DoD's $14.1M warehousing contract with BAE Systems awarded under full and open competition

Contract Overview

Contract Amount: $14,099,510 ($14.1M)

Contractor: BAE Systems Technical Services

Awarding Agency: Department of Defense

Start Date: 2004-03-27

End Date: 2009-09-30

Contract Duration: 2,013 days

Daily Burn Rate: $7.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE

Sector: Other

Place of Performance

Location: CORPUS CHRISTI, NUECES County, TEXAS, 78419

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $14.1 million to BAE SYSTEMS TECHNICAL SERVICES for work described as: Key points: 1. Contract awarded to a large, established defense contractor. 2. Fixed Price Award Fee contract type suggests performance incentives. 3. Contract duration of over 6 years indicates a significant, long-term need. 4. Awarded by the Department of the Navy, part of the larger DoD. 5. The North American Industry Classification System (NAICS) code 493110 points to general warehousing and storage services. 6. The contract was awarded in 2004, with a completion date in 2009, providing historical performance data.

Value Assessment

Rating: fair

Benchmarking the value of this $14.1 million contract is challenging without specific performance metrics or comparable contract data. The Fixed Price Award Fee structure implies that BAE Systems could earn additional profit based on meeting or exceeding certain performance standards, which is a common value-for-money approach. However, the absence of detailed performance outcomes makes a definitive assessment of 'excellent' value difficult. The contract's age also limits direct comparison to current market rates.

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 3 bids suggests a moderate level of competition for this warehousing and storage requirement. While full and open competition is generally favorable for price discovery, the specific number of bidders (3) might not represent the maximum possible competition, which could potentially lead to more aggressive pricing.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, generally benefits taxpayers by encouraging multiple companies to offer their best pricing and services, potentially leading to cost savings compared to less competitive award methods.

Public Impact

The Department of the Navy benefits from essential warehousing and storage services, ensuring readiness and operational support. This contract supports the logistical backbone of naval operations, likely impacting personnel and equipment readiness. The services provided are crucial for maintaining an inventory of supplies and equipment, potentially across various naval installations. While specific geographic impact isn't detailed, warehousing services are typically tied to operational bases or distribution hubs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess if the full award fee was earned or if maximum value was achieved.
The age of the contract (awarded 2004) means current market conditions and technological advancements may not be reflected in the original pricing or service delivery model.
Limited competition (3 bidders) might have constrained the potential for further price reductions.

Positive Signals

Awarded under full and open competition, which generally promotes competitive pricing.
Fixed Price Award Fee structure incentivizes contractor performance.
Long contract duration suggests a stable, ongoing requirement met by the contractor.

Sector Analysis

The contract falls within the General Warehousing and Storage sector (NAICS 493110), a critical component of the logistics and supply chain industry. This sector supports various government and commercial operations by providing storage, inventory management, and distribution services. The Department of Defense is a significant consumer of such services, requiring robust and reliable warehousing to maintain operational readiness. Comparable spending benchmarks would involve analyzing other large-scale warehousing contracts within the DoD or other federal agencies.

Small Business Impact

This contract does not appear to have a small business set-aside (sb: false). Given the award to a large contractor (BAE SYSTEMS TECHNICAL SERVICES), it's unlikely that significant subcontracting opportunities for small businesses were mandated within this specific award, though BAE Systems may have its own small business subcontracting program. The absence of a set-aside means the primary focus was on obtaining the best overall value from any responsible source.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Fixed Price Award Fee structure implies performance monitoring to determine the fee. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Department of Defense Logistics Support Contracts
General Warehousing Services
Naval Supply Systems Command Contracts
Federal Supply Chain Management

Risk Flags

Contract awarded in 2004, may not reflect current market conditions or technology.
Limited number of bidders (3) may indicate constrained competition.
Performance metrics for award fee are not publicly detailed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to BAE SYSTEMS TECHNICAL SERVICES. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNICAL SERVICES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $14.1 million.

What is the period of performance?

Start: 2004-03-27. End: 2009-09-30.

What was the specific performance criteria used to determine the 'Award Fee' for BAE Systems?

The specific performance criteria for the 'Award Fee' component of this contract are not detailed in the provided data. Typically, for a Fixed Price Award Fee (FPAF) contract, the government establishes objective and subjective performance standards related to areas such as timeliness of delivery, quality of service, cost control, and customer satisfaction. The contractor, BAE Systems Technical Services, would have been evaluated against these criteria by the Naval Sea Systems Command (NAVSEA) or the relevant contracting office. The fee awarded would then be a portion of the total potential fee, based on the assessed performance level. Without access to the contract's Performance Work Statement (PWS) and the associated award fee determination documentation, the exact metrics and outcomes remain unknown.

How does the $14.1 million total contract value compare to similar warehousing contracts awarded by the DoD around 2004?

Comparing the $14.1 million total contract value to similar DoD warehousing contracts awarded around 2004 requires access to historical contract databases and market analysis from that period. However, as a general benchmark, $14.1 million over approximately six years (2004-2009) represents an average annual value of roughly $2.35 million. This figure is moderate for large-scale federal logistics support. Contracts of this nature can vary significantly based on the scope of services (e.g., type of goods stored, security requirements, inventory management complexity), geographic location, and duration. Larger, more complex operations, especially those involving specialized storage (like hazardous materials or munitions) or extensive distribution networks, could easily exceed this value, while smaller, site-specific warehousing might be less.

What were the primary risks associated with this warehousing contract for the Department of the Navy?

The primary risks associated with this warehousing contract for the Department of the Navy would likely include operational risks, financial risks, and performance risks. Operational risks could involve disruptions to supply chains, damage or loss of stored goods, and failure to maintain adequate inventory levels, impacting naval readiness. Financial risks might include cost overruns if the fixed-price component proved insufficient or if the award fee structure led to unexpected expenditures. Performance risks center on BAE Systems' ability to meet the contracted service levels consistently, potentially leading to mission delays or increased costs if corrective actions are needed. Ensuring compliance with security protocols for sensitive materials and maintaining the integrity of the stored assets would also be critical risk areas.

What is the significance of BAE Systems Technical Services being the contractor for this DoD warehousing requirement?

BAE Systems Technical Services is a major defense contractor with extensive experience in providing a wide range of technical and logistical support services to government agencies, including the Department of Defense. Their involvement in this $14.1 million warehousing contract signifies the DoD's reliance on large, established companies with proven capabilities for critical support functions. For the DoD, awarding contracts to companies like BAE Systems often implies a degree of confidence in their ability to manage complex operations, adhere to stringent security and quality standards, and possess the necessary infrastructure and personnel. This also means the contract value contributes to the revenue of a significant player in the defense industrial base.

How has federal spending on general warehousing and storage (NAICS 493110) evolved since this contract was awarded in 2004?

Federal spending on general warehousing and storage (NAICS 493110) has likely seen significant evolution since 2004, driven by factors such as increased global operations, technological advancements in logistics and inventory management, and shifts in government procurement strategies. While specific aggregate spending figures for NAICS 493110 require detailed analysis of historical federal procurement data (e.g., from FPDS or USAspending), it's reasonable to assume an overall increase in spending, potentially influenced by factors like the wars in Iraq and Afghanistan which demanded extensive logistical support. Furthermore, the rise of e-commerce and sophisticated supply chain management technologies may have led to more specialized or automated warehousing solutions being sought, potentially altering the nature and cost of services procured by agencies like the DoD.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › General Warehousing and Storage

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 557 MARY ESTHER CUT-OFF, FORT WALTON BE, FL

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline