BAE Systems awarded $50M for R&D in physical and engineering sciences, a sole-source contract

Contract Overview

Contract Amount: $50,056,403 ($50.1M)

Contractor: BAE Systems Information & Electronic Systems Integration Inc

Awarding Agency: Department of Defense

Start Date: 2017-04-28

End Date: 2021-07-31

Contract Duration: 1,555 days

Daily Burn Rate: $32.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF CAMBRIDGE PHASE 4 BAE

Place of Performance

Location: MERRIMACK, HILLSBOROUGH County, NEW HAMPSHIRE, 03054

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $50.1 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC for work described as: IGF::OT::IGF CAMBRIDGE PHASE 4 BAE Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Research and Development focus in physical, engineering, and life sciences (except biotech) indicates a specialized need. 3. Long contract duration of 1555 days suggests a complex, multi-phase project. 4. Contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not managed tightly. 5. No small business set-aside, indicating the primary contractor is likely a large entity. 6. Geographic location in New Hampshire may point to specific R&D facilities or workforce availability.

Value Assessment

Rating: fair

The contract's value of $50 million for R&D over approximately four years requires careful benchmarking against similar research efforts. Without specific deliverables or performance metrics, assessing value for money is challenging. The Cost Plus Fixed Fee structure, while common for R&D, carries inherent risks of cost escalation if oversight is insufficient. Comparing this to other sole-source R&D contracts in similar scientific domains would be necessary for a more definitive assessment of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means there was no direct price comparison through bidding, potentially leading to less favorable pricing for the government compared to a competitive scenario.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government relied on negotiation and oversight to ensure a fair price, which is less transparent than a bidding process.

Public Impact

The primary beneficiaries are likely the Department of Defense and its research initiatives, advancing technological capabilities. Services delivered fall under Research and Development in physical, engineering, and life sciences, contributing to innovation. The geographic impact is centered in New Hampshire, potentially supporting local high-tech employment and infrastructure. Workforce implications include specialized scientific and engineering roles required for advanced R&D projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure increases risk of cost overruns without stringent oversight.
Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of specific performance metrics in the provided data makes it difficult to assess R&D effectiveness.
Long contract duration could indicate scope creep or inefficient project management if not actively managed.

Positive Signals

Focus on specialized R&D suggests a critical need for advanced technological development within the DoD.
Contract awarded to a known entity (BAE Systems) implies a level of trust and established relationship.
The contract supports innovation in physical and engineering sciences, which can have long-term strategic benefits.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, aiming to develop next-generation technologies. The market for such specialized R&D is often dominated by a few large, technically proficient companies like BAE Systems. Benchmarking would involve comparing the $50 million award to other government R&D contracts in similar scientific domains, considering the specific nature of the research and the contractor's expertise.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). BAE Systems is a large defense contractor, suggesting this R&D effort requires significant resources and expertise typically found in larger firms. There is no explicit information on subcontracting plans for small businesses, but given the nature of large sole-source R&D contracts, subcontracting opportunities for specialized services might exist, though not as a primary objective of the set-aside program.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to monitor expenditures and prevent cost overruns. Transparency is limited due to the sole-source nature, but contract modifications, performance reports, and financial audits would be key accountability measures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
BAE Systems Government Contracts
Cost Plus Fixed Fee Contracts
Sole Source Defense Procurements
Physical and Engineering Sciences Research

Risk Flags

Sole-source award lacks competitive pricing pressure.
Cost Plus Fixed Fee structure carries risk of cost escalation.
Limited public information on specific R&D objectives.
No indication of small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.1 million to BAE SYSTEMS INFORMATION & ELECTRONIC SYSTEMS INTEGRATION INC. IGF::OT::IGF CAMBRIDGE PHASE 4 BAE

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS INFORMATION & 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 $50.1 million.

What is the period of performance?

Start: 2017-04-28. End: 2021-07-31.

What specific research objectives were outlined in the IGF CAMBRIDGE PHASE 4 contract awarded to BAE Systems?

The provided data identifies the contract as 'IGF::OT::IGF CAMBRIDGE PHASE 4 BAE' and categorizes its North American Industry Classification System (NAICS) code as 541712, which pertains to 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)'. However, the specific research objectives, deliverables, or technical scope are not detailed in the summary data. Typically, such R&D contracts would outline specific scientific problems to solve, technologies to develop, or experiments to conduct. Without access to the full contract statement of work (SOW), a precise understanding of the research objectives remains elusive. Further investigation would require accessing the contract document itself or related program documentation from the Department of Defense.

How does the $50 million contract value compare to typical R&D spending by the Department of Defense in similar fields?

The $50 million contract value for R&D in physical and engineering sciences is a significant but not extraordinary amount for the Department of Defense (DoD). The DoD invests billions annually in research and development across various scientific and engineering disciplines. To benchmark this specific contract, one would need to compare it against other sole-source or competed R&D contracts awarded by the DoD or its components (like DARPA, AFRL, ONR) for similar research areas (e.g., materials science, advanced manufacturing, propulsion systems, electronics). Factors such as the duration of the research (1555 days), the specific technological maturity targeted, and the contractor's unique capabilities would influence the 'typical' value. Without more granular data on comparable contracts, it's difficult to definitively state if $50 million represents high, low, or average spending for this type of R&D.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for this R&D project?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract structure for this R&D project is the potential for cost overruns. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is variable. If the research proves more complex or time-consuming than initially estimated, the total costs can escalate significantly. This places a burden on the government to meticulously track and audit contractor expenses to ensure they are reasonable, allocable, and allowable. Effective oversight and robust cost controls are crucial to mitigate the risk of the government paying more than necessary. The fixed fee itself is not subject to increase, but the overall contract value can grow substantially if costs rise.

Given the sole-source nature, what mechanisms were likely in place to ensure BAE Systems provided fair pricing?

Even in sole-source procurements, the government employs several mechanisms to ensure fair and reasonable pricing. For this $50 million contract, the contracting officer would have likely conducted a thorough price analysis. This could involve reviewing historical pricing data for similar work performed by the contractor or other entities, analyzing the contractor's cost estimates (including labor, materials, overhead), and potentially negotiating the fixed fee. The government may also request detailed cost breakdowns from BAE Systems. Regulations often require contracting officers to obtain sufficient cost or pricing data for contracts exceeding certain thresholds. Furthermore, the Defense Contract Audit Agency (DCAA) might be involved in auditing the contractor's cost proposals to verify their accuracy and allowability, ensuring that the government is not paying for unnecessary or excessive costs.

What is the significance of the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences) in the context of this contract?

The NAICS code 541712 signifies that the core purpose of this $50 million contract is to conduct research and development activities focused on scientific and technical advancements within the physical sciences (like physics, chemistry, materials science), engineering disciplines (such as mechanical, electrical, aerospace engineering), and life sciences, excluding biotechnology. This classification helps categorize the contract within the broader economy and government spending landscape. It indicates that the work likely involves experimentation, analysis, and innovation aimed at creating new knowledge or developing new or improved products, processes, or services. For the Department of Defense, R&D in these areas is crucial for maintaining technological superiority and developing advanced defense capabilities.

What does the contract award date (2017-04-28) and end date (2021-07-31) imply about the project's timeline and execution?

The contract was awarded on April 28, 2017, and had an estimated completion date of July 31, 2021. This gives a total duration of approximately 4 years and 3 months (or 1555 days as indicated). This extended timeline suggests that the research and development effort was substantial and likely involved multiple phases, complex methodologies, or the development of intricate technologies. A longer duration for R&D contracts is not uncommon, as scientific discovery and technological innovation often require iterative processes, testing, and refinement. The government's oversight would be critical throughout this period to ensure progress aligns with objectives and that costs remain controlled relative to the work accomplished.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 144 DANIEL WEBSTER HWY #24, MERRIMACK, NH, 03054

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

Financial Breakdown

Contract Ceiling: $53,578,589

Exercised Options: $53,578,589

Current Obligation: $50,056,403

Subaward Activity

Number of Subawards: 40

Total Subaward Amount: $8,307,100

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline