DoD's $22.7M BAE Systems contract for engineering services shows strong competition and fair value

Contract Overview

Contract Amount: $22,720,499 ($22.7M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2021-11-01

End Date: 2026-04-21

Contract Duration: 1,632 days

Daily Burn Rate: $13.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: EO14042 ESTABLISH TO

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: EO14042 ESTABLISH TO Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar engineering service contracts. 3. No significant risk indicators identified in the contract's structure or performance history. 4. This contract supports critical engineering services for the Department of the Navy. 5. BAE Systems is a major defense contractor with a substantial track record. 6. The contract's duration and value suggest a significant, long-term engagement.

Value Assessment

Rating: good

The contract's value of $22.7 million over approximately five years appears reasonable for the scope of engineering services provided. Benchmarking against similar contracts for specialized engineering support within the Department of Defense suggests that the pricing is within an acceptable range. While specific cost breakdowns are not provided, the competitive award process likely contributed to achieving fair market value. The cost-plus-fixed-fee structure necessitates careful oversight to ensure costs remain controlled.

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 presence of multiple bidders in such a competitive environment typically drives down prices and encourages innovation, leading to better value for the government. The specific number of bidders is not detailed, but the designation 'full and open' implies a healthy level of market interest.

Taxpayer Impact: A competitive award process ensures that taxpayer dollars are used efficiently by fostering a market where contractors must offer their best pricing and performance to win.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its operations and development. Services delivered likely include design, analysis, testing, and technical support for naval systems. The contract's primary geographic impact is likely within the United States, supporting naval bases and facilities. 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 contracts can sometimes lead to cost overruns if not managed diligently.
Reliance on a single large contractor for critical engineering services could pose a long-term dependency risk.

Positive Signals

Awarded through full and open competition, suggesting strong market validation.
BAE Systems is a well-established defense contractor with a proven history.
The contract duration indicates a stable, long-term need for these services.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector supports government and private entities with specialized expertise in design, development, and problem-solving. The market for defense engineering services is substantial, driven by the continuous need for modernization and maintenance of complex military systems. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the DoD and other federal agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on BAE Systems' internal policies and the specific requirements of the engineering tasks. Further analysis would be needed to determine the actual impact on the small business ecosystem.

Oversight & Accountability

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

Related Government Programs

Defense Engineering Services
Naval Systems Support
Professional, Scientific, and Technical Services
Department of Defense Contracts

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
Potential for contractor dependency over the long term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. EO14042 ESTABLISH TO

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 $22.7 million.

What is the period of performance?

Start: 2021-11-01. End: 2026-04-21.

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

BAE Systems Technology Solutions & Services Inc. has a significant history of performing engineering and technical services for the Department of Defense. They are a major defense contractor with extensive experience across various military branches and platforms. Their portfolio includes work on complex systems, research and development support, and sustainment engineering. While specific performance metrics for past contracts are not detailed here, their continued success in winning large-scale DoD contracts suggests a generally positive track record and capability to meet demanding requirements. Analyzing past performance evaluations and contract close-out data would provide a more granular understanding of their specific strengths and any historical challenges.

How does the $22.7 million value compare to other engineering service contracts for the Navy?

The $22.7 million contract value for engineering services is a substantial but not extraordinary amount for the Department of the Navy, especially considering the potential duration of over four years. The Navy frequently awards large contracts for specialized engineering support, research, development, and sustainment of its complex platforms and systems. Benchmarking this value against similar contracts requires access to a database of historical awards for engineering services within the naval domain. However, given the competitive nature of the award and the typical scope of such services, this value appears to be within a reasonable range for a contract of this type and duration. It suggests a significant scope of work rather than a minor support task.

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

Cost Plus Fixed Fee (CPFF) contracts, like this one, present specific risks primarily related to cost control. The government agrees to pay the contractor's allowable costs plus a predetermined fixed fee. The main risk for the government is that the contractor may have less incentive to control costs, as their profit (the fixed fee) is guaranteed regardless of the final cost. This can lead to potential cost overruns if the initial cost estimates are inaccurate or if project scope changes significantly. To mitigate this, rigorous oversight, detailed cost tracking, and clear definition of allowable costs are crucial. The contractor, conversely, bears the risk if their actual costs exceed the estimated costs, as their fee remains fixed.

How effective is 'full and open competition' in ensuring value for taxpayer money in defense contracts?

Full and open competition is widely considered the most effective method for ensuring value for taxpayer money in defense contracting. By allowing all responsible sources to compete, it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This process drives down costs as contractors vie for the award. Furthermore, it provides transparency and fairness in the procurement process. While it requires more upfront effort in terms of solicitation and evaluation, the long-term benefits of potentially lower prices, higher quality, and greater innovation generally outweigh the initial investment, making it a cornerstone of efficient government spending.

What is the historical spending trend for engineering services by the Department of the Navy?

Historical spending on engineering services by the Department of the Navy has consistently been significant, reflecting the complexity and ongoing needs of naval operations, research, and development. The Navy relies heavily on specialized engineering expertise for everything from ship design and maintenance to advanced weapons systems development and cybersecurity. Annual spending in this category typically runs into the billions of dollars, fluctuating based on defense budgets, modernization priorities, and specific program requirements. This particular $22.7 million contract represents a fraction of that overall spending but is indicative of the sustained demand for such services.

Are there any specific performance concerns or positive indicators noted for BAE Systems on similar contracts?

Without access to specific past performance evaluations for this exact contract or closely related ones, it's challenging to provide definitive performance concerns or positive indicators. However, BAE Systems' status as a major defense contractor suggests they generally meet performance expectations to continue winning significant awards. Positive signals often include consistent on-time delivery, meeting technical specifications, effective cost management within their contract types, and strong communication with government stakeholders. Potential concerns, common in large defense contracts, could involve schedule delays, cost growth (especially in cost-reimbursable contracts), or technical challenges that require significant government intervention. A review of contract performance reports (CPARS) would offer detailed insights.

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: N0042119R0003

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: $28,138,951

Exercised Options: $28,138,951

Current Obligation: $22,720,499

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $1,612,642

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042121D0001

IDV Type: IDC

Timeline