DoD's $103.9M contract for engineering services to BAE Systems shows strong competition and fair pricing

Contract Overview

Contract Amount: $49,245,896 ($49.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2004-12-02

End Date: 2008-11-30

Contract Duration: 1,459 days

Daily Burn Rate: $33.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 30

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200507!050424!1700!N66604!NAVAL UNDERSEA WARFARE CENTER !N0017804D4018 !A!N! !Y!0005 ! !20041202!20090404!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHONOLGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTGOMERY !MARYLAND !+000010000000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !* !541330!E! !5!B!M! !A!C!20090404!B! ! !A! !A!N!U!2!030!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y!1724!N66604!0001! !

Place of Performance

Location: WEST PALM BEACH, PALM BEACH County, FLORIDA, 33416

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $49.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200507!050424!1700!N66604!NAVAL UNDERSEA WARFARE CENTER !N0017804D4018 !A!N! !Y!0005 ! !20041202!20090404!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHONOLGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONT… Key points: 1. The contract demonstrates a competitive procurement process with a single award, suggesting a robust bidding environment. 2. Pricing appears reasonable when benchmarked against similar engineering services contracts. 3. The contract's duration and value indicate a significant, long-term commitment by the Navy. 4. Performance risk appears managed through the Cost Plus Fixed Fee contract type. 5. This award positions BAE Systems as a key provider of specialized engineering services within the defense sector. 6. The contract's focus on engineering technical services aligns with critical naval warfare capabilities.

Value Assessment

Rating: good

The total award amount of $103.9 million for engineering technical services appears to be within a reasonable range when compared to similar contracts for specialized defense engineering. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for cost flexibility, necessitates careful oversight to ensure value. Benchmarking against industry standards for engineering services suggests that the pricing structure is competitive, especially given the specialized nature of the work required by the Naval Undersea Warfare Center.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The data suggests a single award was made, which could imply a highly competitive process where one offeror best met the government's requirements. The level of competition is a positive indicator for price discovery and ensuring the government receives the best value.

Taxpayer Impact: Full and open competition generally leads to more favorable pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The primary beneficiary is the Department of the Navy, specifically the Naval Undersea Warfare Center, which receives critical engineering and technical support. Services delivered include engineering and technical support essential for the development, maintenance, and advancement of undersea warfare systems. The geographic impact is primarily centered around the Naval Undersea Warfare Center's operations, likely in Florida, and the contractor's facilities in Rockville, Maryland. Workforce implications include employment opportunities for engineers, technicians, and support staff within BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not managed diligently.
Reliance on a single contractor for critical engineering services could pose a risk if performance falters.
The long-term nature of the contract requires ongoing monitoring to ensure continued alignment with evolving naval needs.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
BAE Systems is a well-established defense contractor with a track record in complex engineering projects.
The contract supports critical national security functions related to undersea warfare.

Sector Analysis

This contract falls within the broader defense engineering services sector, a significant segment of the federal contracting market. The Naval Undersea Warfare Center's focus on advanced technologies means this contract likely involves highly specialized engineering expertise. Comparable spending benchmarks in this niche often reflect the high cost of specialized labor and research and development required for cutting-edge defense systems. The market is characterized by a few large, established prime contractors capable of handling such complex requirements.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large prime contract awarded to BAE Systems, there may be opportunities for small businesses to participate as subcontractors, but this is not guaranteed by the contract's structure as presented. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Naval Undersea Warfare Center contracting officers and program managers. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Undersea Warfare Technology Development
Defense Engineering Services
Naval Research and Development Contracts
BAE Systems Defense Contracts

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Performance Dependency on Single Contractor
Long-Term Contract Management Needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200507!050424!1700!N66604!NAVAL UNDERSEA WARFARE CENTER !N0017804D4018 !A!N! !Y!0005 ! !20041202!20090404!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHONOLGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!67675!031!24!ROCKVILLE !MONTGOMERY !MARYLAND !+000010000000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !* !541330!E! !5!B!M! !A!C!200

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 Navy).

What is the total obligated amount?

The obligated amount is $49.2 million.

What is the period of performance?

Start: 2004-12-02. End: 2008-11-30.

What is BAE Systems' track record with similar engineering services contracts for the Department of Defense?

BAE Systems is a major defense contractor with extensive experience in providing engineering and technical services across various branches of the U.S. military. They have a history of performing complex, long-term contracts similar to this one, often involving specialized areas like naval systems, aerospace, and electronics. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a generally positive track record. However, like any large contractor, they may have faced past performance issues or disputes on specific projects, which would typically be documented in government performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS).

How does the $103.9 million total award compare to other engineering services contracts awarded by the Department of the Navy?

The $103.9 million total award for engineering technical services is a substantial but not extraordinary figure for a multi-year contract supporting a critical naval function like undersea warfare. The Department of the Navy awards numerous contracts in the hundreds of millions, and sometimes billions, for complex systems engineering, research, development, and sustainment. This particular contract's value places it in the mid-to-large tier for specialized engineering support. Its significance lies more in the critical nature of the services provided to the Naval Undersea Warfare Center rather than its absolute dollar value compared to the entirety of the Navy's procurement portfolio.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor receives a fixed fee, the government bears the risk of all allowable costs. If the contractor's costs exceed estimates, the government pays them, potentially leading to a higher final price than initially anticipated. This necessitates robust government oversight to ensure costs are reasonable, allocable, and allowable. Another risk is that the contractor might not be as incentivized to control costs as they would be under a fixed-price contract, although the fixed fee provides some incentive. Effective management and monitoring by the government are crucial to mitigate these risks.

How effective is the 'full and open competition' approach in ensuring value for this type of specialized engineering service?

The 'full and open competition' approach is generally considered highly effective for ensuring value, even for specialized services like those provided under this contract. It maximizes the pool of potential offerors, increasing the likelihood of receiving competitive bids and innovative solutions. For specialized engineering, this means the government can solicit proposals from a wide range of companies, potentially uncovering niche expertise or more cost-effective approaches. While the technical requirements might be stringent, allowing multiple qualified bidders to compete on both technical merit and price helps drive down costs and ensures the government selects the best overall value, not just the lowest price.

What is the historical spending trend for engineering technical services at the Naval Undersea Warfare Center?

Analyzing historical spending trends for engineering technical services at the Naval Undersea Warfare Center (NUWC) would require access to detailed historical contract data beyond this single award. However, it's reasonable to infer that NUWC, as a primary research, development, and acquisition center for undersea warfare, consistently requires significant engineering and technical support. Spending in this area is likely to be relatively stable, fluctuating based on specific program needs, technological advancements, and budget allocations. Trends might show an increase in spending related to areas like autonomous systems, cyber security for naval platforms, and advanced sensor technologies, reflecting evolving threats and capabilities.

What are the implications of awarding this contract to BAE Systems Applied Technologies Inc. versus other potential bidders?

Awarding this contract to BAE Systems Applied Technologies Inc. implies that, based on the evaluation criteria, they offered the best value to the government. This could be due to a combination of technical approach, past performance, key personnel, and price. BAE Systems, as a large defense contractor, brings significant resources, established processes, and deep domain knowledge in naval systems. This can lead to efficient execution and potentially lower risk. However, awarding to a large incumbent or well-resourced company might also mean less opportunity for smaller, more specialized firms to enter the market or gain a foothold on such critical programs.

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

Offers Received: 30

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4018

IDV Type: IDC

Timeline