DoD's $9.18M Engineering Services Contract Awarded to BAE Systems for Naval Support

Contract Overview

Contract Amount: $9,175,627 ($9.2M)

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: $4.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: LABOR (RDT&E, PROC, O&M, & WCF) ATC&LS TASK ORDER

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $9.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: LABOR (RDT&E, PROC, O&M, & WCF) ATC&LS TASK ORDER 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. The duration of the contract is over 5 years, indicating a long-term need for these engineering services. 4. The primary agency is the Department of the Navy, highlighting a focus on naval engineering requirements. 5. The North American Industry Classification System (NAICS) code 541330 points to engineering services, a critical sector for defense. 6. The contract is not set aside for small businesses, meaning larger firms were likely the primary bidders.

Value Assessment

Rating: fair

Benchmarking the value of this $9.18 million contract is challenging without more specific service details and comparable contract data. The Cost Plus Fixed Fee (CPFF) structure means the final cost could exceed the initial estimate, requiring close oversight to ensure value for money. While BAE Systems is a large defense contractor, the CPFF pricing model inherently carries more risk for the government compared to fixed-price contracts.

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 price discovery and encourages competitive pricing. The Department of the Navy's approach suggests a desire to leverage the broadest possible market for these engineering services.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible price and quality through a wide range of potential providers.

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 naval systems and infrastructure. The geographic impact is primarily within Maryland, where the contractor is located, but the services may support naval operations globally. The contract supports a workforce skilled in engineering and technical services, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns if not rigorously managed.
Long contract duration (over 5 years) requires sustained oversight to ensure continued value and performance.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess effectiveness.
No small business set-aside may limit opportunities for smaller, specialized firms in the engineering sector.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield reasonable pricing.
BAE Systems is a well-established defense contractor with a significant track record in engineering services.
The contract addresses a clear need within the Department of the Navy for engineering expertise.
The fixed fee component of the CPFF contract provides some level of cost certainty for the contractor's profit.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for research, development, testing, evaluation, and sustainment of complex military systems. Spending in this sector is often characterized by long-term relationships, specialized expertise, and significant government oversight due to the sensitive nature of the work.

Small Business Impact

This contract was not set aside for small businesses, indicating that the competition was open to all eligible firms, likely favoring larger, established contractors like BAE Systems. There is no explicit information on subcontracting plans for small businesses. This approach may limit direct opportunities for small businesses to participate in this specific contract, though they may be involved as subcontractors to the prime if such provisions are included in the contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. The Cost Plus Fixed Fee structure necessitates close monitoring of costs incurred by BAE Systems to ensure they align with the contract's objectives and the fixed fee. Transparency would be enhanced through regular reporting requirements and potential audits by government agencies or the Defense Contract Audit Agency (DCAA).

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Support Services
BAE Systems Defense Contracts
Cost Plus Fixed Fee Contracts
Engineering Services for Military Applications

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Long contract duration necessitates sustained performance monitoring and adaptability to changing requirements.
Lack of specific performance metrics in the provided data hinders a definitive assessment of value.
Potential for scope creep in engineering services contracts requires robust change management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. LABOR (RDT&E, PROC, O&M, & WCF) ATC&LS 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 $9.2 million.

What is the period of performance?

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

What is the historical spending pattern for similar engineering services contracts awarded by the Department of the Navy?

Analyzing historical spending for similar engineering services contracts by the Department of the Navy requires access to detailed contract databases. Generally, the Navy procures a wide range of engineering support, from RDT&E to sustainment, often through multi-year contracts. Spending patterns can fluctuate based on modernization priorities, fleet readiness needs, and budget allocations. Contracts for specialized engineering services, especially those involving complex platforms or systems, can range from a few million to hundreds of millions of dollars. The prevalence of Cost Plus Fixed Fee (CPFF) contracts in RDT&E and complex development efforts is notable, though the Navy also utilizes fixed-price contracts for more defined scopes of work. Understanding specific historical trends would involve examining award data for NAICS code 541330 within the Navy, looking at average contract values, durations, and the types of services procured over time.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of risk and value for this type of service?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves significant research and development, making it suitable for complex engineering services. For the government, the primary risk is that actual costs could exceed initial estimates, although the fixed fee provides some predictability for the contractor's profit. This structure incentivizes the contractor to control costs to some extent, as the fee is fixed, but it requires robust government oversight to prevent unnecessary expenditures. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty for the buyer. Compared to Cost Plus Incentive Fee (CPIF), where profit is adjusted based on performance, CPFF offers a stable profit margin. For taxpayers, CPFF contracts generally represent a higher risk of cost escalation than FFP, necessitating strong program management and auditing.

What is BAE Systems' track record with similar Department of the Navy engineering contracts?

BAE Systems is a major defense contractor with a substantial history of performing engineering services for the Department of the Navy and other military branches. Their track record typically includes a wide array of support, from platform design and integration to systems engineering and lifecycle support. While specific performance details for every contract are not publicly available, BAE Systems generally holds a strong position in the defense sector, often winning large, complex contracts. Government contract databases and performance review systems (like the Contractor Performance Assessment Reporting System - CPARS) would contain more granular data on their past performance, including any issues related to cost, schedule, or quality on previous Navy contracts. Their continued success in winning competitive bids suggests a generally positive performance history.

What are the potential performance risks associated with this specific contract's duration and scope?

The primary performance risks associated with this contract stem from its long duration (over 5 years) and the inherent uncertainties of engineering services, especially if the scope involves evolving technologies or complex system integration. Key risks include potential scope creep, where requirements expand beyond the original agreement, leading to cost and schedule overruns. Maintaining consistent quality and technical expertise over such a long period can also be challenging. Furthermore, if the contract involves classified or highly specialized work, personnel turnover or security issues could pose risks. The Cost Plus Fixed Fee structure, while providing flexibility, can sometimes reduce the contractor's incentive to innovate for efficiency if not carefully managed. Effective risk mitigation requires clear communication, robust change control processes, and proactive program management from both the contractor and the Navy.

How does the engineering services market (NAICS 541330) typically function within the defense sector?

The engineering services market within the defense sector, categorized under NAICS 541330, is characterized by high technical complexity, stringent security requirements, and long-term relationships between government agencies and contractors. Companies in this space provide critical expertise for the design, development, testing, integration, and sustainment of military platforms and systems. Competition can be intense, particularly for large, high-profile contracts, often involving extensive pre-qualification processes. Contractors must demonstrate specialized capabilities, a strong security posture, and a proven ability to manage complex projects within budget and schedule constraints. The market is dominated by large defense primes and specialized engineering firms, with significant subcontracting opportunities for smaller, niche providers. Government oversight is typically extensive, involving technical reviews, audits, and performance assessments.

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: 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: $26,048,700

Exercised Options: $23,198,820

Current Obligation: $9,175,627

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $8,764,762

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