DOJ's $59.7M IT services contract to BAE Systems shows strong competition and long-term performance

Contract Overview

Contract Amount: $59,677,567 ($59.7M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Justice

Start Date: 2012-04-01

End Date: 2020-03-31

Contract Duration: 2,921 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NOC&TECHONE SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Justice obligated $59.7 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: NOC&TECHONE SERVICES Key points: 1. The contract demonstrates a commitment to leveraging established IT service providers for critical government functions. 2. A full and open competition suggests a healthy market with multiple capable vendors. 3. The firm-fixed-price structure incentivizes cost control and predictable spending. 4. The long duration of the contract indicates a need for sustained IT support. 5. Performance was managed under a "Services" type contract, suggesting a focus on outcomes. 6. The contract's value is substantial, reflecting significant IT needs within the Department of Justice.

Value Assessment

Rating: good

The total award of $59.7 million over approximately 8 years represents a significant investment in IT services. While specific per-unit cost data is not provided, the firm-fixed-price contract type generally offers good value by shifting risk to the contractor. Benchmarking against similar large-scale IT service contracts for federal agencies would be necessary for a more precise value assessment, but the duration and scope suggest a competitive pricing environment was likely achieved through the bidding process.

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 bids suggests a competitive landscape, though more bidders would typically indicate stronger price discovery. The agency's decision to use full and open competition is a positive sign for achieving fair market prices.

Taxpayer Impact: Taxpayers benefit from the potential for lower prices and better service quality due to the competitive nature of the award process.

Public Impact

The Department of Justice benefits from reliable and sustained IT services, crucial for its operational efficiency. Federal employees within the Offices, Boards and Divisions likely receive enhanced IT support, improving their productivity. The contract supports IT infrastructure and services across various functions within the DOJ. The workforce implications are primarily within the IT support sector, potentially involving specialized skills for BAE Systems' employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed carefully.
Reliance on a single contractor for a significant period may reduce flexibility in adopting new technologies.
The specific nature of 'Other Computer Related Services' can be broad, potentially leading to scope creep if not well-defined.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a robust market and potential for competitive pricing.
The contractor, BAE Systems, is a large and established entity with a significant federal contracting presence.
The contract's long performance period indicates a stable and ongoing need for these services.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on 'Other Computer Related Services'. The IT services market for the federal government is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Contracts of this magnitude are common for large federal departments like the DOJ, which require extensive IT support to manage sensitive data and complex operations. Comparable spending benchmarks would typically involve looking at other large IT service contracts awarded to major defense and civilian agencies.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like BAE Systems suggests that small businesses may participate as subcontractors, but their inclusion and the extent of their involvement are not detailed here. Further analysis would be needed to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Justice. The firm-fixed-price nature of the contract provides a degree of financial oversight by fixing costs. Transparency is generally facilitated through contract databases like FPDS, where award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Department of Justice IT Modernization Programs
Federal Civilian Agency IT Support Services
Information Technology Professional Services
Cloud Computing Services (potential future integration)
Cybersecurity Services (related support)

Risk Flags

Long contract duration may lead to technology obsolescence.
Potential for vendor lock-in.
Performance monitoring is critical due to FFP structure.
Scope definition needs to be robust to prevent creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $59.7 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. NOC&TECHONE SERVICES

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 Justice (Offices, Boards and Divisions).

What is the total obligated amount?

The obligated amount is $59.7 million.

What is the period of performance?

Start: 2012-04-01. End: 2020-03-31.

What is the track record of BAE Systems Technology Solutions & Services Inc. in delivering IT services to the federal government, particularly for the Department of Justice?

BAE Systems Technology Solutions & Services Inc. has a substantial history of federal contracting, including significant work within the Department of Justice and other civilian and defense agencies. Their portfolio often includes complex IT services, systems integration, and support functions. For the DOJ, contracts like this one indicate a long-standing relationship focused on providing essential IT infrastructure and operational support. While this specific contract highlights a large award, their broader track record demonstrates experience in managing large-scale, long-term IT engagements. Performance reviews and past performance evaluations from previous contracts would offer deeper insights into their reliability and effectiveness in meeting government requirements.

How does the $59.7 million award compare to other IT service contracts awarded by the Department of Justice or similar agencies?

The $59.7 million award to BAE Systems for IT services is a significant but not unusual figure for a large federal agency like the Department of Justice, especially considering the contract's duration of approximately eight years. Large federal IT service contracts often range from tens to hundreds of millions of dollars, depending on the scope, complexity, and duration. For instance, other major civilian agencies such as the Department of Homeland Security or the General Services Administration frequently award contracts in this value range for enterprise-wide IT support, system modernization, and managed services. The 'Other Computer Related Services' category (NAICS 541519) is broad, encompassing a wide array of IT support functions, making direct comparisons dependent on the specific services rendered.

What are the primary risks associated with a long-term (nearly 8-year) IT services contract of this magnitude?

The primary risks associated with a long-term IT services contract of this magnitude include technological obsolescence, potential for scope creep, vendor lock-in, and contractor performance degradation over time. Technology evolves rapidly, and an 8-year contract might see the initial technology become outdated, requiring costly upgrades or modifications. Scope creep can occur if requirements are not clearly defined or if the agency's needs change significantly without proper contract adjustments. Vendor lock-in is a risk where the agency becomes overly dependent on the incumbent contractor, making it difficult and expensive to switch providers. Finally, contractor performance can decline due to complacency or changes in their own resources and focus, necessitating robust oversight and performance management from the agency.

What does the 'firm fixed price' contract type imply about the government's cost control and risk management for this contract?

A 'firm fixed price' (FFP) contract type implies that the contractor, BAE Systems, bears the primary responsibility for all costs incurred to complete the work, and the government pays a set price regardless of the contractor's actual costs. This is highly advantageous for cost control from the government's perspective, as it provides budget certainty and predictability. It shifts the financial risk of cost overruns entirely to the contractor. For risk management, the government benefits from knowing the total expenditure upfront. However, this also means the contractor must accurately estimate costs, and if they underestimate, they may cut corners on quality or service to maintain profitability, which necessitates strong performance monitoring by the government.

How does the 'full and open competition' award mechanism impact the value received by taxpayers for this contract?

The 'full and open competition' award mechanism is designed to maximize value for taxpayers by encouraging the widest possible participation from qualified vendors. This process allows any responsible source to submit a bid, fostering a competitive environment where multiple companies vie for the contract. In theory, this competition drives down prices, encourages innovation, and leads to better quality services as contractors strive to offer the most compelling proposal. For taxpayers, this means the government is more likely to secure services at or near fair market value, avoiding the potentially higher costs associated with sole-source or limited competition awards. The presence of two bidders in this case, while not a large number, still indicates a level of competition that benefits the taxpayer.

What are the potential implications of this contract on the IT workforce, both within the government and for the contractor?

This contract has several implications for the IT workforce. For BAE Systems, it signifies a substantial workload and likely requires the allocation of skilled IT professionals, potentially including project managers, systems administrators, network engineers, cybersecurity specialists, and help desk support personnel. This can lead to job creation or stable employment for their existing workforce. For the Department of Justice, the reliance on an external contractor for these services means that the government's internal IT workforce may focus more on strategic planning, oversight, requirements definition, and high-level architecture, rather than day-to-day operational tasks. It could also mean fewer direct government IT hires for certain functions covered by the contract.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 520 GAITHER RD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $59,677,567

Exercised Options: $59,677,567

Current Obligation: $59,677,567

Actual Outlays: $7,019,356

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $13,730,735

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0045K

IDV Type: FSS

Timeline