DoD's $17.3M R&D contract with BAE Systems awarded via full and open competition

Contract Overview

Contract Amount: $17,347,810 ($17.3M)

Contractor: BAE Systems Advanced Information Technologies Incorporated

Awarding Agency: Department of Defense

Start Date: 2005-09-08

End Date: 2009-12-31

Contract Duration: 1,575 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: BURLINGTON, MIDDLESEX County, MASSACHUSETTS, 01803

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to BAE SYSTEMS ADVANCED INFORMATION TECHNOLOGIES INCORPORATED for work described as: Key points: 1. Contract awarded for R&D in physical, engineering, and life sciences. 2. BAE Systems, a major defense contractor, secured this award. 3. The contract was competed openly, suggesting potential for competitive pricing. 4. A Cost Plus Fixed Fee (CPFF) structure was used, which can shift risk to the government. 5. The contract duration was substantial at over 4 years. 6. This award falls under the broad category of Research and Development. 7. The contract was managed by the Defense Contract Management Agency. 8. No small business set-aside was indicated for this award.

Value Assessment

Rating: fair

Benchmarking the value of this specific $17.3 million R&D contract is challenging without detailed scope of work and deliverables. However, the CPFF pricing structure, while common for R&D, can lead to higher costs for the government if not closely managed, as contractor profit is fixed regardless of cost efficiency. The duration of over four years suggests a significant undertaking, and the final cost should be evaluated against the achieved research outcomes and milestones.

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 bidders (no=2) suggests some level of competition, but the exact number of proposals received and the evaluation process are not detailed here. A higher number of bidders typically leads to more robust price discovery and potentially better value for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. However, the effectiveness of this benefit depends on the number of actual bidders and the rigor of the evaluation process.

Public Impact

This contract likely benefits the Department of Defense by advancing research and development in critical physical, engineering, and life sciences areas. The services delivered are research and development, contributing to future technological capabilities. The geographic impact is primarily associated with BAE Systems' operations, likely within the United States. Workforce implications include employment for scientists, engineers, and support staff at BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to incur higher costs as profit is fixed, potentially leading to less cost-consciousness.
The long duration of the contract (over 4 years) increases the risk of scope creep or evolving requirements that may not align with initial cost estimates.
Limited information on the specific R&D outcomes makes it difficult to assess the true value for money and return on investment.
The number of bidders (2) might indicate limited competition, potentially impacting price competitiveness.

Positive Signals

Awarded through full and open competition, which theoretically promotes a competitive bidding environment.
BAE Systems is a large, established defense contractor with a track record in R&D, suggesting technical capability.
The contract specifies a definitive contract type, implying a clear scope and terms.
The contract was managed by the Defense Contract Management Agency, indicating established oversight processes.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). This sector is characterized by innovation, long development cycles, and significant government investment. Comparable spending in this sector can vary widely depending on the specific scientific or engineering discipline, but R&D contracts are crucial for maintaining technological superiority and developing future capabilities for agencies like the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). As a large contract awarded to a major defense contractor, the primary focus is likely on large-scale R&D capabilities. There is no explicit information provided regarding subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in supporting this research effort.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. The CPFF structure necessitates close monitoring of costs and progress to ensure value for money. Transparency regarding the specific R&D outcomes and milestones achieved would be key to assessing accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
BAE Systems Contracts
Cost Plus Fixed Fee Contracts
Definitive Contracts
NAICS 541710 Contracts

Risk Flags

Cost Plus Fixed Fee contract type can lead to higher government costs if not closely managed.
Limited number of bidders (2) may indicate concentrated market or barriers to entry.
Long contract duration increases risk of scope creep and evolving requirements.
Lack of specific deliverable details makes value-for-money assessment difficult from summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to BAE SYSTEMS ADVANCED INFORMATION TECHNOLOGIES INCORPORATED. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS ADVANCED INFORMATION TECHNOLOGIES INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2005-09-08. End: 2009-12-31.

What specific R&D projects were undertaken under this contract, and what were the key deliverables or technological advancements achieved?

The provided data does not specify the exact R&D projects or their outcomes. NAICS code 541710 indicates research and development in physical, engineering, and life sciences. Without access to the contract's statement of work, technical reports, or final deliverables, it is impossible to detail the specific advancements. Typically, R&D contracts aim to explore new technologies, solve complex scientific problems, or develop prototypes. The success of this contract would be measured by the achievement of predefined research objectives and the transition of developed technologies into practical applications or further development phases.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types used for similar R&D efforts by the DoD?

Cost Plus Fixed Fee (CPFF) contracts are common for R&D where the scope is not fully defined or is expected to evolve. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to complete the work but can lead to higher government costs if not managed diligently, as the fee is fixed regardless of the final cost. Other R&D contract types include Cost Plus Incentive Fee (CPIF), which adjusts the fee based on performance against targets, and Firm-Fixed-Price (FFP) contracts, which are less common for R&D due to inherent uncertainties but offer greater cost certainty for the government if the scope is well-defined. The choice of CPFF suggests a high degree of uncertainty in the R&D effort.

What was the historical spending pattern for BAE Systems with the Department of Defense for similar R&D services prior to and following this contract?

The provided data does not include historical spending patterns for BAE Systems or the Department of Defense. To assess this, one would need to query federal procurement databases (like FPDS or USASpending) for all contracts awarded to BAE Systems by the DoD, filter them by R&D services (NAICS 541710 or similar), and analyze the spending volume and trends over time. This would reveal if this $17.3 million contract was typical, an outlier, or part of a larger trend in DoD's investment in BAE Systems for R&D.

Given the 'full and open competition' and only two bidders, what does this suggest about the market for these specific R&D services?

The fact that this contract was awarded under 'full and open competition' but only had two bidders (no=2) suggests that the market for these specific R&D services might be specialized or concentrated among a few large players. While 'full and open' theoretically allows all, the limited number of bids could indicate high barriers to entry (e.g., specialized expertise, security clearances, existing infrastructure), a lack of awareness among potential bidders, or that only two entities possessed the necessary qualifications and capacity. This limited competition could potentially impact price discovery and the government's ability to secure the best possible value, although BAE Systems is a capable contractor.

What are the potential risks associated with a Cost Plus Fixed Fee contract for a multi-year R&D project, and what mitigation strategies are typically employed?

The primary risk with a CPFF contract for a multi-year R&D project is the potential for cost overruns without a corresponding increase in the contractor's incentive to control costs, as their profit (the fixed fee) remains constant. The government bears the risk of cost increases. Additionally, the long duration increases the likelihood of scope changes or evolving research needs. Mitigation strategies typically include robust government oversight, detailed milestone tracking, regular performance reviews, clear communication channels, and potentially incorporating incentive clauses if feasible. Strict adherence to the contract's allowable cost principles and thorough auditing are also crucial to manage financial risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6 NEW ENGLAND EXECUTIVE P, BURLINGTON, MA, 01803

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline