DoD's $126.9M contract for aircraft manufacturing awarded to BAE Systems Technology Solutions & Services Inc

Contract Overview

Contract Amount: $126,927,875 ($126.9M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2002-08-19

End Date: 2016-02-29

Contract Duration: 4,942 days

Daily Burn Rate: $25.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200211!000044!5700!GE70 !OO-ALC/PKHS/LHKS !F0960301D0209 !A!N! !N!QP05 !20020819!20030919!122525991!122525991!110341133!N!MODERN TECHNOLOGIES CORP !4032 LINDEN AVE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTGOMERY !OHIO !+000009000000!N!N!000000000000!AD67!RDTE/CONSTRUCTION-OPERATIONAL SYSTEM DEVELOPMENT !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !334515!E! !5!B!M! !A! !99990909!B! ! !A! !A!N!U!2!010!B! !A!N!D! ! !N!B!N!N! ! !A! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $126.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200211!000044!5700!GE70 !OO-ALC/PKHS/LHKS !F0960301D0209 !A!N! !N!QP05 !20020819!20030919!122525991!122525991!110341133!N!MODERN TECHNOLOGIES CORP !4032 LINDEN AVE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTG… Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The contract duration of approximately 13.5 years (4942 days) is exceptionally long, raising questions about long-term planning and flexibility. 4. The base award amount is substantial, indicating a significant investment in aircraft manufacturing capabilities. 5. The contract was awarded to a single entity, BAE Systems Technology Solutions & Services Inc., despite being competed. 6. The contract is for Aircraft Manufacturing, a critical sector for national defense.

Value Assessment

Rating: fair

The total award amount of $126.9 million for aircraft manufacturing services over a period of nearly 14 years appears to be within a reasonable range for large-scale defense contracts. However, without specific benchmarks for the exact services rendered and the complexity of the aircraft manufacturing involved, a definitive value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk, as contractor profit is guaranteed regardless of efficiency, potentially leading to higher overall costs compared to fixed-price contracts if not rigorously overseen. Further analysis would require detailed cost breakdowns and performance metrics.

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 data shows 10 offers were received, suggesting a healthy level of competition for this significant contract. A competitive process like this is generally expected to drive down prices and encourage innovation as contractors vie for the award. The presence of multiple bidders implies that the government had a range of options to choose from, potentially leading to a more favorable outcome in terms of cost and quality.

Taxpayer Impact: The full and open competition with multiple offers is beneficial for taxpayers as it increases the likelihood of securing services at a competitive price, preventing potential overpayment that could occur with less competitive or sole-source awards.

Public Impact

The primary beneficiaries are the Department of Defense and potentially allied nations relying on advanced aircraft capabilities. The contract supports the delivery of critical aircraft manufacturing services, essential for maintaining and modernizing military aviation assets. The geographic impact is likely concentrated around the contractor's facilities, primarily in Maryland (SN: MARYLAND), and potentially extends to the broader aerospace supply chain across the US. This contract has significant workforce implications, supporting jobs in specialized manufacturing, engineering, and technical roles within the aerospace industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract structure can incentivize contractors to incur higher costs, as their fee is a percentage of those costs, potentially leading to less cost-consciousness.
The exceptionally long contract duration (nearly 14 years) raises concerns about the government's ability to adapt to changing technological needs or market conditions over such an extended period.
While competed, the award went to a single entity, BAE Systems, which warrants monitoring to ensure continued performance and prevent potential complacency.
The lack of specific details on the 'Aircraft Manufacturing' scope makes it difficult to assess the true value and potential risks associated with the services provided.

Positive Signals

The contract was awarded through full and open competition, indicating a robust bidding process with 10 offers received.
BAE Systems Technology Solutions & Services Inc. is a major defense contractor, suggesting they possess the necessary expertise and infrastructure for complex aircraft manufacturing.
The contract supports a critical national defense capability, ensuring the availability of essential aircraft.
The long duration, while a concern, could also indicate a stable, long-term partnership necessary for complex, multi-year manufacturing programs.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, a significant segment of the US industrial base. The North American Industry Classification System (NAICS) code 336411 (Aircraft Manufacturing) encompasses establishments primarily engaged in manufacturing aircraft, aircraft parts, and related equipment. The market for defense aircraft manufacturing is characterized by high barriers to entry, substantial R&D investment, and long production cycles. Spending in this sector is heavily influenced by government defense budgets and geopolitical factors. Comparable spending benchmarks would typically involve analyzing other large-scale aircraft production contracts awarded by the DoD or other government agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SB: false) and there is no explicit mention of small business subcontracting goals. Given the nature and scale of aircraft manufacturing, it is likely that the prime contractor, BAE Systems, would engage a complex supply chain. However, without specific subcontracting plans or reporting, the direct impact on the small business ecosystem within this particular contract remains unclear. Further investigation into BAE Systems' subcontracting practices would be needed to assess opportunities for small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, with potential involvement from the Department of Defense's Inspector General. Mechanisms likely include regular performance reviews, milestone tracking, financial audits, and compliance checks, especially given the Cost Plus Fixed Fee structure. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be classified or proprietary. The Inspector General's office plays a crucial role in investigating fraud, waste, and abuse within defense contracts.

Related Government Programs

Aircraft Production
Defense Manufacturing
Aerospace Industry Contracts
Military Aircraft Procurement
Cost Plus Fixed Fee Contracts
Department of the Air Force Contracts

Risk Flags

Long contract duration may lead to inflexibility.
CPFF contract type can incentivize higher costs.
Lack of specific deliverable details limits assessment.
Potential for supply chain risks in long-term manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $126.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200211!000044!5700!GE70 !OO-ALC/PKHS/LHKS !F0960301D0209 !A!N! !N!QP05 !20020819!20030919!122525991!122525991!110341133!N!MODERN TECHNOLOGIES CORP !4032 LINDEN AVE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTGOMERY !OHIO !+000009000000!N!N!000000000000!AD67!RDTE/CONSTRUCTION-OPERATIONAL SYSTEM DEVELOPMENT !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !334515!E! !5!B!M! !A! !99990909!B

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 Air Force).

What is the total obligated amount?

The obligated amount is $126.9 million.

What is the period of performance?

Start: 2002-08-19. End: 2016-02-29.

What specific types of aircraft or aircraft components are being manufactured under this contract?

The provided data identifies the contract's Product Service Code (PSC) as 'RDTE/CONSTRUCTION-OPERATIONAL SYSTEM DEVELOPMENT' and the NAICS code as '336411' (Aircraft Manufacturing). However, it does not specify the exact models of aircraft, components, or systems being produced. This level of detail is often found in the contract's statement of work, which is not included in the provided data. Understanding the specific deliverables is crucial for assessing the contract's technical scope, associated risks, and true value. Without this information, it's difficult to benchmark against similar specialized manufacturing efforts.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar aircraft manufacturing programs?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not well-defined or involves significant research and development, making it difficult to estimate costs accurately upfront. In such cases, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. For aircraft manufacturing, fixed-price contracts (like Firm-Fixed Price or Fixed-Price Incentive) are generally preferred when requirements are stable and well-understood, as they place more cost risk on the contractor and incentivize efficiency. However, for developmental or highly complex manufacturing where uncertainty is high, CPFF can be justifiable. The risk with CPFF is that it can lead to cost overruns if not managed diligently, as the contractor has less incentive to control expenses compared to fixed-price arrangements. Benchmarking against similar developmental aircraft programs would reveal the prevalence of CPFF versus other types.

What is the historical spending trend for BAE Systems Technology Solutions & Services Inc. with the Department of Defense in the Aircraft Manufacturing sector?

Analyzing the historical spending trend for BAE Systems Technology Solutions & Services Inc. with the Department of Defense in Aircraft Manufacturing requires access to historical contract databases beyond the provided snippet. This specific contract, awarded in 2002 and ending in 2016, represents a significant outlay. To understand trends, one would need to aggregate all contracts awarded to this entity under NAICS code 336411 (and potentially related codes) by the DoD over several fiscal years. This would reveal patterns of consistent investment, growth, or decline in this sector, and help contextualize the significance of this particular $126.9 million award within their overall portfolio and the DoD's spending priorities over time.

What are the key performance indicators (KPIs) used to measure the success of this contract, given its long duration?

For a long-duration aircraft manufacturing contract like this, key performance indicators (KPIs) would likely focus on several critical areas. These typically include adherence to production schedules (on-time delivery of aircraft or components), quality control metrics (defect rates, rework required), cost performance against projections (especially relevant for CPFF), technical performance (meeting design specifications and operational requirements), and safety compliance. Given the CPFF structure, rigorous oversight of cost accounting and justification for incurred costs would also be a critical performance measure. The government would likely conduct regular reviews and audits to ensure these KPIs are being met throughout the contract's lifecycle.

Are there any known risks or challenges associated with BAE Systems Technology Solutions & Services Inc. as a contractor for this type of work?

Without specific performance data or past performance reviews for this particular contract, assessing known risks associated with BAE Systems Technology Solutions & Services Inc. is challenging. However, as a large defense contractor, BAE Systems operates in a complex environment. Potential risks common to such large-scale manufacturing contracts include supply chain disruptions, labor shortages in specialized skills, technological obsolescence over the long contract duration, and potential cost overruns inherent in CPFF agreements. Past performance records, available through government databases like the Contractor Performance Assessment Reporting System (CPARS), would provide a more definitive assessment of their track record, including any past issues related to schedule, cost, or quality on similar programs.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 10

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0960301D0209

IDV Type: IDC

Timeline