DoD's $59M R&D Contract with BAE Systems: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $59,064,537 ($59.1M)
Contractor: BAE Systems Information and Electronic Systems Integration Inc.
Awarding Agency: Department of Defense
Start Date: 2016-05-31
End Date: 2022-12-15
Contract Duration: 2,389 days
Daily Burn Rate: $24.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 23
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF VENICE
Place of Performance
Location: BURLINGTON, MIDDLESEX County, MASSACHUSETTS, 01803
Plain-Language Summary
Department of Defense obligated $59.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC. for work described as: IGF::OT::IGF VENICE Key points: 1. The contract awarded to BAE Systems for R&D in physical, engineering, and life sciences represents a significant investment. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The contract type (Cost Plus Fixed Fee) carries inherent risks of cost overruns. 4. The sector is Research and Development, a critical area for technological advancement.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee structure, while allowing flexibility for R&D, can lead to higher costs compared to fixed-price contracts. Benchmarking against similar R&D contracts is challenging due to unique project scopes.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which theoretically allows for the widest range of bidders and promotes price discovery. However, the effectiveness of this in achieving optimal pricing for complex R&D is not guaranteed.
Taxpayer Impact: Taxpayer funds are being utilized for advanced research and development, with the ultimate benefit depending on the successful outcomes of the R&D efforts.
Public Impact
Investment in advanced R&D can lead to technological breakthroughs with long-term national security benefits. The duration of the contract (2389 days) indicates a long-term commitment to the research project. The specific R&D focus within physical, engineering, and life sciences is crucial for understanding its broader impact.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type increases risk of cost escalation.
- Long contract duration may not adapt well to rapidly changing R&D landscapes.
- Lack of specific performance metrics makes assessing value difficult.
Positive Signals
- Awarded under full and open competition.
- Focus on critical R&D for national security.
- Experienced contractor (BAE Systems).
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. Spending in this area is vital for innovation and maintaining a technological edge, with benchmarks varying widely based on the specific research domain.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine if opportunities were missed for small business participation.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency, indicating oversight from a specialized DoD entity. However, the effectiveness of this oversight in controlling costs and ensuring value for a Cost Plus Fixed Fee R&D contract requires detailed review.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- Lack of specific performance metrics.
- Potential for cost overruns.
- Limited transparency on R&D outcomes.
Tags
research-and-development-in-the-physical, department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.1 million to BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION INC.. IGF::OT::IGF VENICE
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS INFORMATION AND ELECTRONIC SYSTEMS INTEGRATION 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 $59.1 million.
What is the period of performance?
Start: 2016-05-31. End: 2022-12-15.
What specific R&D objectives were achieved, and how do they align with the initial investment?
The primary objective is to assess the tangible outcomes of the $59 million investment in R&D. This involves evaluating whether the project met its technical milestones, produced viable prototypes or research findings, and contributed to the Department of Defense's strategic goals. Without detailed project reports, it's difficult to quantify the return on investment and determine if the funds were used effectively to advance the specified scientific and engineering fields.
What were the key risks associated with the Cost Plus Fixed Fee structure for this R&D project, and how were they mitigated?
The main risk of a Cost Plus Fixed Fee contract is the potential for cost overruns, as the contractor is reimbursed for all allowable costs plus a fixed fee. For R&D, this risk is amplified by the inherent uncertainties in research. Mitigation strategies would typically involve robust oversight, clear definition of allowable costs, and potentially incentive clauses tied to performance or cost savings. The effectiveness of these measures in this specific contract is not detailed.
How did the full and open competition process ensure the best value was obtained for this complex R&D effort?
Full and open competition aims to maximize the pool of potential offerors, fostering a competitive environment that should theoretically lead to better pricing and innovative solutions. For complex R&D, however, the 'best value' is not solely determined by price but also by technical merit and past performance. The success of this competition in securing the best value depends on the clarity of the solicitation, the evaluation criteria used, and the capabilities of the competing firms in addressing the specific R&D challenges.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 23
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC
Address: 600 DISTRICT AVE, BURLINGTON, MA, 01803
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $59,514,025
Exercised Options: $59,514,025
Current Obligation: $59,064,537
Actual Outlays: $1,892,729
Subaward Activity
Number of Subawards: 41
Total Subaward Amount: $6,084,473
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-05-31
Current End Date: 2022-12-15
Potential End Date: 2022-12-15 00:00:00
Last Modified: 2024-01-30
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