DoD's $8.9M Engineering Services Contract Awarded to BAE Systems for Naval Support

Contract Overview

Contract Amount: $8,939,276 ($8.9M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2021-05-01

End Date: 2026-09-30

Contract Duration: 1,978 days

Daily Burn Rate: $4.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ESTABLISH TO 4697 AND IF CLINS 0001 AND 1001

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $8.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ESTABLISH TO 4697 AND IF CLINS 0001 AND 1001 Key points: 1. Contract value represents a significant investment in specialized engineering capabilities. 2. BAE Systems, a major defense contractor, brings substantial experience to this engagement. 3. The contract's duration suggests a long-term need for these engineering services. 4. Performance is tied to specific CLINs, indicating a structured approach to service delivery. 5. The award was made under full and open competition, implying a competitive bidding process. 6. The cost-plus-fixed-fee structure allows for flexibility while managing contractor profit.

Value Assessment

Rating: good

The contract value of $8.9 million over approximately five years for engineering services appears reasonable given the scope and duration. Benchmarking against similar large-scale engineering support contracts for naval systems suggests this is within a typical range. The cost-plus-fixed-fee (CPFF) pricing structure, while allowing for flexibility, requires careful monitoring of costs to ensure value for money. Without specific details on the labor categories and hours, a precise per-unit cost comparison is difficult, but the overall award size is consistent with complex defense engineering requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive pricing. The Department of the Navy likely sought proposals that best met technical requirements and offered competitive pricing, suggesting a robust selection process.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the government's investment in critical engineering services.

Public Impact

The primary beneficiaries are the Department of the Navy, receiving essential engineering support for its operations. Services delivered likely include design, analysis, testing, and technical support for naval systems. The contract's focus on Maryland suggests a concentration of impact within that geographic region. The contract supports a workforce of skilled engineers and technical professionals employed by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize cost overruns if not closely managed.
The long duration of the contract may lead to scope creep if not adequately defined and controlled.

Positive Signals

Awarded through full and open competition, suggesting a competitive market for these services.
BAE Systems is a well-established defense contractor with a proven track record.
The contract specifies clear performance periods and delivery orders, aiding in performance tracking.

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, dominated by large, experienced contractors like BAE Systems. Spending in this sector is driven by the need for advanced technological development, system sustainment, and modernization of military platforms. Comparable spending benchmarks would typically involve multi-million dollar contracts for specialized engineering support across various defense agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, as a large prime contractor, BAE Systems may engage small businesses as subcontractors for specialized services, contributing to the small business ecosystem, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Navy. Performance monitoring, cost tracking, and adherence to contract terms are key oversight mechanisms. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Defense Advanced Research Projects Agency (DARPA) Projects
Air Force Research Laboratory Contracts

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Risk of scope creep due to long contract duration.
Dependence on a single large contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ESTABLISH TO 4697 AND IF CLINS 0001 AND 1001

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 $8.9 million.

What is the period of performance?

Start: 2021-05-01. End: 2026-09-30.

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

BAE Systems Technology Solutions & Services Inc. has a substantial track record with the Department of Defense, frequently securing contracts for a wide array of engineering, technical, and support services. They are a major defense contractor known for supporting complex platforms and systems across multiple military branches. Their history includes numerous awards for research, development, systems integration, and sustainment, often involving significant dollar values and long-term performance periods. Analyzing their past performance on similar Cost Plus Fixed Fee (CPFF) contracts would reveal their ability to manage costs and deliver within defined parameters, providing context for this specific award.

How does the $8.9 million value compare to other engineering services contracts awarded by the Department of the Navy?

The $8.9 million contract value for engineering services awarded to BAE Systems is a moderate-sized award within the Department of the Navy's extensive contracting portfolio. The Navy frequently awards contracts for engineering support that range from a few million dollars for specialized tasks to hundreds of millions or even billions for large-scale platform development or sustainment programs. This specific award, spanning approximately five years, suggests a focused scope of work rather than a comprehensive platform lifecycle support contract. Benchmarking against similar 'Engineering Services' (NAICS 541330) contracts awarded by NAVSEA or other naval commands over the past few years would place this award within a typical range for specific, long-term technical support requirements.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract structure is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a guaranteed profit margin. This can sometimes disincentivize the contractor from aggressively controlling costs, as increased spending directly leads to higher reimbursement. For the government, the risk lies in paying more than anticipated if costs escalate beyond initial projections. Effective oversight, detailed cost monitoring, and robust negotiation of the fee are crucial to mitigate these risks and ensure value for money. The long duration of this contract (nearly five years) amplifies this risk if not managed diligently.

How does the 'full and open competition' procurement method impact price discovery and value for taxpayers?

The 'full and open competition' method is designed to maximize price discovery and ensure the best value for taxpayers. By allowing all responsible sources to submit bids, the government creates a competitive environment where multiple companies vie for the contract. This competition typically drives down prices as bidders seek to offer the most attractive terms and cost proposals to win the award. It also encourages innovation and efficiency as contractors strive to differentiate themselves. For taxpayers, this means a higher likelihood that the government is obtaining services at a fair and reasonable price, minimizing the risk of paying inflated costs due to a lack of market alternatives.

What is the significance of the contract being for 'Engineering Services' (NAICS 541330) within the defense sector?

Contracts for 'Engineering Services' (NAICS 541330) are fundamental to the defense sector, encompassing a wide range of activities critical for maintaining and advancing military capabilities. This includes design, development, testing, analysis, and technical support for complex weapon systems, platforms, and infrastructure. The Department of Defense relies heavily on specialized engineering expertise to ensure technological superiority, operational readiness, and the effective sustainment of its assets. Awards in this category often involve high levels of technical skill, security clearances, and specialized knowledge, reflecting the intricate and demanding nature of defense requirements.

What are the potential implications of this contract's duration (1978 days) on performance and cost?

A contract duration of 1978 days, approximately 5.4 years, indicates a long-term requirement for the engineering services being procured. This extended period allows for continuity of support, deep integration of the contractor's team with government personnel, and the potential for significant knowledge transfer. However, it also presents challenges. Long durations can increase the risk of scope creep if requirements evolve and are not managed through formal contract modifications. Furthermore, cost estimation becomes more complex over such an extended period, potentially leading to budget uncertainties. Regular performance reviews and proactive contract management are essential to ensure the project stays on track and within budget throughout its lifecycle.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042115R0002

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: $9,274,161

Exercised Options: $9,274,161

Current Obligation: $8,939,276

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $8,073,347

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042119D0047

IDV Type: IDC

Timeline