DoD awards BAE Systems $8.5M for engineering services, with a 5-year contract term

Contract Overview

Contract Amount: $8,534,333 ($8.5M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-20

End Date: 2029-07-19

Contract Duration: 1,825 days

Daily Burn Rate: $4.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AWARD DMS CPFF TERM LEVEL OF EFFORT CONTRACT N00421-24-C-0060

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $8.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: AWARD DMS CPFF TERM LEVEL OF EFFORT CONTRACT N00421-24-C-0060 Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 3. The contract duration is 5 years, indicating a long-term need for these engineering services. 4. The award is for engineering services, a critical component of defense procurement. 5. The geographic location of performance is Maryland, a hub for defense contracting.

Value Assessment

Rating: fair

The award amount of $8.5 million over five years for engineering services appears moderate. Benchmarking against similar contracts for engineering services within the Department of Defense is necessary for a comprehensive value assessment. The CPFF contract type introduces inherent risk regarding cost control, as the government reimburses allowable costs plus a fixed fee. Without detailed cost breakdowns and performance metrics, it's difficult to definitively assess value for money at this stage. The contract's value per year is approximately $1.7 million, which needs to be compared to industry standards for similar engineering support.

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 presence of two bids suggests a degree of competition, but the exact number of bidders and the nature of their proposals would provide a clearer picture of the competitive landscape. A robust competition typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where contractors are incentivized to offer competitive pricing to win awards.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations and programs. These services are crucial for the design, development, and maintenance of naval systems and infrastructure. The contract's performance location in Maryland may create or sustain jobs in the local engineering and technical sectors. The ultimate beneficiaries are the personnel and missions supported by the advanced engineering capabilities provided under this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to increase costs to maximize profit, requiring vigilant oversight.
The 5-year duration necessitates ongoing monitoring to ensure continued alignment with evolving defense needs and technological advancements.
Limited information on specific performance metrics makes it challenging to assess the contractor's efficiency and effectiveness proactively.

Positive Signals

Awarded through full and open competition, indicating a potentially competitive pricing environment.
The contractor, BAE Systems, is a well-established defense contractor with a significant track record.
The contract specifies a fixed fee, which, when managed effectively, can provide cost predictability.

Sector Analysis

Engineering services are a vital segment of the defense industrial base, encompassing a wide range of activities from conceptual design to lifecycle support. This contract falls within the broader professional, scientific, and technical services sector. The market for defense engineering services is substantial, driven by the continuous need for modernization and sustainment of military platforms and systems. Comparable spending benchmarks would typically be found within the Department of Defense's procurement data for similar engineering support contracts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or benefits specifically for small businesses stemming from a set-aside provision. The prime contractor, BAE Systems, may still engage small businesses as subcontractors, but this is not mandated by the contract's award terms.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Engineering Services
Department of Defense Research and Development Contracts
Defense Engineering and Technical Support Services
Aerospace Engineering Services

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires careful monitoring to prevent cost overruns.
Long contract duration (5 years) increases the potential for scope creep and cost escalation if not managed proactively.
Lack of specific performance metrics in the award data makes immediate assessment of effectiveness challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. AWARD DMS CPFF TERM LEVEL OF EFFORT CONTRACT N00421-24-C-0060

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 $8.5 million.

What is the period of performance?

Start: 2024-07-20. End: 2029-07-19.

What is BAE Systems' track record with the Department of Defense, particularly on similar Cost Plus Fixed Fee contracts?

BAE Systems Technology Solutions & Services Inc. has a substantial history of contracting with the Department of Defense across various service and product categories. As a major defense contractor, they frequently engage in Cost Plus Fixed Fee (CPFF) arrangements. Analyzing their past performance on similar CPFF contracts would involve reviewing award histories, any documented performance issues or accolades, and the final cost versus initial estimates on comparable projects. This would help assess their capability to manage costs effectively within the CPFF structure and deliver on engineering service requirements. Specific data on their historical CPFF contract performance, including cost variances and timeliness, would be crucial for a thorough evaluation.

How does the $1.7 million annual value of this contract compare to industry benchmarks for similar engineering services?

The annual value of approximately $1.7 million for engineering services under this contract needs to be benchmarked against industry standards and comparable government contracts. Factors influencing this benchmark include the specific type of engineering services (e.g., systems engineering, mechanical, electrical), the complexity of the tasks, the required security clearances, and the geographic location of performance. Industry reports on professional services rates, particularly within the defense sector, can provide a baseline. Comparing this contract's value to other recent awards for similar services by the Department of the Navy or other defense agencies would offer a more direct comparison. Without detailed task orders and scope of work, a precise comparison is challenging, but the $1.7M annual figure provides a starting point for assessing potential value for money.

What are the primary risks associated with a 5-year Cost Plus Fixed Fee contract for engineering services?

The primary risks associated with a 5-year Cost Plus Fixed Fee (CPFF) contract for engineering services revolve around cost control and scope creep. Under a CPFF arrangement, the contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize cost increases if not rigorously managed. The extended 5-year duration amplifies this risk, as it provides a longer period for costs to potentially escalate. Scope creep, where the project's requirements expand beyond the original agreement without corresponding adjustments to the fee or schedule, is another significant risk. Effective oversight, detailed cost tracking, robust change management processes, and clear performance metrics are essential to mitigate these risks and ensure the government receives good value.

What specific engineering services will be provided, and how will their effectiveness be measured?

The provided data indicates the contract is for 'Engineering Services' (ND: Engineering Services) but does not specify the exact nature of these services. These could range from systems engineering, design and development, testing and evaluation, to technical support and lifecycle management for naval systems. The effectiveness of these services will be measured through performance metrics defined in the contract's Statement of Work (SOW) and subsequent Task Orders. These metrics typically include adherence to schedules, quality of deliverables, technical performance standards, and cost control. The Department of the Navy's program office will be responsible for monitoring contractor performance against these metrics and ensuring the services meet the required operational needs.

How does this contract fit into the Department of the Navy's broader strategy for acquiring engineering support?

This contract represents a component of the Department of the Navy's (DoN) strategy for acquiring essential engineering support services. The DoN relies heavily on external contractors to supplement its organic engineering capabilities, particularly for specialized expertise, surge capacity, and long-term program support. Awarding through full and open competition aims to leverage the market's capabilities and ensure competitive pricing. The use of a CPFF contract type suggests a need for flexibility in defining requirements or managing projects where costs are difficult to estimate precisely upfront. This contract likely supports specific naval platforms, systems, or infrastructure projects, contributing to the DoN's overall readiness and modernization goals.

Industry Classification

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

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042123R0046

Offers Received: 2

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: $49,901,472

Exercised Options: $19,235,969

Current Obligation: $8,534,333

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline