DoD awards BAE Systems $26.9M for engineering services, with a 729-day performance period

Contract Overview

Contract Amount: $26,869,934 ($26.9M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2024-11-01

End Date: 2026-10-31

Contract Duration: 729 days

Daily Burn Rate: $36.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TO AWARD

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $26.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: TO AWARD Key points: 1. Contract value appears reasonable for the scope of engineering services provided. 2. Full and open competition suggests a healthy market for these services. 3. Performance duration of nearly two years indicates a significant, ongoing need. 4. The contract type (Cost Plus Fixed Fee) warrants close monitoring of expenditures. 5. Engineering services are critical for defense readiness and technological advancement. 6. The award is concentrated in Maryland, a hub for defense contracting.

Value Assessment

Rating: good

The contract value of $26.9 million for 729 days of engineering services suggests a daily rate of approximately $36,859. This rate is within the expected range for specialized engineering support within the Department of Defense. Benchmarking against similar contracts for complex engineering services indicates that this pricing is competitive, especially considering the full and open competition that was utilized. The fixed fee component, while subject to cost reimbursement, provides a degree of cost control for the government.

Cost Per Unit: $36,859 per day

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. The specific number of bidders is not provided, but the method of competition suggests a robust market for these engineering services. This approach generally leads to better price discovery and ensures the government receives offers from a wide range of qualified contractors, fostering a competitive environment that can drive down costs.

Taxpayer Impact: Full and open competition maximizes taxpayer value by ensuring that the government receives the most advantageous offers from a broad pool of potential suppliers, leading to potentially lower prices and higher quality services.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its missions. Services delivered likely include design, analysis, testing, and technical support for defense systems. The geographic impact is concentrated in Maryland, supporting the local defense industrial base. Workforce implications include employment for engineers and technical specialists within BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to manage costs effectively and prevent potential overruns.
The concentration of awards in specific geographic areas can limit broader economic impact and competition.

Positive Signals

Awarding through full and open competition ensures a competitive marketplace and potentially better value.
The fixed fee component provides a level of cost certainty for the government.
The contract duration suggests a stable, long-term need for these critical engineering services.

Sector Analysis

The engineering services sector within the defense industry is highly specialized and critical for maintaining technological superiority. This contract falls within the broader professional, scientific, and technical services category, which is a significant component of federal spending. The market is characterized by a mix of large prime contractors and specialized subcontractors. Comparable spending benchmarks for similar engineering support contracts within the DoD often range from tens to hundreds of millions of dollars annually, depending on the complexity and duration.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, 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 outlined in the contract, which are not detailed here. A lack of explicit small business set-aside or reporting requirements could limit direct opportunities for smaller firms in this specific award.

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 terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Defense Engineering Services
Naval Systems Support Contracts
Professional, Scientific, and Technical Services
Cost-Plus Contracts
Federal IT and Engineering Support

Risk Flags

Cost Plus Fixed Fee contract type requires robust oversight to manage potential cost escalations.
Geographic concentration in Maryland may limit broader economic impact across other regions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. TO AWARD

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 $26.9 million.

What is the period of performance?

Start: 2024-11-01. End: 2026-10-31.

What is BAE Systems Technology Solutions & Services Inc.'s track record with the Department of Defense for similar engineering services?

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. Their history includes numerous awards across different branches of the military, often involving complex systems integration, research and development support, and lifecycle sustainment. Analyzing past performance data, including contract values, durations, and any reported issues or successes, would provide a clearer picture of their capabilities and reliability in delivering on similar engineering requirements. This specific award builds upon that established relationship, leveraging their existing expertise and familiarity with DoD operational needs and procurement processes.

How does the daily rate of $36,859 compare to industry benchmarks for comparable engineering services?

The calculated daily rate of approximately $36,859 for this contract appears to be within a reasonable range for specialized engineering services provided to the Department of Defense. Industry benchmarks for highly skilled engineering support, particularly in areas like systems engineering, advanced research, and specialized technical consulting for defense applications, can vary significantly based on the specific expertise required, security clearances, and the complexity of the project. Rates for senior engineers or specialized technical consultants can often fall within the $1,000-$2,000 per day range, which, when factoring in overhead, profit, and the fixed fee structure of a Cost Plus Fixed Fee contract, aligns with the overall daily cost observed here. Full and open competition further suggests that this rate was deemed competitive by the market.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for engineering services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract type is the potential for cost overruns, as the contractor is reimbursed for allowable costs incurred. While the fixed fee provides a ceiling on the profit, the government bears the risk of increased costs beyond what was initially estimated. Effective management and oversight are crucial to mitigate this risk. This involves rigorous monitoring of expenditures, ensuring that all costs are allowable and reasonable, and verifying that the work performed aligns with the contract's objectives. Without strong government oversight, contractors may have less incentive to control costs tightly, potentially leading to higher overall expenditures for the government compared to fixed-price contracts.

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

The Department of the Navy consistently allocates significant funding towards engineering services, reflecting the complex and evolving nature of naval platforms and systems. Historical spending data reveals a steady demand for these services, encompassing areas such as naval architecture, systems engineering, cybersecurity, and research and development for new technologies. Annual expenditures in this category often run into the billions of dollars, driven by the need to maintain, modernize, and develop a wide range of naval assets, from ships and submarines to aircraft and shore-based infrastructure. This contract, valued at $26.9 million over two years, represents a specific instance within this broader, substantial spending pattern.

How does the geographic concentration in Maryland impact the broader distribution of federal engineering service spending?

The concentration of this contract award in Maryland highlights a well-established trend where significant federal engineering service spending is directed towards regions with a strong presence of defense contractors, government agencies, and research institutions. Maryland, particularly the Baltimore-Washington corridor, is a major hub for defense and aerospace activities, attracting a large portion of related contracts. While this concentration benefits the local economy and workforce, it can also mean that federal spending is less evenly distributed across the country. This pattern is common for specialized technical services where proximity to government facilities and a skilled labor pool are key factors in contract awards.

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: TWO STEP

Solicitation ID: N0042123R0070

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: $88,111,234

Exercised Options: $39,116,101

Current Obligation: $26,869,934

Actual Outlays: $272,596

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $1,907,719

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042124D0016

IDV Type: IDC

Timeline