AEGIS TECHREP contract awarded to BAE SYSTEMS for over $211M, spanning 20+ years

Contract Overview

Contract Amount: $211,329,502 ($211.3M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2002-11-01

End Date: 2024-01-26

Contract Duration: 7,756 days

Daily Burn Rate: $27.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AEGIS TECHREP

Place of Performance

Location: HAUPPAUGE, SUFFOLK County, NEW YORK, 11788

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $211.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: AEGIS TECHREP Key points: 1. The contract's extended duration suggests a long-term need for specialized technical support. 2. The cost-plus-fixed-fee pricing structure may incentivize cost overruns if not closely monitored. 3. The significant value indicates a critical role in supporting defense operations. 4. The contract's performance period extends well into the future, requiring ongoing oversight. 5. The absence of small business set-asides warrants examination of subcontracting opportunities. 6. The sole awardee suggests a highly specialized service where competition may be limited.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its long duration and specialized nature. The total obligated amount of over $211 million spread across more than 20 years suggests an average annual spend of approximately $10 million. This figure needs to be compared against similar long-term technical support contracts within the Department of Defense to assess value for money. The cost-plus-fixed-fee (CPFF) contract type, while allowing flexibility, can lead to higher costs if not managed diligently, raising questions about cost efficiency over the contract's lifecycle.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the fact that only one delivery order was issued to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. suggests that either the initial competition was for a specific set of services that only one entity could provide, or that subsequent needs were met through modifications or follow-on contracts not detailed here. The presence of multiple bidders in the initial phase is positive for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions. However, the long-term nature and single awardee for this specific order warrant scrutiny to ensure sustained value.

Public Impact

The primary beneficiaries are likely Department of Defense entities relying on AEGIS technical expertise. Services delivered include critical engineering and technical support for defense systems. The geographic impact is likely national, supporting defense readiness across various locations. Workforce implications include the employment of highly skilled engineers and technical specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep due to the CPFF contract type over its extended duration.
Limited visibility into the competitive landscape beyond the initial award for this specific delivery order.
Lack of explicit small business participation noted in the provided data.

Positive Signals

Awarded through full and open competition, suggesting a robust initial vetting process.
Long-term contract indicates a sustained need and potential for stable support.
BAE Systems is a major defense contractor with a significant track record.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader defense industrial base. The market for specialized technical support services for complex defense systems like AEGIS is highly concentrated, with a few large prime contractors dominating. Spending in this category is substantial, driven by the continuous need for modernization, maintenance, and operational support of advanced military platforms. Comparable spending benchmarks would involve analyzing other long-term technical support contracts for major defense programs.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business. Further analysis would be needed to determine if BAE SYSTEMS has subcontracting plans in place to engage small businesses for portions of this work, which is crucial for fostering the small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA), which is listed as the 'sa' (servicing agency). Accountability measures would include performance reviews, milestone tracking, and financial audits, particularly given the CPFF structure. Transparency is generally maintained through contract databases like FPDS, though detailed performance metrics may be less public.

Related Government Programs

AEGIS Combat System
Defense Engineering Services
Naval Systems Support Contracts
Major Defense Acquisition Programs
Cost Plus Fixed Fee Contracts

Risk Flags

Long contract duration increases risk of technological obsolescence.
CPFF contract type requires diligent oversight to manage costs.
Lack of explicit small business participation requires further investigation.
Single awardee for this delivery order may indicate limited market competition for specific services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $211.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. AEGIS TECHREP

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $211.3 million.

What is the period of performance?

Start: 2002-11-01. End: 2024-01-26.

What is the historical spending trend for the AEGIS TECHREP contract over its lifespan?

The provided data indicates a total obligated amount of $211,329,502.05 for the AEGIS TECHREP contract, with an award date of November 1, 2002, and an expected end date of January 26, 2024. This suggests a contract duration of over 21 years. To understand the historical spending trend, one would need to examine the annual obligations and expenditures against the total obligated amount. A consistent pattern of high annual spending would indicate sustained demand and funding, while fluctuating spending might suggest periods of reduced activity or changes in program priorities. Without detailed annual obligation data, it's difficult to pinpoint specific trends, but the substantial total amount implies significant and consistent investment over the contract's life.

How does the pricing structure (Cost Plus Fixed Fee) compare to other similar long-term defense technical support contracts?

Cost Plus Fixed Fee (CPFF) contracts are common in defense for services where the scope of work is not precisely defined at the outset or is expected to evolve, such as research and development or complex technical support. Compared to fixed-price contracts, CPFF offers flexibility but carries a higher risk of cost overruns for the government, as the contractor is reimbursed for actual costs plus a fixed fee. Other similar long-term defense technical support contracts might utilize different pricing structures like Cost Plus Incentive Fee (CPIF), which adds performance incentives, or Firm-Fixed-Price (FFP) if the scope is very well-defined. The choice of CPFF for AEGIS TECHREP suggests that the government prioritized flexibility and contractor expertise over strict cost certainty, a trade-off common in long-duration, evolving technical support roles.

What are the key performance indicators (KPIs) used to evaluate BAE Systems' performance under this contract?

Specific Key Performance Indicators (KPIs) for the AEGIS TECHREP contract are not publicly detailed in the provided data. However, for a contract of this nature, typical KPIs would likely revolve around technical performance, schedule adherence, and cost control. For technical performance, metrics might include system uptime, accuracy of technical documentation, successful implementation of engineering changes, and responsiveness to technical issues. Schedule adherence would focus on meeting project milestones and delivery timelines for support services. Cost control KPIs would monitor the contractor's ability to manage costs within the estimated ceiling and achieve the fixed fee without excessive overruns. Regular performance reviews and reporting by the contracting officer's representative (COR) would assess these KPIs.

What is the potential impact of the contract's long duration on technological obsolescence or the need for future contract renegotiations?

The extended duration of the AEGIS TECHREP contract (over 20 years) presents a significant risk of technological obsolescence. Defense systems, particularly those involving electronics and software, evolve rapidly. Services required today might be based on technologies that are outdated by the contract's end. This necessitates proactive management, potentially including periodic reviews and modifications to ensure the services remain relevant and leverage current technologies. It also increases the likelihood of renegotiations or the need for new, more modern contracts as technology advances. The government must ensure that the contract's terms allow for adaptation or that a strategy is in place to transition to newer systems and support structures before obsolescence becomes a critical issue.

How does the number of bidders in the initial competition (if known) inform the level of competition and potential value for taxpayers?

The provided data indicates the contract was awarded under 'FULL AND OPEN COMPETITION' and notes 'no' (number of offers) as 3. This means at least three distinct entities submitted proposals for this contract. A higher number of bidders generally signifies a more competitive environment, which typically leads to better price discovery, more innovative solutions, and ultimately, better value for taxpayers. With three bidders, there was a reasonable level of competition, suggesting that BAE SYSTEMS' proposal was deemed the most advantageous based on the evaluation criteria. However, understanding the specific evaluation criteria (e.g., price, technical merit, past performance) is crucial to fully assess the value realized.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002402R7083

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $297,945,995

Exercised Options: $251,347,695

Current Obligation: $211,329,502

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002401D7014

IDV Type: IDC

Timeline