DoD awards $41.6M engineering services contract to BAE Systems, with 5 years of performance

Contract Overview

Contract Amount: $41,558,992 ($41.6M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2020-09-30

End Date: 2025-09-27

Contract Duration: 1,823 days

Daily Burn Rate: $22.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER AND INCREMENTAL FUNDING

Place of Performance

Location: RONKONKOMA, SUFFOLK County, NEW YORK, 11779

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $41.6 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: TASK ORDER AND INCREMENTAL FUNDING Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. Performance period extends over 1823 days, indicating a long-term need for these engineering services. 4. The contract is for engineering services, a critical component for defense readiness and technological advancement. 5. The awardee, BAE Systems, is a major defense contractor with a significant presence in the sector. 6. No small business set-aside was indicated, suggesting the primary award was not targeted towards small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. The fixed fee component provides some cost certainty for the contractor's profit, but the cost-reimbursement aspect requires diligent oversight to prevent excessive spending. Comparing this to similar engineering services contracts awarded by the Department of the Navy would provide a clearer picture of whether the pricing structure is competitive and offers good value for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this method generally fosters price discovery and encourages competitive pricing. The open nature of the competition suggests that the Department of the Navy sought the best value from a wide range of potential providers.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it is expected to drive down costs through market forces and ensure that the government receives competitive pricing for its needs.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its technological and operational requirements. Services delivered likely include design, development, testing, and integration of complex systems. The geographic impact is primarily associated with BAE Systems' operations in New York, where the contract is registered. Workforce implications include employment opportunities for engineers and technical staff within BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost escalation if not rigorously managed.
Lack of specific performance metrics makes it difficult to assess the efficiency and effectiveness of the services provided.
The long performance period could expose the contract to scope creep or evolving technological requirements that may not be adequately addressed.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield favorable pricing.
BAE Systems is a well-established defense contractor with a proven track record, implying a lower risk of contractor failure.
The contract addresses engineering services, which are crucial for maintaining and advancing defense capabilities.

Sector Analysis

The engineering services sector within the defense industry is highly specialized and critical for maintaining technological superiority. This contract fits within the broader category of professional, scientific, and technical services, which is a significant segment of federal spending. Comparable spending benchmarks would involve analyzing other large engineering support contracts awarded by the Department of Defense or other federal agencies for similar types of services.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside. This suggests that the primary contract was likely awarded to a large business, BAE Systems. There is no explicit information on subcontracting plans for small businesses, which would be a key area to investigate to understand the impact on the small business ecosystem. Without specific subcontracting goals, it's difficult to assess the extent to which small businesses will benefit from this award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Accountability measures would be tied to the terms and conditions of the Cost Plus Fixed Fee contract, including adherence to the fixed fee and cost ceilings. Transparency is often limited in defense contracts due to national security considerations, but contract award data is generally publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Engineering Services
Naval Systems Support Contracts
BAE Systems Federal Contracts
Cost Plus Fixed Fee Contracts
Professional, Scientific, and Technical Services

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to control costs.
Long performance period may increase risk of scope creep and technological obsolescence.
No explicit small business subcontracting goals mentioned, potentially limiting small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.6 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. TASK ORDER AND INCREMENTAL FUNDING

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 $41.6 million.

What is the period of performance?

Start: 2020-09-30. End: 2025-09-27.

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

Analyzing the historical spending patterns for BAE Systems Technology Solutions & Services Inc. with the Department of Defense for engineering services would involve reviewing past contract awards and task orders. This would help establish a baseline for their typical contract values, types, and durations. For instance, understanding if they consistently receive Cost Plus Fixed Fee contracts or if they have a history of large-scale engineering support awards would provide context. It would also be beneficial to see if their performance on previous contracts has been consistently rated positively, which could justify their selection for this current $41.6 million award. Without access to a comprehensive historical database, a precise analysis is not possible, but general trends can be inferred from their status as a major defense contractor.

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

The Cost Plus Fixed Fee (CPFF) contract structure is common in defense contracting, particularly for services where the scope of work may evolve or is difficult to define precisely upfront. For engineering services, CPFF allows the contractor to be reimbursed for allowable costs plus a predetermined fixed fee representing profit. Compared to other Navy engineering contracts, CPFF contracts generally offer less cost certainty for the government than Fixed Price contracts. However, they provide flexibility for the contractor to adapt to changing requirements. The Navy may opt for CPFF when the technical risks are high or when detailed cost estimation is challenging. A comparative analysis would involve examining the proportion of CPFF contracts versus other types (e.g., Firm-Fixed-Price, Cost Plus Incentive Fee) awarded by the Navy for similar engineering services to understand the prevalence and perceived value of this structure.

What are the potential risks associated with the 1823-day performance period for this contract?

A performance period of 1823 days (approximately five years) for an engineering services contract carries several potential risks. Firstly, the longer duration increases the likelihood of scope creep, where the project's requirements expand beyond the original agreement, potentially leading to cost overruns if not managed effectively through contract modifications. Secondly, technological advancements within the five-year timeframe could render the initial engineering solutions obsolete or less efficient, requiring costly updates or redesigns. Thirdly, the extended period might lead to a decline in contractor performance or responsiveness if oversight is not consistently rigorous. Finally, economic fluctuations or changes in defense priorities could impact the necessity or funding of the services over such a long span, potentially leading to contract adjustments or termination.

What is the significance of BAE Systems being awarded this contract in the context of the broader defense engineering market?

The award of this $41.6 million contract to BAE Systems signifies their continued importance and capability within the defense engineering market. BAE Systems is a major global defense contractor, and securing such contracts reinforces their position as a key provider of engineering solutions to the U.S. Department of Defense. This award suggests that the Navy views BAE Systems as having the necessary expertise, resources, and track record to fulfill critical engineering requirements. In the broader market, it highlights the ongoing demand for advanced engineering services in areas such as naval systems, and it underscores the competitive landscape where large, established firms like BAE Systems often dominate significant portions of federal spending due to their capacity and specialized knowledge.

How does the 'full and open competition' award method impact the potential for cost savings for the taxpayer?

The 'full and open competition' award method is designed to maximize cost savings for the taxpayer by leveraging market forces. By allowing all responsible sources to submit bids, the government creates a competitive environment where contractors are incentivized to offer their best prices and most efficient solutions to win the contract. This process typically leads to a more robust price discovery mechanism compared to sole-source or limited competition scenarios. While the specific savings cannot be quantified without a baseline comparison, the principle behind full and open competition is that it drives down costs through rivalry, ensuring that the government obtains services at a price that reflects the competitive market value, thereby benefiting taxpayers.

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

Solicitation ID: N0042119R0105

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, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $44,955,008

Exercised Options: $44,955,008

Current Obligation: $41,558,992

Actual Outlays: $41

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $2,739,139

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0042120D0117

IDV Type: IDC

Timeline