DoD awards BAE Systems $43M for engineering services, with a 5-year contract duration

Contract Overview

Contract Amount: $42,991,415 ($43.0M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2021-08-02

End Date: 2026-08-01

Contract Duration: 1,825 days

Daily Burn Rate: $23.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NEW ATCLS LEGACY & SPN TASK ORDER AND OBLIGATE FUNDS

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $43.0 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: NEW ATCLS LEGACY & SPN TASK ORDER AND OBLIGATE FUNDS Key points: 1. Contract value of $43 million over five years suggests a significant but not exceptionally large engagement for engineering services. 2. The contract was awarded under full and open competition, indicating a competitive bidding process. 3. The Cost Plus Fixed Fee (CPFF) pricing structure carries inherent risk of cost overruns, requiring close oversight. 4. The contract is for engineering services, a broad category that could encompass various technical support functions. 5. The duration of 1825 days (5 years) allows for long-term planning and sustained support. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: fair

The contract value of $43 million over five years averages to approximately $8.6 million per year. Without specific details on the scope of engineering services, direct comparison to similar contracts is challenging. However, for specialized engineering support within the Department of Defense, this annual value appears within a reasonable range, though the CPFF structure warrants scrutiny for potential cost efficiencies. Benchmarking against market rates for comparable engineering services would provide a clearer picture of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the 'full and open' designation generally implies a robust competitive environment. This approach is intended to foster price discovery and ensure the government receives competitive pricing by allowing a wide range of qualified contractors to participate.

Taxpayer Impact: A competitive award process like this typically benefits taxpayers by driving down costs through market forces, ensuring that the selected contractor offers the best value proposition.

Public Impact

The Department of Defense, specifically the Department of the Navy, is the primary beneficiary of these engineering services. The services delivered are likely to support naval operations, research, development, or maintenance through specialized engineering expertise. The geographic impact is centered around the contractor's operational base and the Navy's facilities, likely within Maryland (MD) as indicated by the 'st' field. Workforce implications include employment opportunities for engineers and technical staff at BAE Systems Technology Solutions & Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently.
Lack of specific details on the engineering services provided makes it difficult to assess performance metrics and potential risks.
The absence of small business participation could limit opportunities for smaller, specialized firms in the defense supply chain.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair pricing.
Long contract duration (5 years) provides stability and allows for sustained support to the agency.
BAE Systems is a large, established defense contractor with a significant track record, implying a level of reliability.

Sector Analysis

Engineering services represent a critical sector supporting various government functions, particularly in defense, aerospace, and technology. The market for defense engineering services is substantial, driven by the need for specialized expertise in complex systems development, maintenance, and modernization. This contract fits within the broader category of professional services procured by the Department of Defense, aligning with spending benchmarks for technical support and system integration. Comparable spending often involves contracts for research, development, testing, and evaluation (R&DTE) services.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). This indicates that the procurement was not specifically designed to award a portion of the work to small businesses. Consequently, the direct impact on the small business ecosystem may be limited, although BAE Systems, as the prime contractor, might engage small businesses as subcontractors. The extent of subcontracting to small businesses would depend on BAE Systems' internal policies and the specific requirements of the engineering services needed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the CPFF contract terms, requiring BAE Systems to adhere to performance standards and cost controls. Transparency is facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

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

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type carries inherent risk of cost escalation.
Lack of specific service details hinders comprehensive performance and value assessment.
Long contract duration may expose the government to risks of technological obsolescence or shifting priorities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.0 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. NEW ATCLS LEGACY & SPN TASK ORDER AND OBLIGATE FUNDS

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 $43.0 million.

What is the period of performance?

Start: 2021-08-02. End: 2026-08-01.

What is the specific nature of the engineering services being provided under this contract?

The provided data indicates the contract is for 'Engineering Services' (nd: Engineering Services) under NAICS code 541330. However, the specific tasks, deliverables, and technical areas covered by these services are not detailed in the summary data. These services could range from systems engineering, design, analysis, testing, to technical support for naval platforms or systems. Without further documentation, the precise scope remains undefined, making it difficult to assess the contract's alignment with specific naval requirements or technological advancements.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar engineering services?

The Cost Plus Fixed Fee (CPFF) structure is common for complex projects where the scope is not fully defined at the outset, allowing for flexibility. However, it places the risk of cost overruns primarily on the government, as the contractor is reimbursed for allowable costs plus a fixed fee. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can be more appropriate for R&D or services requiring significant adaptation. Other contract types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives to manage costs more effectively than pure CPFF.

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

BAE Systems is a major defense contractor with extensive experience in providing engineering and technical services to the Department of Defense across various branches, including the Navy. They have a history of managing large, complex contracts, often involving systems integration, platform modernization, and advanced technology development. While specific performance metrics for this particular contract are not available, BAE Systems' overall track record suggests they possess the capability and infrastructure to execute such engagements. However, like any large contractor, past performance reviews and contract closeouts would offer a more granular view of their success rates and any challenges encountered.

What are the potential risks associated with the 5-year duration of this contract?

A 5-year contract duration, while providing stability, carries risks related to evolving technological landscapes and changing defense priorities. Technology can become obsolete, rendering the services less relevant or requiring costly modifications. Furthermore, shifts in strategic objectives or budget allocations within the DoD could impact the necessity or funding of the services. For the contractor, long-term commitments can also present challenges in resource planning and adapting to unforeseen market changes. Effective contract management, including regular reviews and potential scope adjustments, is crucial to mitigate these risks.

How does the $43 million obligation compare to historical spending on engineering services by the Department of the Navy?

The $43 million obligation for this specific contract represents a portion of the Department of the Navy's overall spending on engineering services. The Navy procures a vast array of engineering support, encompassing everything from ship design and maintenance to advanced weapons systems development and IT infrastructure. Annual spending on such services can run into billions of dollars. Therefore, $43 million, while substantial for a single task order, is likely a moderate component within the Navy's broader engineering services budget. A comprehensive analysis would require examining historical spending trends for similar NAICS codes and contract types within the Navy.

What oversight mechanisms are in place to ensure value for money with a CPFF contract?

Ensuring value for money with a CPFF contract relies heavily on robust oversight. Key mechanisms include detailed cost monitoring and auditing by the government's contracting officer and administrative contracting officer (ACO). They review contractor expenditures, verify allowability, allocability, and reasonableness of costs, and ensure adherence to the fixed fee. Performance metrics, milestones, and deliverables are tracked closely. Regular progress reviews, technical evaluations, and potentially the use of incentive clauses (if structured within the CPFF framework, though less common) help manage performance and cost. Transparency in reporting and the potential involvement of the Defense Contract Audit Agency (DCAA) further bolster oversight.

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: N0042120R0119

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: $47,198,687

Exercised Options: $47,195,531

Current Obligation: $42,991,415

Subaward Activity

Number of Subawards: 80

Total Subaward Amount: $5,977,589

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042121D0017

IDV Type: IDC

Timeline