DoD Awards BAE Systems $69M for C-E Equipment Support, Lacking Competition

Contract Overview

Contract Amount: $69,064,177 ($69.1M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2015-12-23

End Date: 2018-12-07

Contract Duration: 1,080 days

Daily Burn Rate: $63.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF LIFE CYCLE SUPPORT (LCS) SERVICES AND INCIDENTAL MATERIALS TO THE SPECIAL COMMUNICATIONS MISSION SOLUTIONS (SCMS) DIVISION IN SUPPORT OF FIELDED C-E EQUIPMENT/SYSTEMS AND SUBSYSTEMS.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $69.1 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IGF::OT::IGF LIFE CYCLE SUPPORT (LCS) SERVICES AND INCIDENTAL MATERIALS TO THE SPECIAL COMMUNICATIONS MISSION SOLUTIONS (SCMS) DIVISION IN SUPPORT OF FIELDED C-E EQUIPMENT/SYSTEMS AND SUBSYSTEMS. Key points: 1. Significant contract value of $69 million for specialized communications equipment support. 2. Sole-source award to BAE Systems raises questions about competitive pricing. 3. Potential risk of inflated costs due to lack of competitive bidding. 4. Engineering services sector sees substantial investment in defense communications.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, makes direct pricing comparison difficult. The awarded amount of $69 million for 1080 days of service suggests a high daily rate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to BAE Systems. This lack of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: Taxpayers may be overpaying due to the absence of competitive pressure on pricing for these essential engineering services.

Public Impact

Ensures continued operational readiness of critical C-E equipment for the Navy. Supports specialized communication systems vital for national security operations. Potential for taxpayer funds to be used inefficiently without competitive oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of competition

Positive Signals

Essential support for fielded equipment
Supports critical communications mission

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting specialized communications equipment. Benchmarks for similar sole-source, cost-plus contracts in defense are often higher than competed ones.

Small Business Impact

The contract was awarded to BAE Systems Technology Solutions & Services Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this sole-source award.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure the fixed fee and overall costs remain reasonable and justified. Accountability for performance and cost control is crucial.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited transparency in pricing
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.1 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IGF::OT::IGF LIFE CYCLE SUPPORT (LCS) SERVICES AND INCIDENTAL MATERIALS TO THE SPECIAL COMMUNICATIONS MISSION SOLUTIONS (SCMS) DIVISION IN SUPPORT OF FIELDED C-E EQUIPMENT/SYSTEMS AND SUBSYSTEMS.

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 $69.1 million.

What is the period of performance?

Start: 2015-12-23. End: 2018-12-07.

What specific justification was provided for the sole-source award to BAE Systems, and how does it align with federal procurement regulations for non-competitive procurements?

The provided data does not include the specific justification for the sole-source award. Federal regulations typically require detailed documentation of the necessity for a sole-source procurement, such as unique capabilities, urgent needs, or lack of other sources. Without this justification, it's difficult to assess its validity and adherence to procurement laws.

How does the Cost Plus Fixed Fee (CPFF) structure, combined with the sole-source award, impact the government's ability to control costs and ensure value for money?

The CPFF structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. When combined with a sole-source award, this structure significantly reduces the government's leverage in cost negotiation. The absence of competition means the contractor has less incentive to minimize costs, potentially leading to higher overall expenditures compared to a competitively awarded contract.

What are the long-term implications for the Department of the Navy's C-E equipment sustainment if sole-source contracts become the norm for this type of support?

If sole-source contracts become the norm, the Navy risks reduced innovation, higher sustainment costs, and potential vendor lock-in. Over time, this could diminish the cost-effectiveness of its C-E equipment lifecycle support and potentially limit access to the best available technologies or services due to a lack of competitive market engagement.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0042115R0045

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 520 GAITHER ROAD, 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: $72,848,265

Exercised Options: $72,848,265

Current Obligation: $69,064,177

Subaward Activity

Number of Subawards: 83

Total Subaward Amount: $13,460,463

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline