DOJ's $73.8M IT services contract with BAE Systems saw 2 bids, raising questions on value and competition

Contract Overview

Contract Amount: $73,808,622 ($73.8M)

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: $25.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GENERAL INTEGRATION SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Justice obligated $73.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: GENERAL INTEGRATION SERVICES Key points: 1. The contract's value of $73.8 million over 8 years suggests a significant investment in IT services. 2. With only two bids received, the level of competition may have impacted pricing and value for money. 3. The fixed-price contract type aims to control costs, but the final price relative to performance needs scrutiny. 4. The 'Other Computer Related Services' NAICS code indicates a broad scope, potentially leading to cost overruns if not managed tightly. 5. The contract's duration of nearly 8 years necessitates ongoing performance monitoring to ensure continued value. 6. The absence of small business set-asides means opportunities for smaller IT firms were not prioritized. 7. The contract was awarded as a delivery order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

The contract's total value of $73.8 million over approximately 8 years averages to about $9.2 million annually. Benchmarking this against similar IT integration services contracts is challenging without more specific service details. However, the limited competition (2 bids) suggests that the pricing might not have been aggressively driven down by market forces. The firm-fixed-price nature provides some cost certainty, but the overall value for money depends heavily on the quality and efficiency of the services delivered by BAE Systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. However, only two bids were received. This limited number of bidders could indicate several factors, such as high barriers to entry for this type of service, a lack of market interest, or potentially a poorly advertised solicitation. The limited competition raises concerns about whether the government received the best possible pricing and innovative solutions.

Taxpayer Impact: With only two bidders, taxpayers may have paid a premium compared to a scenario with more robust competition. The government's negotiating power is diminished when faced with few viable options.

Public Impact

The Department of Justice (DOJ) benefits from integrated IT services, likely supporting its various operational and administrative functions. Services delivered are categorized under 'Other Computer Related Services,' implying a wide range of IT support, maintenance, and potentially development. The contract's performance is likely concentrated in Maryland, where the award notice indicates the contractor's location. The contract supports the IT workforce within BAE Systems and potentially indirectly within the DOJ through enhanced IT capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bids) may have led to suboptimal pricing.
The broad NAICS code (541519) could indicate scope creep risks if not managed effectively.
The long contract duration (nearly 8 years) increases the risk of technology obsolescence or changing requirements.
Lack of small business participation means fewer opportunities for smaller, potentially innovative IT firms.

Positive Signals

Firm-fixed-price contract type helps control costs and provides budget certainty.
Awarded under full and open competition, theoretically allowing for the best possible offer.
BAE Systems is a large, established defense and technology contractor with significant resources.

Sector Analysis

The IT services sector is highly competitive and rapidly evolving. Contracts for 'Other Computer Related Services' (NAICS 541519) encompass a wide array of IT support, including system integration, IT consulting, and custom software development. The federal government is a major consumer of these services, with significant spending across various agencies. This contract with the DOJ fits within the broader trend of federal agencies outsourcing complex IT functions to specialized contractors to maintain and upgrade their technological infrastructure.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb': false. The prime contractor, BAE Systems, is a large corporation. There is no explicit information regarding subcontracting plans for small businesses. This suggests that opportunities for small businesses to participate in this contract were likely limited, potentially missing out on the benefits of engaging smaller, agile IT firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's contracting officers and program managers. As a delivery order under a larger IDIQ, the specific oversight mechanisms might be detailed within the parent contract's terms. Transparency is facilitated by public contract databases, but detailed performance metrics and internal oversight processes are not publicly disclosed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Professional Services
IT Services
Computer Systems Design and Related Services
General IT Support Services
Department of Justice IT Contracts

Risk Flags

Limited Competition
Potential for Overpricing
Technology Obsolescence Risk
Broad Service Scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $73.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. GENERAL INTEGRATION 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 $73.8 million.

What is the period of performance?

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

What was the specific nature of the 'Other Computer Related Services' provided under this contract?

The NAICS code 541519, 'Other Computer Related Services,' is broad and can encompass a wide range of IT activities beyond standard software development or hardware maintenance. This typically includes IT consulting, system integration, IT project management, and potentially specialized services like data analytics support, cybersecurity consulting, or cloud migration assistance. Without access to the specific Statement of Work (SOW) for this contract, the precise services rendered remain undefined. However, given the contractor's profile and the agency (DOJ), it likely involved supporting complex IT systems crucial for law enforcement, administrative, or investigative functions.

How does the pricing of this contract compare to similar IT services contracts awarded by the DOJ or other federal agencies?

Direct price comparison is difficult without knowing the specific services rendered and their scope. However, the total contract value of $73.8 million over nearly 8 years ($9.2M/year average) for 'Other Computer Related Services' falls within a common range for large-scale IT support contracts. The key factor for value assessment is the number of bids received. With only two bids, the pricing may not reflect the most competitive market rates. A more thorough analysis would involve benchmarking the hourly rates or project costs against similar contracts awarded under more competitive conditions, adjusting for contract duration, scope, and contractor experience.

What are the potential risks associated with a contract of this duration (nearly 8 years) in the rapidly evolving IT sector?

Contracts spanning nearly eight years in the IT sector carry inherent risks. Technology evolves rapidly, meaning the systems and services procured at the beginning of the contract could be outdated by its end. This necessitates careful contract management, including provisions for technology refresh and adaptation. There's also a risk of vendor lock-in, where the agency becomes overly reliant on a single provider, potentially hindering the adoption of newer, more cost-effective solutions. Furthermore, the long duration increases the likelihood of requirement changes, which, if not managed through contract modifications, could lead to cost overruns or performance issues. Regular performance reviews and flexibility in the contract are crucial to mitigate these risks.

What does the limited competition (2 bids) suggest about the market for these specific IT services?

The receipt of only two bids for this 'full and open' competition suggests a potentially concentrated market or significant barriers to entry for this particular type of IT service. This could be due to the specialized nature of the required services, the high security clearances needed for DOJ work, the large contract size deterring smaller companies, or perhaps the specific requirements of the solicitation were highly tailored. It might also indicate that the solicitation was not widely known or that potential bidders did not find the opportunity sufficiently attractive. This limited competition reduces the government's leverage in price negotiations and may limit the range of innovative solutions available.

What is BAE Systems' track record with federal IT service contracts?

BAE Systems is a major global defense, aerospace, and security company with a substantial presence in the U.S. federal IT services market. They have a long history of performing complex IT integration, cybersecurity, and support services for various government agencies, including the Department of Defense and intelligence community. Their track record generally indicates experience with large-scale, mission-critical systems. However, like any large contractor, performance can vary by contract. Specific performance data for this DOJ contract would require deeper analysis of past performance evaluations and delivery orders issued under this award.

Were there any specific performance issues or concerns raised by the DOJ regarding BAE Systems during the contract period?

Information regarding specific performance issues or concerns is typically found in contract performance reports (CPARs) or through Inspector General reports, which are not fully detailed in the provided data. The data indicates the contract was active from April 2012 to March 2020. Without access to these detailed oversight documents, it's impossible to definitively state whether performance issues arose. However, the fact that the contract was completed and awarded as a delivery order suggests that, at a minimum, the services were deemed necessary and likely met baseline requirements, though not necessarily exceeding expectations or achieving optimal value due to the limited competition.

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: Compagnie DE Developpement DE L'eau S.A.

Address: 520 GAITHER RD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $73,808,622

Exercised Options: $73,808,622

Current Obligation: $73,808,622

Actual Outlays: $9,735,468

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $9,071,161

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0045K

IDV Type: FSS

Timeline