DoD's $16.8M BAE Systems contract for engineering services awarded under full and open competition

Contract Overview

Contract Amount: $16,810,110 ($16.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-25

End Date: 2022-09-27

Contract Duration: 1,463 days

Daily Burn Rate: $11.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ESTABLISH TASK ORDER N00421-18-F-1082

Place of Performance

Location: SAINT INIGOES, SAINT MARYS County, MARYLAND, 20684

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ESTABLISH TASK ORDER N00421-18-F-1082 Key points: 1. Contract awarded to a large, established defense contractor, indicating a focus on proven capabilities. 2. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not closely managed. 3. Performance period spans over four years, suggesting a need for sustained engineering support. 4. The contract was competed openly, which generally promotes competitive pricing. 5. Geographic location in Maryland suggests a concentration of defense-related activities in the region. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract's value of $16.8 million over four years for engineering services appears within a reasonable range for a large defense contractor. However, the Cost Plus Fixed Fee (CPFF) structure warrants scrutiny. CPFF contracts can incentivize contractors to increase costs to maximize their fee, especially if the fixed fee is a significant portion of the total contract value. Benchmarking against similar engineering services contracts for the Department of Defense would be necessary to definitively assess value for money, but the lack of detailed cost breakdowns makes a precise comparison difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. This approach is generally favored for maximizing competition and achieving the best value for the government. The specific number of bidders is not provided, but the open competition suggests a robust bidding process was intended, which should theoretically lead to more competitive pricing and a wider selection of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government is not limited to a single provider, potentially saving taxpayer dollars through market forces.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational units requiring specialized engineering support. Services delivered include critical engineering expertise to support naval systems and platforms. The contract's geographic impact is centered in Maryland, a hub for defense contracting and federal agencies. Workforce implications include the employment of skilled engineers and technical personnel by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation if not rigorously managed.
Lack of specific details on competition level (number of bidders) limits a full assessment of price discovery.
The contract duration of over four years requires ongoing performance monitoring to ensure continued value.

Positive Signals

Awarded under full and open competition, suggesting a broad search for qualified offerors.
Contractor BAE Systems is a large, established entity with a significant presence in the defense sector.
The contract is for engineering services, a critical function for defense operations.

Sector Analysis

The defense engineering services sector is a substantial market driven by the U.S. government's continuous need for advanced technological solutions and platform support. Companies like BAE Systems Technology Solutions & Services Inc. operate within this competitive landscape, providing specialized expertise. Spending in this sector is often characterized by long-term contracts, complex requirements, and a focus on innovation and reliability. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal agencies for similar services.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses explicitly stated in the provided data. This means that opportunities for small businesses to directly participate in this specific contract may be limited unless they are subcontractors to the prime contractor, BAE Systems. The absence of a set-aside could mean that the scope of work was deemed too large or specialized for small business capabilities, or that the competition was focused on larger, established firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be embedded in the contract's performance work statement, requiring BAE Systems to meet specific technical, schedule, and cost objectives. Transparency is generally facilitated through contract award databases and reporting requirements, though detailed cost performance data may be sensitive. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

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

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to prevent cost overruns.
Lack of specific bidder count limits full assessment of competitive pressure.
Long contract duration necessitates ongoing performance evaluation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ESTABLISH TASK ORDER N00421-18-F-1082

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 $16.8 million.

What is the period of performance?

Start: 2018-09-25. End: 2022-09-27.

What is BAE Systems' track record with similar Cost Plus Fixed Fee (CPFF) contracts within the Department of Defense?

BAE Systems Technology Solutions & Services Inc., as a major defense contractor, has a long history of performing on various contract types, including CPFF, across numerous Department of Defense programs. Analyzing their historical performance on similar CPFF contracts would involve reviewing past performance evaluations, any documented instances of cost overruns or underruns, and the frequency with which their fees were adjusted. CPFF contracts inherently carry a risk of cost growth if the contractor's estimating and management processes are not robust, or if the scope of work is subject to significant change. A review of BAE Systems' specific performance on prior CPFF engineering services contracts would reveal their ability to manage costs effectively within this structure and provide insights into potential risks for this current award.

How does the $16.8 million value compare to other engineering services contracts awarded by the Department of the Navy in recent years?

The $16.8 million value for this four-year engineering services contract is moderate within the context of large federal procurements. However, to provide a precise comparison, one would need to analyze the scope and complexity of services rendered. The Department of the Navy awards numerous contracts for engineering support, ranging from small, specialized task orders to multi-billion dollar platform development programs. Benchmarking this contract would involve identifying similar contracts for engineering services, considering factors like duration, specific technical disciplines required (e.g., naval architecture, systems engineering, cybersecurity), and the contractor's size and experience. Without more granular data on comparable contracts, it's challenging to definitively state if $16.8 million represents a high, low, or average investment for the services procured.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific engineering services award?

The primary risk associated with a CPFF contract for engineering services is the potential for cost escalation. While the contractor's fee is fixed, the 'cost' portion is reimbursable. If the contractor does not effectively manage its resources, labor hours, or material costs, the total contract value can increase significantly beyond initial estimates, even though the fee remains constant. This can lead to the government paying more than anticipated for the services rendered. Additionally, CPFF contracts can sometimes reduce the contractor's incentive to control costs as rigorously as other contract types, such as fixed-price contracts, if the fixed fee represents a substantial portion of the total expected contract value. Robust government oversight and detailed cost tracking are crucial to mitigate these risks.

What is the expected impact of this contract on the specific engineering services market within Maryland?

This contract, awarded to BAE Systems Technology Solutions & Services Inc. and performed in Maryland, is likely to have a positive economic impact on the local engineering services market. It signifies continued government investment in defense-related engineering capabilities within the state. The presence of such a contract can support existing jobs and potentially create new ones for engineers, technicians, and support staff employed by BAE Systems or its subcontractors. Furthermore, it reinforces Maryland's position as a key hub for defense contracting and technological development, potentially attracting further investment and talent to the region's aerospace and defense ecosystem.

How does the duration of the contract (over four years) influence the assessment of its value and risk?

A contract duration of over four years (1463 days) for engineering services suggests a long-term need for sustained support, which can be efficient for both the government and the contractor by providing stability and reducing the administrative burden of frequent re-competition. For value assessment, a longer duration allows for potential economies of scale and deeper integration of services. However, it also increases the risk of scope creep, technological obsolescence, or changes in government requirements over time. The CPFF structure, combined with a long duration, necessitates vigilant oversight to ensure that costs remain controlled and that the services remain relevant and effective throughout the contract's life. Regular performance reviews and potential contract modifications will be key.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042117R0004

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $17,233,960

Exercised Options: $17,233,960

Current Obligation: $16,810,110

Actual Outlays: $116,139

Subaward Activity

Number of Subawards: 59

Total Subaward Amount: $96,322,370

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042118D0059

IDV Type: IDC

Timeline