SEASPARROW PROJECT OFFICE PEO IWS-12 IN EXECUTING ITS RESPONSIBILITY TO SATISFY CURRENT & FUTURE NAVY NEEDS FOR US & CONSORTIUM NATION LAUNCHER AND EVOLVED SEASPARROW MISSILE (ESSM) REQUIREMENTS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $19.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ENGINEERING SUPPORT SERVICES IN SUPPORT OF THE NATO SEASPARROW PROJECT OFFICE PEO IWS-12 IN EXECUTING ITS RESPONSIBILITY TO SATISFY CURRENT & FUTURE NAVY NEEDS FOR US & CONSORTIUM NATION LAUNCHER AND EVOLVED SEASPARROW MISSILE (ESSM) REQUIREMENTS. Key points: 1. Contract focuses on critical missile system support for U.S. and allied navies. 2. BAE Systems Technology Solutions & Services Inc. is the prime contractor. 3. The contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 4. Competition was full and open, suggesting a potentially competitive pricing environment. 5. This award is a delivery order under a larger contract vehicle. 6. The contract duration is 729 days, ending in July 2026. 7. The contract value is approximately $19.8 million.

Value Assessment

Rating: fair

The contract value of $19.8 million for engineering support over two years appears reasonable given the specialized nature of missile system development and sustainment. However, without specific benchmarks for similar NATO Seasparrow project office support, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type introduces some risk, as it allows for the contractor to be reimbursed for allowable costs plus a negotiated fixed fee, which can sometimes lead to higher final costs than fixed-price contracts if not managed closely. Further analysis would require comparing the labor rates and overhead applied to this contract with industry standards for comparable defense engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of two bidders suggests a degree of competition, though the exact number of proposals received and the evaluation process details are not provided. Full and open competition generally promotes price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing due to the full and open competition. This approach helps ensure that the government is not overpaying for essential engineering services required for the NATO Seasparrow program.

Public Impact

The U.S. Navy and consortium nations participating in the NATO Seasparrow program will benefit from continued engineering support. Services delivered include technical expertise for the launcher and Evolved Seasparrow Missile (ESSM) requirements. The geographic impact is primarily within the United States, supporting naval operations and defense industrial base. Workforce implications include employment for specialized engineers and technical personnel within BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
Limited visibility into the specific performance metrics and quality assurance processes for this delivery order.
Reliance on a single prime contractor for critical engineering support could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, suggesting a competitive environment.
BAE Systems is an established defense contractor with experience in similar programs.
The contract supports a vital NATO defense initiative, indicating strategic importance.

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 research, development, sustainment, and modernization of military platforms and weapon systems. The NATO Seasparrow program itself represents a significant international collaboration in naval defense, requiring specialized technical expertise. Comparable spending benchmarks would involve analyzing other contracts for missile system engineering support, naval platform sustainment, and international defense program management.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, BAE Systems, is a large defense corporation. There is no explicit information provided regarding subcontracting plans for small businesses within this specific delivery order. Therefore, the direct impact on the small business ecosystem is likely minimal unless BAE Systems voluntarily includes small businesses in its subcontracting efforts.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's Program Executive Office for Integrated Warfare Systems (PEO IWS), specifically the NATO Seasparrow Project Office (PEO IWS-12). Accountability measures would be embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract awards databases, though detailed performance data may be restricted. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Missile Defense Agency Programs
Foreign Military Sales (FMS) Support
NATO Cooperative Programs
Defense Engineering Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type may lead to higher final costs than anticipated.
Limited number of bidders (2) could indicate potential concentration in the market for this specialized service.
Specific performance metrics and quality assurance details are not publicly available for this delivery order.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ENGINEERING SUPPORT SERVICES IN SUPPORT OF THE NATO SEASPARROW PROJECT OFFICE PEO IWS-12 IN EXECUTING ITS RESPONSIBILITY TO SATISFY CURRENT & FUTURE NAVY NEEDS FOR US & CONSORTIUM NATION LAUNCHER AND EVOLVED SEASPARROW MISSILE (ESSM) REQUIREMENTS.

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 $19.8 million.

What is the period of performance?

Start: 2024-07-19. End: 2026-07-18.

What is the historical spending pattern for engineering support services related to the NATO Seasparrow program?

Analyzing historical spending for the NATO Seasparrow program's engineering support requires access to detailed contract databases and budget allocations over several fiscal years. Typically, such programs involve sustained investment in research, development, testing, and evaluation (RDT&E), as well as sustainment and modernization efforts. Spending can fluctuate based on program milestones, upgrades, and the number of participating nations. Without specific historical data for this particular project office (PEO IWS-12), it's difficult to provide precise figures. However, defense programs of this nature often see multi-year commitments ranging from tens to hundreds of millions of dollars annually, depending on the phase of the system's lifecycle and geopolitical requirements. The current $19.8 million award represents a specific funding increment for a defined period, likely part of a larger, ongoing budgetary commitment to ensure the continued operational readiness and evolution of the Seasparrow missile system.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types for similar defense engineering services?

The Cost Plus Fixed Fee (CPFF) contract structure is common in defense acquisition, particularly for research and development or services where the scope of work is not precisely defined at the outset, or where innovation is a key component. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred and receives a predetermined fixed fee, which represents profit. This structure shifts some of the cost risk to the government, as the final cost is not fixed. Compared to Fixed-Price contracts (like FFP - Firm-Fixed-Price), CPFF offers more flexibility for the contractor to adapt to evolving requirements but can lead to higher costs for the government if cost controls are not robust. Other contract types, such as Cost Plus Incentive Fee (CPIF), introduce performance incentives to manage costs more effectively. For highly specialized engineering services like those for the NATO Seasparrow program, where technical challenges and evolving requirements are expected, CPFF can be an appropriate choice, provided strong government oversight is in place to manage costs and ensure value.

What are the specific performance risks associated with BAE Systems Technology Solutions & Services Inc. on this contract?

While BAE Systems is a large and experienced defense contractor, potential performance risks on this specific contract include challenges in meeting the highly specialized technical requirements of the NATO Seasparrow launcher and ESSM systems. Given the CPFF structure, there's a risk of cost overruns if project management or technical execution is inefficient. Another risk could be delays in delivering critical engineering support, which could impact the readiness or modernization schedule of the U.S. Navy and allied nations. Furthermore, ensuring seamless integration and interoperability with existing naval platforms and future upgrades requires meticulous attention to detail and adherence to stringent defense standards. The complexity of international collaboration within the NATO framework also presents potential coordination risks. Effective risk mitigation would involve robust government oversight, clear performance metrics, and proactive communication channels with the contractor.

What is the estimated value of the overall NATO Seasparrow program, and how does this $19.8M award fit into it?

The overall value of the NATO Seasparrow program is substantial and spans decades, involving multiple nations and continuous upgrades to the missile system. While a precise, current total program value is difficult to ascertain due to its international and evolving nature, it represents a significant investment in naval air defense capabilities for participating countries. This $19.8 million award is a specific delivery order under a broader contract vehicle, likely covering engineering support services for a defined period (729 days). It represents a portion of the annual funding allocated to sustain and potentially enhance the Seasparrow system. Such delivery orders are common in large, long-term defense programs to procure specific services or capabilities incrementally, allowing for flexibility in budgeting and execution based on evolving needs and priorities.

What are the implications of 'full and open competition' for the taxpayer in the context of this $19.8M contract?

The 'full and open competition' designation for this $19.8 million contract implies that the Department of the Navy solicited proposals from all responsible sources capable of providing the required engineering support services. This process generally fosters a competitive environment where multiple companies can bid, driving down prices through market forces. For taxpayers, this means there is a higher likelihood that the government is receiving a fair and reasonable price for the services rendered, as contractors are incentivized to offer competitive bids to win the contract. While the Cost Plus Fixed Fee (CPFF) structure still carries some inherent cost risk for the government, the competitive bidding process helps establish a baseline for acceptable costs and fees. It reduces the risk of inflated pricing that might occur under sole-source or limited competition scenarios, ultimately aiming to maximize the value of taxpayer dollars invested in defense capabilities.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0016423R3000

Offers Received: 2

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: $56,836,792

Exercised Options: $21,844,747

Current Obligation: $19,798,492

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $2,367,018

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7224

IDV Type: IDC

Timeline