Department of the Navy awards $71.4M engineering services contract to BAE Systems, highlighting potential value concerns

Contract Overview

Contract Amount: $71,434,681 ($71.4M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2021-05-04

End Date: 2026-05-03

Contract Duration: 1,825 days

Daily Burn Rate: $39.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EXCOMM TASK ORDER N00421-21-F-0412

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $71.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: EXCOMM TASK ORDER N00421-21-F-0412 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 1825 days (5 years) indicates a long-term commitment for engineering services. 4. The awardee, BAE Systems, is a large defense contractor with a significant presence in the sector. 5. The contract is for engineering services, a critical component of defense procurement. 6. No small business set-aside was utilized, indicating a focus on large prime contractors.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. While BAE Systems is a reputable contractor, the CPFF structure inherently carries risk for cost escalation. Comparing this to similar engineering services contracts awarded by the Navy or other DoD components would be necessary to assess if the pricing is competitive. The fixed fee component provides some cost certainty, but the overall cost is variable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. The specific number of bidders is not provided, but this method generally promotes price discovery and allows the government to select from a wide range of qualified contractors. The open competition suggests a healthy market for these engineering services.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the selection of the most capable contractor through an open bidding process.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations and acquisition programs. This contract likely supports various naval engineering projects, contributing to the readiness and technological advancement of naval assets. The geographic impact is centered in Maryland, where the contractor's operations are located. The contract supports a workforce of engineers and technical specialists employed by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type introduces potential for cost overruns if not rigorously managed.
Lack of specific performance metrics makes it difficult to assess the true value for money.
Long contract duration (5 years) may limit flexibility to adapt to changing technological needs or market conditions.

Positive Signals

Awarded through full and open competition, suggesting a competitive selection process.
BAE Systems is an established contractor with a proven track record in defense services.
Engineering services are critical for maintaining and advancing naval capabilities.

Sector Analysis

The engineering services sector within the defense industry is substantial, supporting a wide array of government needs from research and development to sustainment. This contract fits within the broader category of professional services procured by the Department of Defense. Comparable spending benchmarks would involve analyzing other large engineering services contracts awarded to prime defense contractors, which often run into tens or hundreds of millions of dollars annually.

Small Business Impact

The absence of a small business set-aside indicates that this contract was not specifically targeted towards small businesses. BAE Systems, as a large prime contractor, may engage small businesses as subcontractors. However, the primary awardee is not a small business, and there is no explicit requirement for subcontracting with small businesses detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Accountability measures would be tied to the contract's performance clauses and the fixed fee structure. Transparency is generally maintained through contract award databases, though detailed cost performance reports are often proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Cost Plus Fixed Fee contract type
Long contract duration
No small business set-aside

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $71.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. EXCOMM TASK ORDER N00421-21-F-0412

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 $71.4 million.

What is the period of performance?

Start: 2021-05-04. End: 2026-05-03.

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

Analyzing the historical spending patterns for BAE Systems Technology Solutions & Services Inc. with the Department of the Navy reveals a consistent and significant relationship. BAE Systems is a major defense contractor, and the Navy frequently awards them contracts across various service categories, including engineering, IT, and logistics. Specific data for this task order shows a $71.4 million award. To provide a comprehensive historical view, one would need to aggregate all contracts awarded to this entity by the Navy over several fiscal years, looking at trends in contract values, types (e.g., FFP, CPFF), and the services procured. This would help contextualize the current award within their overall portfolio and identify any shifts in spending focus or magnitude.

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 for engineering services, particularly when the scope of work involves significant uncertainties or evolving requirements, as is often the case in defense acquisition. Compared to other Navy engineering contracts, CPFF awards allow the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. This contrasts with Firm-Fixed-Price (FFP) contracts, which offer greater cost certainty to the government but place more risk on the contractor. While CPFF can incentivize contractor efficiency through cost control, it also carries a risk of cost growth if not managed diligently. Benchmarking this specific CPFF award against similar engineering services contracts would involve examining the ratio of fixed fee to total estimated cost, the historical cost performance of similar contracts, and the effectiveness of government oversight in managing cost ceilings.

What are the primary risks associated with a $71.4 million engineering services contract awarded to a large prime contractor like BAE Systems?

The primary risks associated with a $71.4 million engineering services contract awarded to a large prime contractor like BAE Systems include potential cost overruns due to the Cost Plus Fixed Fee (CPFF) structure, which allows for the recovery of allowable costs. If cost controls are weak or scope creep occurs without proper modification, the total expenditure could exceed initial estimates. Another risk is contractor performance; while BAE Systems is a large, established entity, ensuring consistent quality and timely delivery of complex engineering services requires robust oversight. There's also a risk of over-reliance on a single large contractor, potentially limiting future competition or innovation. Finally, ensuring that the fixed fee adequately reflects the value delivered and the risk undertaken by the contractor is crucial for fair pricing.

What is the expected program effectiveness or outcome of these engineering services for the Department of the Navy?

The expected program effectiveness and outcomes of these engineering services for the Department of the Navy are centered on enhancing naval capabilities, supporting acquisition programs, and ensuring the operational readiness of assets. These services likely encompass a range of activities such as system design, integration, testing, technical analysis, and lifecycle support for naval platforms and systems. The ultimate goal is to ensure that the Navy receives technically sound, cost-effective, and timely engineering solutions that meet its strategic and operational requirements. Success would be measured by the successful completion of engineering tasks, the quality of technical documentation and deliverables, the contribution to program milestones, and the overall impact on the performance and longevity of the systems being supported.

How does the 'full and open competition' award method influence the overall value proposition for taxpayers on this contract?

The 'full and open competition' award method is designed to maximize value for taxpayers by fostering a competitive environment. This approach theoretically allows the government to solicit proposals from all responsible sources, leading to a wider range of technical solutions and potentially lower prices due to market forces. For taxpayers, this means that the $71.4 million awarded to BAE Systems is likely the result of a process where multiple companies vied for the contract, driving down costs compared to a sole-source or limited competition scenario. While the Cost Plus Fixed Fee structure introduces some cost uncertainty, the initial competitive bidding process aims to establish a baseline for fair pricing and ensure that the selected contractor offers the best overall value in terms of technical capability and cost-effectiveness.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - DATA CENTER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042118R0072

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: $97,570,081

Exercised Options: $97,430,012

Current Obligation: $71,434,681

Actual Outlays: $3,548,418

Subaward Activity

Number of Subawards: 67

Total Subaward Amount: $19,235,690

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0042121D0018

IDV Type: IDC

Timeline