DoD Awards BAE Systems $30M for Engineering Services, Facing Potential Cost Overruns

Contract Overview

Contract Amount: $30,125,439 ($30.1M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2020-03-01

End Date: 2024-02-29

Contract Duration: 1,460 days

Daily Burn Rate: $20.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TECHNICAL AND ENGINEERING SERVICES

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $30.1 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: TECHNICAL AND ENGINEERING SERVICES Key points: 1. Significant contract value of $30.1M awarded to a major defense contractor. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type (Cost Plus Fixed Fee) carries inherent risk of cost escalation. 4. Services fall under Engineering Services within the Defense sector.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee contract type allows for cost reimbursement plus a fixed fee, which can lead to higher final costs than fixed-price contracts if not managed closely. The base award of $30.1M is substantial, and the potential for overruns needs careful monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. This method generally promotes price discovery and can lead to more competitive pricing, although the contract type may still influence the final cost.

Taxpayer Impact: While competition was employed, the Cost Plus Fixed Fee structure necessitates vigilant oversight to ensure taxpayer funds are used efficiently and costs are controlled.

Public Impact

Ensures continued engineering support for critical Department of the Navy programs. Supports advanced technological development and maintenance within the defense sector. Potential for increased costs due to contract type could impact overall defense budget allocation. Job creation and economic activity for BAE Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type increases risk of cost overruns.
No small business participation noted, potentially limiting broader economic impact.
Base award is significant, requiring close monitoring of task orders.

Positive Signals

Awarded under full and open competition, promoting a competitive environment.
Long duration (1460 days) suggests a stable, ongoing need for services.
Contract supports critical Department of the Navy engineering requirements.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense industry. Spending in this area is often driven by complex system development, maintenance, and modernization efforts. Benchmarks for similar engineering services contracts vary widely based on scope and complexity.

Small Business Impact

The data indicates that small business participation was not a factor in this specific award (sb: false). This suggests the prime contractor, BAE Systems, will likely handle the majority of the work, potentially limiting opportunities for small businesses to subcontract on this particular contract.

Oversight & Accountability

Oversight will be crucial given the Cost Plus Fixed Fee structure. The Department of the Navy must ensure robust monitoring of expenditures, performance, and adherence to the fixed fee to prevent cost creep and ensure value for money. Task order management is key to accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Potential for cost overruns.
Lack of small business participation.
Significant contract value requires close monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.1 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. TECHNICAL AND ENGINEERING SERVICES

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 $30.1 million.

What is the period of performance?

Start: 2020-03-01. End: 2024-02-29.

What is the projected total value of the contract, including all potential option periods or task orders, and how does this compare to similar engineering service contracts awarded by the DoD?

The current base award is $30,125,439.34. Without information on potential option periods or task orders, the total projected value is unknown. A comprehensive comparison would require analyzing the scope, duration, and specific technical requirements of similar DoD engineering service contracts, as well as the pricing structures employed.

What specific risks are associated with the Cost Plus Fixed Fee (CPFF) contract type in this context, and what mitigation strategies are in place to manage potential cost overruns?

The primary risk with CPFF is the contractor's incentive to increase costs, as their fee is fixed regardless of the actual expenses incurred. Mitigation strategies should include stringent cost accounting standards, detailed review of all incurred costs, clear definition of allowable costs, and proactive project management to identify and address potential cost drivers early.

How effectively does this contract contribute to the Department of the Navy's long-term engineering capabilities and technological advancement goals?

The effectiveness hinges on the specific technical services provided by BAE Systems. If the contract supports critical research, development, or sustainment of advanced naval systems, it likely contributes positively. Regular performance reviews and alignment with strategic naval objectives are necessary to ensure it meets long-term goals.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042118R0024

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

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: $36,367,050

Exercised Options: $36,367,050

Current Obligation: $30,125,439

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $1,773,919

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042119D0001

IDV Type: IDC

Timeline