DoD's $11.2M Engineering Services Contract Awarded to BAE Systems for Long-Term Support

Contract Overview

Contract Amount: $11,203,069 ($11.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2021-01-01

End Date: 2026-03-31

Contract Duration: 1,915 days

Daily Burn Rate: $5.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LABOR (PROC & O&M) STARS TASK ORDER

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $11.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: LABOR (PROC & O&M) STARS TASK ORDER Key points: 1. Contract awarded through 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 spans over five years, indicating a long-term need for these engineering services. 4. The contract is a delivery order under a larger task order, suggesting it's part of a broader acquisition strategy. 5. No small business set-aside was utilized, which may limit opportunities for smaller firms in this contract. 6. The contract is for engineering services, a critical component for defense operations and development.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the scope of work and the parent task order. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control. While CPFF can be appropriate for research and development or when costs are uncertain, it requires robust oversight to ensure the fixed fee remains reasonable and that costs are managed effectively. Comparing this to similar engineering services contracts within the Department of Defense would require detailed analysis of the specific services rendered and the associated labor categories and rates.

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 specific number of bidders is not provided, but this method generally fosters a competitive environment. A competitive process is expected to drive down prices and encourage innovation as contractors vie for the award. The effectiveness of the competition in achieving optimal value depends on the number and quality of the bids received.

Taxpayer Impact: Taxpayers benefit from full and open competition as it is designed to ensure the government receives the best possible value by leveraging market forces. This approach aims to prevent inflated pricing that might occur in less competitive scenarios.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations and technological advancements. This contract likely supports the development, maintenance, or enhancement of defense systems and infrastructure. The contract is being performed in New York, potentially impacting the local economy and workforce in that region. Skilled engineers and technical personnel will be engaged, contributing to the defense industrial workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractors to incur costs, requiring diligent oversight to manage expenditures.
Lack of small business participation noted, potentially missing opportunities to leverage diverse capabilities and support small business growth.
The duration of the contract (over five years) necessitates sustained monitoring to ensure continued performance and value.
As a delivery order under a task order, the full scope and potential interdependencies are not immediately clear, requiring further investigation.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
Engineering services are critical for maintaining and advancing defense capabilities.
The contractor, BAE Systems, is a well-established entity in the defense sector, implying a level of experience and capability.
The contract is for a defined period, providing clarity on the expected duration of service delivery.

Sector Analysis

Engineering services represent a significant segment of the federal contracting market, particularly within the defense sector. This contract falls under the Engineering Services (NAICS 541330) category. The Department of Defense is a major consumer of these services, utilizing them for a wide array of needs, from system design and development to testing and lifecycle support. Spending in this sector is influenced by geopolitical factors, technological advancements, and the need to maintain a modern and capable military force. Comparable spending benchmarks would typically involve analyzing the average cost per hour for similar engineering roles across various defense agencies and contract types.

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 indicated in the provided data. This means that opportunities for small businesses to directly participate in this specific contract are limited. While BAE Systems may engage small businesses as subcontractors, the absence of a formal set-aside or explicit subcontracting goals means that the direct impact on the small business ecosystem for this particular award is likely minimal. Further analysis would be needed to determine if BAE Systems has a history of subcontracting with small businesses on similar contracts.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor incurred costs against the fixed fee and ensure compliance with contract terms. Accountability measures would include performance reviews, milestone tracking, and adherence to delivery schedules. Transparency is generally facilitated through contract award databases and reporting requirements, though specific details of performance and cost breakdowns may be proprietary. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Engineering Services Contracts
BAE Systems Defense Contracts
Naval Systems Engineering Support
Cost Plus Fixed Fee Contracts
Full and Open Competition Awards

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
Limited visibility into the specific scope of work for this delivery order.
Absence of explicit small business subcontracting goals may limit opportunities for smaller firms.
Long contract duration necessitates sustained performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. LABOR (PROC & O&M) STARS TASK ORDER

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 $11.2 million.

What is the period of performance?

Start: 2021-01-01. End: 2026-03-31.

What is the historical performance record of BAE Systems Technology Solutions & Services Inc. with the Department of Defense, particularly on similar engineering services contracts?

BAE Systems Technology Solutions & Services Inc. has a substantial history of contracting with the Department of Defense. Analyzing their past performance requires delving into contract databases to identify awards for engineering services, task orders, and delivery orders. Key metrics to examine would include on-time delivery rates, adherence to budget (especially for fixed-price contracts), quality of deliverables, and any past performance evaluations or disputes. For Cost Plus Fixed Fee (CPFF) contracts specifically, their ability to manage costs effectively and justify expenditures to the government is a critical indicator. A review of their contract history would reveal their experience level with the specific types of engineering challenges faced by the Department of the Navy and their overall reliability as a contractor in the defense sector.

How does the estimated value of this delivery order compare to the average value of similar engineering services contracts awarded by the Department of the Navy?

To compare the value of this $11.2 million delivery order, one would need to identify comparable engineering services contracts awarded by the Department of the Navy. This involves filtering contract databases for the same NAICS code (541330 - Engineering Services) and similar contract types (e.g., CPFF, FFP) over a relevant timeframe. The comparison should also consider the duration of the contract and the specific services rendered. If this delivery order represents a significant portion of a larger task order, that context is also important. Without access to a comprehensive database of Navy engineering contracts and their specific scopes, a precise benchmark is difficult. However, $11.2 million for a multi-year delivery order in engineering services is not uncommon within the defense sector, but its 'value' is contingent on the criticality and complexity of the services provided.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used for this award, and how are they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor may have less incentive to control costs compared to fixed-price contracts, as the government agrees to pay all allowable costs plus a predetermined fixed fee. This can lead to cost overruns if not managed diligently. Mitigation strategies employed by the government typically include robust oversight, detailed cost accounting standards, regular audits of contractor expenditures, and clear definitions of allowable costs. The government's contracting officers must actively monitor the contractor's performance and spending, ensuring that costs are reasonable, allocable, and necessary for contract completion. The fixed fee itself is negotiated upfront, and while it doesn't increase with costs, the government bears the risk of cost escalation beyond what was anticipated.

What is the expected impact of this contract on the Department of the Navy's engineering capabilities and technological advancement?

This contract is expected to bolster the Department of the Navy's engineering capabilities by providing specialized expertise that may not be available in-house or by augmenting existing teams. The engineering services procured will likely support critical functions such as the design, development, testing, and sustainment of naval platforms, weapon systems, and associated technologies. By engaging BAE Systems, the Navy aims to leverage external innovation and specialized knowledge to accelerate technological advancement, improve system performance, and ensure the operational readiness of its fleet. The long-term nature of the contract suggests a sustained need for these services, indicating their importance in the Navy's strategic objectives for modernization and maintaining a technological edge.

How does the $11.2 million spending on this specific delivery order fit into the broader historical spending patterns for engineering services within the Department of Defense?

The $11.2 million allocated to this specific delivery order represents a component of the Department of Defense's (DoD) overall expenditure on engineering services, which typically runs into billions of dollars annually. Engineering services are a fundamental requirement for the DoD, encompassing a vast range of activities from basic research to complex system integration. This particular award, being a delivery order under a task order, suggests it's part of a larger, pre-competed framework. When viewed against the DoD's total budget and its significant investments in R&D, procurement, and sustainment, $11.2 million is a moderate sum for a multi-year engineering support contract. Historical spending patterns show a consistent and substantial demand for such services, driven by the need to maintain and modernize military hardware and systems across all branches of service.

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: TWO STEP

Solicitation ID: N0042119R0109

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: $15,892,287

Exercised Options: $15,892,287

Current Obligation: $11,203,069

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $42,136

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042121D0002

IDV Type: IDC

Timeline