Naval Air Warfare Center awards $77.2M engineering services contract to BAE Systems, highlighting long-term support needs

Contract Overview

Contract Amount: $77,254,243 ($77.3M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2002-03-28

End Date: 2007-01-31

Contract Duration: 1,770 days

Daily Burn Rate: $43.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200207!004729!1700!A8102 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3058 !A!N! !N!P00004 !20020328!20020620!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTGOMERY !MARYLAND !+000002300000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !3! ! !C! ! !99990909!B! ! !A! !A!N!U!2!002!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: SAINT INIGOES, ST. MARY'S County, MARYLAND, 20684

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $77.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200207!004729!1700!A8102 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3058 !A!N! !N!P00004 !20020328!20020620!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTG… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1770 days indicates a need for sustained engineering support. 3. BAE Systems, a major defense contractor, secured this award, reflecting its established presence in the sector. 4. The 'Engineering Services' category (NAICS 541330) points to specialized technical expertise required by the Navy. 5. The contract type 'COST PLUS FIXED FEE' suggests a balance between cost control and contractor incentive. 6. The award value of $77.2M represents a significant investment in naval aviation readiness and development.

Value Assessment

Rating: good

The contract value of $77.2M for engineering services over approximately 4.8 years appears reasonable given the specialized nature of naval aviation support. Benchmarking against similar large-scale engineering service contracts for defense agencies would provide a more precise value-for-money assessment. The 'COST PLUS FIXED FEE' contract type, while allowing for flexibility, requires careful oversight to ensure costs remain within acceptable parameters and that the fixed fee adequately compensates the contractor for their efforts without excessive profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of multiple bidders, though not explicitly detailed in the provided data, is implied by this competition type. A competitive process generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider range of innovative solutions being considered. This process helps ensure that government funds are used efficiently by driving down costs and improving the quality of services received.

Public Impact

The primary beneficiary is the Department of the Navy, specifically the Naval Air Warfare Center, receiving critical engineering and technical services. Services delivered likely include design, development, testing, and sustainment of naval aircraft systems and related technologies. The geographic impact is centered around the Naval Air Warfare Center's operations, likely in Maryland, but could extend to naval aviation bases globally. Workforce implications include employment opportunities for engineers, technicians, and support staff within BAE Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns are a potential concern with Cost Plus Fixed Fee contracts if not managed diligently.
Scope creep could increase costs and extend timelines beyond initial projections.
Dependence on a single large contractor like BAE Systems might limit future flexibility or competition.
Ensuring continuous innovation and technological advancement within the contracted services is crucial.

Positive Signals

Award through full and open competition suggests a robust selection process.
BAE Systems' established track record in defense contracting provides a degree of reliability.
The long contract duration indicates a stable, long-term partnership for critical support.
The specific NAICS code suggests specialized expertise is being procured, potentially leading to high-quality outcomes.

Sector Analysis

The defense engineering services sector is characterized by high barriers to entry, specialized technical expertise, and long-term relationships between contractors and government agencies. This contract falls within the broader aerospace and defense industry, where companies like BAE Systems provide critical support for complex military platforms. Spending in this sector is driven by national security requirements, technological advancements, and the need for ongoing sustainment of aging and new defense systems. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense to similar prime contractors.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on BAE Systems' internal policies and the specific requirements outlined in the contract, which are not detailed here. A lack of explicit small business set-aside suggests the primary focus was on securing the best overall technical and price proposal from any qualified source.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Naval Air Warfare Center. Accountability measures are typically embedded within the contract terms, including performance metrics, reporting requirements, and payment schedules tied to milestones. Transparency is often managed through contract award databases and public reporting, though specific details of performance and spending may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Department of Defense Engineering Services
Aerospace Engineering Support Contracts
Defense Research and Development Contracts
Naval Aviation Readiness Programs

Risk Flags

Potential for cost overruns in CPFF contracts.
Lack of detailed service description limits transparency.
Long-term reliance on a single large contractor.
Need for continuous monitoring of performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $77.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200207!004729!1700!A8102 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3058 !A!N! !N!P00004 !20020328!20020620!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTGOMERY !MARYLAND !+000002300000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !3! ! !C! ! !99990909!B

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 $77.3 million.

What is the period of performance?

Start: 2002-03-28. End: 2007-01-31.

What is BAE Systems' track record with the Department of the Navy for similar engineering services?

BAE Systems has a long and extensive history of contracting with the Department of the Navy and other branches of the U.S. military, providing a wide array of services including engineering, technical support, systems integration, and platform modernization. Their track record typically involves large, complex programs requiring specialized expertise. While specific performance metrics for this particular contract (N0042102C3058) are not detailed in the provided summary, BAE Systems is generally considered a major defense contractor with significant experience. A deeper dive into past performance reviews, contract modifications, and any disputes or awards associated with their previous Navy contracts would offer a more comprehensive understanding of their reliability and effectiveness in delivering engineering services.

How does the $77.2M award value compare to similar engineering services contracts for naval aviation?

The $77.2 million award value for engineering services to support naval aviation is substantial, reflecting the complexity and long-term nature of the requirements. To benchmark this value effectively, one would need to compare it against other contracts awarded by the Department of the Navy or other defense agencies for similar services, such as systems engineering, software development, or technical support for aircraft platforms. Factors like contract duration (1770 days in this case), the specific technologies involved, and the level of expertise required significantly influence pricing. Without access to a database of comparable contracts, it's challenging to definitively state if this represents excellent, fair, or questionable value. However, given the 'full and open competition' designation, it suggests the price was arrived at through a competitive process, which typically aims for market-based rates.

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

The primary risks associated with a 'Cost Plus Fixed Fee' (CPFF) contract, such as this $77.2 million award, revolve around cost control and potential for overruns. While the 'fixed fee' provides a defined profit margin for the contractor, the 'cost plus' component means the government reimburses the contractor's allowable costs. If costs escalate beyond initial estimates due to unforeseen technical challenges, scope creep, or inefficient performance, the total expenditure for the government can increase significantly. The government bears the risk of cost overruns, while the contractor is incentivized to complete the work within the estimated cost structure to protect their fee. Robust oversight, clear definition of allowable costs, and stringent change management processes are crucial to mitigate these risks.

What is the expected impact of this contract on naval aviation readiness and technological advancement?

This contract is expected to have a significant positive impact on naval aviation readiness and technological advancement by ensuring the continued availability of specialized engineering expertise. The Naval Air Warfare Center relies on such contracts to maintain, upgrade, and develop the complex systems that underpin naval aircraft operations. By securing long-term support from BAE Systems, the Navy can ensure that its aircraft platforms remain operational, safe, and technologically relevant. This includes potential advancements in areas like avionics, weapons systems integration, structural integrity, and operational software, all crucial for maintaining air superiority and mission effectiveness in a dynamic threat environment.

How has federal spending on engineering services for the Department of the Navy evolved over the years?

Federal spending on engineering services for the Department of the Navy has generally trended upwards over the years, driven by the continuous need to modernize aging fleets, develop new platforms, and maintain complex weapon systems. Factors such as evolving geopolitical landscapes, technological advancements, and budget allocations significantly influence these spending patterns. While this specific contract dates back to 2002, the overall demand for specialized engineering support has remained a consistent and substantial component of the Navy's budget. Analyzing historical spending data for NAICS code 541330 (Engineering Services) specifically for the Department of the Navy would reveal trends, identify peak spending periods, and highlight shifts in priorities or technological focus over time.

What does the 'NOT DISCERNABLE OR CLASSIFIED' status for 'NOT DISCERNABLE OR CLASSIFIED' imply for contract transparency?

The notation 'NOT DISCERNABLE OR CLASSIFIED' for certain fields, such as the specific product or service description beyond the NAICS code, can limit transparency. While the NAICS code 541330 clearly indicates 'Engineering Services,' the absence of more granular detail means the public may not fully understand the precise nature of the work being performed. This is common in defense contracting where specific project details might be sensitive or classified for national security reasons. However, it means that assessing the specific value, risks, or public impact related to the exact services rendered becomes more challenging without further information. The contract type (CPFF) and the prime contractor (BAE Systems) provide some context, but the exact deliverables remain somewhat opaque.

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: SEALED BID

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 08

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline