DoD's $146M engineering services contract with BAE Systems awarded via full and open competition

Contract Overview

Contract Amount: $146,441,235 ($146.4M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2004-11-01

End Date: 2024-01-26

Contract Duration: 7,025 days

Daily Burn Rate: $20.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: FUNDING MODIFICATION

Place of Performance

Location: HAUPPAUGE, SUFFOLK County, NEW YORK, 11788

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $146.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: FUNDING MODIFICATION Key points: 1. Contract value represents a significant investment in engineering services for the Department of Defense. 2. The use of Cost Plus Award Fee (CPA) pricing structure suggests a focus on performance incentives. 3. A long contract duration of over 19 years indicates a sustained need for these services. 4. The contract was awarded through full and open competition, implying a robust bidding process. 5. The specific NAICS code (541330) points to a focus on engineering services. 6. The contract's primary performance location is New York, suggesting a regional concentration of work.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract details. The Cost Plus Award Fee (CPA) structure allows for flexibility but can lead to higher costs if award fees are consistently met. The long duration suggests a stable, albeit potentially escalating, cost over time. Further analysis would require understanding the specific services rendered and the award fee criteria.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple bidders were likely considered. This method generally promotes competitive pricing and allows the government to select the best value offering. The presence of multiple bidders suggests a healthy market for these engineering services.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it drives down prices through market forces and ensures a wider pool of qualified contractors is considered.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its complex operations. Services delivered likely include design, development, testing, and integration of defense systems. The primary geographic impact is in New York, where the contractor is located. The contract supports a workforce of engineers and technical specialists employed by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee structure can lead to cost overruns if not carefully managed and monitored.
The extended duration of the contract (over 19 years) raises concerns about potential price creep and the need for regular re-evaluation of market rates.
Lack of specific details on performance metrics makes it difficult to assess the true value for money and contractor performance.
The contract's significant value could indicate a critical dependency on this single contractor for essential services.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded favorable pricing.
The Cost Plus Award Fee structure incentivizes contractor performance, potentially leading to higher quality outcomes.
The long-term nature of the contract indicates a stable and reliable provision of essential engineering services.
BAE Systems is a well-established defense contractor, suggesting a track record of capability and experience.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense Industrial Base. The market for defense engineering services is substantial, driven by the continuous need for modernization and maintenance of military systems. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the DoD or other federal agencies for similar types of services.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on BAE Systems' subcontracting plan and the nature of the services required.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be tied to the terms of the Cost Plus Award Fee contract, including performance metrics and award fee criteria. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details may be sensitive.

Related Government Programs

Department of Defense Research and Development
Defense Logistics Agency Support Contracts
Naval Sea Systems Command Contracts
Air Force Materiel Command Contracts

Risk Flags

Long contract duration may lead to price escalation.
CPA structure requires robust oversight to manage costs.
Lack of detailed performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $146.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. FUNDING MODIFICATION

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 $146.4 million.

What is the period of performance?

Start: 2004-11-01. End: 2024-01-26.

What is the historical spending trend for this specific contract or similar engineering services contracts awarded to BAE Systems by the DoD?

Analyzing historical spending requires access to detailed contract modification data over the contract's lifespan. While the provided data shows a total value of $146,441,235.14 for this specific award/modification, it doesn't detail the spending trajectory over the 7025-day duration (approximately 19 years). To assess trends, one would need to examine annual spending, identify periods of significant increases or decreases, and correlate these with specific program milestones or changes in scope. Comparing this to other DoD engineering services contracts awarded to BAE Systems would reveal if this contract represents a typical or outlier level of investment for similar services.

How does the Cost Plus Award Fee (CPA) structure for this contract compare to industry standards for engineering services?

The CPA structure is common in defense contracting, particularly for complex services where performance outcomes are critical and can be objectively measured. It allows the government to reimburse allowable costs plus a fee that is adjusted based on performance against pre-defined criteria. Compared to fixed-price contracts, CPA offers more flexibility for the contractor to adapt to evolving requirements, while the award fee mechanism incentivizes exceeding performance expectations. However, it requires robust government oversight to ensure costs are reasonable and award fees are justified. Industry standards often involve detailed Statements of Work (SOWs) and clear metrics for evaluating performance to ensure fair and effective application of the CPA model.

What are the key performance indicators (KPIs) used to determine the award fee for BAE Systems on this contract?

The specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data. Typically, for engineering services contracts under a CPA structure, KPIs would relate to factors such as technical performance (e.g., meeting design specifications, system reliability), schedule adherence (e.g., on-time delivery of milestones), cost control (e.g., managing within projected budgets), and overall customer satisfaction. The government agency overseeing the contract would establish these metrics in the Statement of Work (SOW) or contract's Performance Work Statement (PWS). The effectiveness of the award fee mechanism hinges on the clarity, measurability, and relevance of these KPIs.

What is BAE Systems' track record with the Department of Defense, particularly in delivering engineering services?

BAE Systems is a major defense contractor with a long-standing relationship with the Department of Defense, involved in a wide array of programs across multiple military branches. Their track record in delivering engineering services is generally extensive, encompassing areas such as systems engineering, software development, integration, and lifecycle support for various platforms. While specific performance on individual contracts can vary, BAE Systems is recognized for its capabilities in complex defense projects. A comprehensive assessment would involve reviewing past performance evaluations, any significant contract disputes or awards, and the breadth of their engineering support across different DoD agencies and programs.

What is the potential risk associated with a single, long-duration contract of this magnitude for critical engineering services?

A single, long-duration contract of this magnitude carries several potential risks. Firstly, there's a risk of contractor lock-in, where the government becomes overly reliant on one provider, potentially reducing leverage for future negotiations and innovation. Secondly, the extended timeline increases the possibility of cost escalation due to inflation, scope creep, or unforeseen technical challenges that may not be fully captured by the initial pricing. Thirdly, if the contractor's performance falters or their financial stability is compromised, it could significantly disrupt critical defense operations. Finally, market dynamics can change over such a long period, potentially making alternative solutions more cost-effective or technologically superior, but the existing contract structure might hinder adoption.

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: N0002404R7046

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

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: $304,021,378

Exercised Options: $161,452,804

Current Obligation: $146,441,235

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