DoD HPC Modernization Program awards $344M contract for supercomputing research centers to BAE Systems

Contract Overview

Contract Amount: $344,489,365 ($344.5M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2022-08-16

End Date: 2026-08-17

Contract Duration: 1,462 days

Daily Burn Rate: $235.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: HIGH PERFORMANCE COMPUTING (HPC) CENTERS PROGRAM OF THE DOD HPC MODERNIZATION PROGRAM OFFICE (HPCMPO), UNDER THE U.S. ARMY ENGINEER RESEARCH AND DEVELOPMENT CENTER (ERDC) OVERSEES 5 DOD SUPERCOMPUTING RESEARCH CENTERS (DSRCS).

Place of Performance

Location: VICKSBURG, WARREN County, MISSISSIPPI, 39180

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $344.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: HIGH PERFORMANCE COMPUTING (HPC) CENTERS PROGRAM OF THE DOD HPC MODERNIZATION PROGRAM OFFICE (HPCMPO), UNDER THE U.S. ARMY ENGINEER RESEARCH AND DEVELOPMENT CENTER (ERDC) OVERSEES 5 DOD SUPERCOMPUTING RESEARCH CENTERS (DSRCS). Key points: 1. The contract supports critical High Performance Computing (HPC) infrastructure for the Department of Defense. 2. BAE Systems is the sole awardee, indicating a specific capability or existing relationship. 3. The contract duration extends to August 2026, suggesting a long-term need. 4. The award is a delivery order under a larger program, implying potential for future taskings. 5. The 'MS' status code might indicate a specific type of contract or funding mechanism.

Value Assessment

Rating: fair

The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar HPC center contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, as a delivery order, the specific competition for this order might have been limited to pre-qualified vendors.

Taxpayer Impact: Taxpayer funds are being used to procure advanced computing capabilities essential for defense research and development.

Public Impact

Ensures continued access to advanced supercomputing for military research and development. Supports technological advancements in areas like AI, simulation, and data analysis for national security. The investment in HPC infrastructure is crucial for maintaining a technological edge. Potential for job creation within the defense technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts require close monitoring to control costs.
Lack of specific performance metrics makes it hard to assess value for money.
The sole awardee raises questions about the breadth of competition for this specific delivery order.

Positive Signals

Supports critical national security research infrastructure.
Long-term contract provides stability for HPC operations.
Awarded under full and open competition, suggesting initial broad market engagement.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on high-performance computing. Spending benchmarks for HPC centers vary widely based on scale and specific capabilities, but this award represents a significant investment in advanced computing infrastructure for defense applications.

Small Business Impact

The data indicates this contract was not set aside for small businesses and the awardee is BAE Systems, a large corporation. There is no indication of small business participation in this specific award.

Oversight & Accountability

The Department of the Army, through ERDC, oversees this program. Oversight would involve monitoring BAE Systems' performance, costs, and adherence to contract terms to ensure the HPC centers are effectively supporting DoD research.

Related Government Programs

Computer Systems Design Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Cost Plus Incentive Fee contract type can lead to cost overruns.
Lack of detailed performance metrics makes value assessment difficult.
Sole awardee for this delivery order may limit competitive pressure.
Long contract duration requires ongoing monitoring for relevance and efficiency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $344.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. HIGH PERFORMANCE COMPUTING (HPC) CENTERS PROGRAM OF THE DOD HPC MODERNIZATION PROGRAM OFFICE (HPCMPO), UNDER THE U.S. ARMY ENGINEER RESEARCH AND DEVELOPMENT CENTER (ERDC) OVERSEES 5 DOD SUPERCOMPUTING RESEARCH CENTERS (DSRCS).

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 Army).

What is the total obligated amount?

The obligated amount is $344.5 million.

What is the period of performance?

Start: 2022-08-16. End: 2026-08-17.

What specific performance metrics are in place to ensure the HPC centers are delivering the required computational power and availability for DoD research?

The provided data does not detail specific performance metrics. Effective oversight would require clearly defined Service Level Agreements (SLAs) for uptime, processing speed, and user support. The Cost Plus Incentive Fee structure suggests performance incentives are tied to cost and potentially schedule, but explicit technical performance metrics are crucial for ensuring the value of the investment.

How does the Cost Plus Incentive Fee structure mitigate the risk of cost overruns while ensuring BAE Systems remains motivated to achieve performance goals?

The CPIF structure aims to align the contractor's profit with both cost control and performance achievement. The government sets target costs and profit, with incentives for the contractor to stay below target costs or exceed performance targets. However, robust government oversight is essential to prevent inflated costs and ensure the incentive structure effectively drives desired outcomes without compromising quality or scope.

What is the long-term strategy for HPC modernization within the DoD, and how does this contract align with future technological needs?

This contract supports the ongoing modernization of DoD's HPC capabilities through August 2026. The long-term strategy likely involves continuous upgrades and adaptation to emerging technologies like exascale computing and AI-driven workloads. This award ensures current operational needs are met while potentially setting the stage for future procurements as the DoD's computational requirements evolve.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912DY19R0171

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 520 GAITHER ROAD, 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: $785,561,147

Exercised Options: $549,034,018

Current Obligation: $344,489,365

Actual Outlays: $2,707,867

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $4,871,425

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0053

IDV Type: GWAC

Timeline