BAE Systems awarded $23.5M ceiling for Navy engineering services, highlighting significant defense sector investment

Contract Overview

Contract Amount: $23,548,488 ($23.5M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2020-07-20

End Date: 2024-07-19

Contract Duration: 1,460 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CPFF LABOR CEILING FOR CLINS 0002-0005

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $23.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: CPFF LABOR CEILING FOR CLINS 0002-0005 Key points: 1. Contract value represents a substantial commitment to specialized engineering expertise within the defense sector. 2. The full and open competition suggests a healthy market for these services, potentially driving competitive pricing. 3. Delivery order structure indicates flexibility in tasking and resource allocation for evolving defense needs. 4. The Cost Plus Fixed Fee (CPFF) pricing structure requires careful monitoring to ensure cost control and value. 5. Focus on engineering services points to critical support for naval platforms and technological advancements. 6. The contract duration of 1460 days allows for sustained support and project continuity.

Value Assessment

Rating: good

The ceiling of $23.5 million for engineering services over approximately four years suggests a moderate investment. Benchmarking against similar large-scale engineering contracts within the Department of Defense is necessary for a precise value assessment. However, the CPFF structure necessitates diligent oversight to ensure costs remain aligned with the value delivered and market rates for comparable engineering expertise.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. This competitive environment is generally favorable for price discovery and ensures the government can select from a range of capable providers. The specific number of bidders is not provided, but the designation implies a robust selection process.

Taxpayer Impact: Full and open competition typically leads to more favorable pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The Department of the Navy benefits from specialized engineering services crucial for maintaining and upgrading naval assets. This contract supports the development and sustainment of advanced defense technologies and platforms. The primary geographic impact is likely within areas supporting naval operations and BAE Systems' operational centers. The contract supports a workforce of skilled engineers and technical professionals within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contracts require robust oversight to prevent cost overruns and ensure fair pricing.
The specific engineering tasks and their criticality are not detailed, posing a potential risk if not managed effectively.
Reliance on a single contractor for a significant ceiling necessitates contingency planning.

Positive Signals

Awarded through full and open competition, suggesting a competitive and potentially cost-effective process.
The extended duration allows for continuity of essential engineering services.
The contract supports critical defense capabilities for the U.S. Navy.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense industry. The market for defense engineering services is characterized by high technical requirements, stringent security protocols, and significant government investment. Spending in this area is driven by the need to maintain technological superiority, modernize aging platforms, and develop next-generation defense capabilities. Comparable spending benchmarks would typically be found within large defense procurement databases, often involving multi-billion dollar programs.

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 will depend on BAE Systems' procurement practices and the specific requirements of the engineering tasks awarded under this contract.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Navy, likely through contracting officers and program managers. Accountability measures are inherent in the CPFF structure, requiring detailed cost reporting and justification. Transparency is facilitated through contract award databases, though specific performance metrics and detailed cost breakdowns may be subject to confidentiality. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Defense Advanced Research Projects Agency (DARPA) Projects
Air Force Research Laboratory Contracts
Combat Systems Engineering Support

Risk Flags

Cost Control Risk (CPFF)
Scope Creep Potential
Dependency on Single Contractor
Technical Performance Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. CPFF LABOR CEILING FOR CLINS 0002-0005

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 $23.5 million.

What is the period of performance?

Start: 2020-07-20. End: 2024-07-19.

What is the historical spending pattern for BAE Systems Technology Solutions & Services Inc. with the Department of the Navy for engineering services?

Analyzing historical spending for BAE Systems Technology Solutions & Services Inc. with the Department of the Navy for engineering services requires access to comprehensive federal procurement data. Typically, such an analysis would involve querying databases like FPDS or USASpending to identify all contracts awarded to this specific entity by the Navy within the 'Engineering Services' NAICS code (541330) or similar categories. The data would be aggregated by fiscal year to show trends in contract values, types (e.g., CPFF, FFP), and durations. This would reveal if the current $23.5 million ceiling is an increase, decrease, or consistent with past awards, providing context on the company's sustained role and the Navy's ongoing reliance on their services in this domain. It would also highlight any significant shifts in the scope or scale of engineering support provided over time.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to other engineering service contracts awarded by the Navy?

The Cost Plus Fixed Fee (CPFF) structure allows the contractor to recover allowable costs plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or is expected to evolve, as is common in complex engineering projects. Comparing this to other Navy engineering contracts would involve examining the prevalence of CPFF versus other contract types like Firm-Fixed-Price (FFP) or Time and Materials (T&M). If CPFF is common for similar engineering services, it suggests this is a standard approach for managing uncertainty. However, if FFP contracts are more prevalent for comparable services, it might indicate that the Navy is foregoing potential cost savings from fixed-price arrangements in favor of flexibility, or that the nature of these specific engineering tasks makes FFP less suitable. A higher proportion of CPFF contracts could also signal a higher perceived risk in cost estimation by contractors.

What are the key performance indicators (KPIs) typically associated with engineering services contracts for the Department of the Navy?

Key Performance Indicators (KPIs) for Department of the Navy engineering services contracts often revolve around technical performance, schedule adherence, cost control, and quality. For a contract like this, KPIs might include metrics such as the successful completion of design reviews, the timely delivery of engineering drawings and specifications, adherence to budget targets (especially crucial for CPFF), the number of technical issues resolved, and the overall quality of engineering solutions provided. Customer satisfaction surveys from the Navy program office are also common. For a CPFF contract, KPIs related to cost efficiency and the justification of incurred costs are paramount. Failure to meet these KPIs can lead to contract modifications, reduced fees, or even termination, underscoring their importance in ensuring value and mission success.

What is the potential impact of this contract on the competitive landscape for defense engineering services?

The award of a significant contract like this to BAE Systems, especially under full and open competition, can have several impacts on the defense engineering services landscape. Firstly, it validates BAE Systems' capabilities and strengthens its position as a key provider in this niche. Secondly, the fact that it was competed openly suggests that other firms were capable of bidding, potentially indicating a healthy level of competition. However, the success of BAE Systems might make it more challenging for smaller or less established competitors to win similar large-scale contracts in the future without demonstrating exceptional value or specialization. It also signals to the market the types of engineering services the Navy prioritizes, potentially influencing strategic investments and service offerings by other companies in the sector.

Are there any specific technological advancements or platforms this contract is likely supporting?

While the provided data does not specify the exact platforms or technological advancements supported by this contract, engineering services for the Department of the Navy typically encompass a wide range of critical areas. These could include the design, development, integration, testing, and sustainment of naval platforms such as surface ships (e.g., destroyers, carriers), submarines, and potentially aircraft or unmanned systems. Specific technological areas might involve advanced combat systems, propulsion systems, cybersecurity solutions, electronic warfare capabilities, sonar and radar systems, or naval architecture and marine engineering. The 'Engineering Services' NAICS code (541330) is broad, suggesting support could range from foundational research and development to detailed system engineering and lifecycle support for existing or future naval assets.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042116R0073

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 520 GAITHER RD, 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: $23,933,922

Exercised Options: $23,933,922

Current Obligation: $23,548,488

Actual Outlays: $4,086,556

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $9,974,271

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042119D0077

IDV Type: IDC

Timeline