DoD Awards BAE Systems $81.5M for Engineering Services, Facing Potential Cost Overruns

Contract Overview

Contract Amount: $81,538,279 ($81.5M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2002-09-26

End Date: 2011-04-15

Contract Duration: 3,123 days

Daily Burn Rate: $26.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200212!006732!1700!A8102 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3235 !A!N! !N!P00005 !20020926!20021231!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!69525!037!24!ST. INIGOES !ST. MARY S !MARYLAND !+000000654000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !3! ! !C! ! !99990909!B! ! !A! !C!N!U!2!001!N!7A!C!Y!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!N! ! ! ! ! !4510 !0001!

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $81.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200212!006732!1700!A8102 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3235 !A!N! !N!P00005 !20020926!20021231!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!69525!037!24!ST. INIGOES !ST. M… Key points: 1. Contract awarded to BAE Systems for engineering technical services. 2. Full and open competition was utilized, but specific price discovery details are limited. 3. Potential for cost overruns exists due to the Cost Plus Fixed Fee contract type. 4. The sector is Defense, with a significant contract value.

Value Assessment

Rating: questionable

The contract value is $81.5 million. Without specific benchmarks for similar engineering services contracts, it's difficult to definitively assess if this pricing is competitive. The Cost Plus Fixed Fee structure introduces risk for cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition. However, the Cost Plus Fixed Fee (CPFF) pricing structure may not incentivize the contractor to minimize costs, potentially leading to higher final prices than anticipated.

Taxpayer Impact: The CPFF structure carries a risk of exceeding the initial estimated cost, which could result in higher taxpayer expenditure than initially budgeted for these engineering services.

Public Impact

Defense spending on engineering services impacts military readiness and technological advancement. Contractors like BAE Systems play a crucial role in supporting defense operations. Transparency in contract pricing and cost controls is vital for taxpayer accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited detail on price discovery

Positive Signals

Full and open competition utilized
Established contractor with defense experience

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the Defense industry. Spending in this area supports research, development, and sustainment of military systems. Benchmarks for engineering services can vary widely based on complexity and duration.

Small Business Impact

The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small business subcontracting opportunities were adequately pursued or reported.

Oversight & Accountability

The contract was awarded by the Naval Air Warfare Center. Oversight mechanisms should focus on monitoring costs, ensuring performance, and verifying that the fixed fee remains appropriate throughout the contract duration.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited detail on price discovery
No small business award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200212!006732!1700!A8102 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3235 !A!N! !N!P00005 !20020926!20021231!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHNOLOGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!69525!037!24!ST. INIGOES !ST. MARY S !MARYLAND !+000000654000!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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $81.5 million.

What is the period of performance?

Start: 2002-09-26. End: 2011-04-15.

What specific engineering technical services are being provided under this contract, and how do they align with current defense priorities?

The contract specifies 'ENGINEERING TECHNICAL SERVICES' under NAICS code 541330. While the exact nature of these services isn't detailed, they likely support naval aviation programs, potentially encompassing design, testing, analysis, or maintenance support for aircraft and related systems. Their alignment with defense priorities would depend on the specific naval aviation platforms or initiatives they are intended to support.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) structure in this contract, and what mitigation strategies are in place?

The primary risk of a CPFF contract is that the contractor may have less incentive to control costs, as the fee is fixed regardless of the final cost. This can lead to cost overruns. Mitigation strategies could include robust government oversight, detailed cost tracking, performance metrics, and clear contract clauses defining allowable costs and fee adjustments.

How effectively does the 'full and open competition' ensure competitive pricing for these specialized engineering services, given the CPFF structure?

Full and open competition aims to maximize the pool of potential bidders, theoretically driving down prices. However, the CPFF structure itself can complicate price competition, as the focus shifts from a fixed price to managing costs to achieve a fixed fee. The effectiveness relies on the government's ability to accurately estimate costs and negotiate a fair fixed fee, even with multiple bidders.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 20850

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline