DoD awards $137M contract for simulation services to BAE Systems, extending through 2024

Contract Overview

Contract Amount: $13,722,952 ($13.7M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2006-02-23

End Date: 2024-01-26

Contract Duration: 6,546 days

Daily Burn Rate: $2.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 21

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200605!SS1903!1700!N61331!COASTAL SYSTEMS STATION DAHLGREN!N0017804D4018 !A!N! !Y!HR01 ! !20060223!20070223!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHONOLGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!54700!005!12!PANAMA CITY !BAY !FLORIDA !+000000080000!N!N!000000000000!R412!SIMULATION !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !5!B!M! !A!D!20090331!B! ! !A! !A!N!U!2!021!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! !1700!N61331!0001! !

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $13.7 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200605!SS1903!1700!N61331!COASTAL SYSTEMS STATION DAHLGREN!N0017804D4018 !A!N! !Y!HR01 ! !20060223!20070223!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHONOLGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!54700!005!12!PANAMA CITY !BAY … Key points: 1. Contract value of $137M suggests significant investment in simulation capabilities. 2. BAE Systems has a substantial presence in defense technology, indicating established expertise. 3. The contract's long duration implies a need for sustained, complex simulation support. 4. Performance context is limited, but the award suggests satisfactory past performance. 5. This contract falls within the broader defense sector's focus on advanced training and readiness. 6. The use of Cost Plus Fixed Fee pricing warrants scrutiny for potential cost overruns.

Value Assessment

Rating: fair

The contract value of $137M for simulation services appears substantial. Benchmarking against similar simulation contracts is difficult without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for complex R&D or services where costs are uncertain, carries inherent risks of cost escalation. The extended period of performance (original award in 2006, with modifications extending to 2024) suggests a long-term need, but also raises questions about initial cost estimations and ongoing value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. The specific number of bidders is not provided in the data, but full and open competition generally fosters a more competitive environment, which can lead to better pricing and innovation. The agency's choice of this procurement method suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best value through a wider range of offers and potentially lower prices.

Public Impact

The primary beneficiaries are likely U.S. Navy personnel who will utilize the simulation systems for training and mission rehearsal. The contract delivers simulation and training services, crucial for maintaining operational readiness and technological superiority. Geographic impact is centered around naval installations where these simulation systems are deployed, potentially including bases in Florida and other locations. Workforce implications include employment for engineers, technicians, and support staff at BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
The extended performance period raises questions about the initial cost realism and potential for scope creep.
Lack of specific performance metrics makes it difficult to assess the true value-for-money delivered.
Limited detail on competition dynamics (number of bidders) hinders a full assessment of price discovery.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
BAE Systems is a major defense contractor with a track record in complex systems integration.
The contract has been actively managed with modifications, indicating ongoing agency engagement.
The contract supports critical simulation and training needs for national defense.

Sector Analysis

This contract falls within the Defense sector, specifically supporting simulation and training capabilities. The market for defense simulation and training is substantial, driven by the need for realistic, cost-effective training solutions that reduce reliance on live exercises. Companies like BAE Systems are key players, offering advanced technological solutions. Comparable spending benchmarks would involve analyzing other large simulation and training contracts awarded by the DoD, often in the hundreds of millions of dollars, depending on the scope and technology involved.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or specific subcontracting goals. As a large prime contract awarded to a major defense corporation, the primary focus is likely on the prime contractor's capabilities. However, BAE Systems, like many large defense contractors, may utilize small businesses for specialized components or services, contributing to the broader small business ecosystem within the defense industrial base.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, including reporting requirements and performance standards. Transparency is facilitated through contract databases like FPDS, although detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Training Systems
Simulation and Modeling
Defense Readiness Programs
Advanced Combat Training
Aerospace Simulation Services
Military Technology Development

Risk Flags

Cost Plus Fixed Fee contract type requires close monitoring for cost control.
Extended performance period may indicate evolving requirements or potential for scope creep.
Limited public data on specific performance metrics hinders value assessment.
Contract modifications over a long period warrant review for justification and impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.7 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200605!SS1903!1700!N61331!COASTAL SYSTEMS STATION DAHLGREN!N0017804D4018 !A!N! !Y!HR01 ! !20060223!20070223!103933453!876861790!217304393!N!BAE SYSTEMS APPLIED TECHONOLGI!1601 RESEARCH BLVD !ROCKVILLE !MD!20850!54700!005!12!PANAMA CITY !BAY !FLORIDA !+000000080000!N!N!000000000000!R412!SIMULATION !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !5!B!M! !A!D!200

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 $13.7 million.

What is the period of performance?

Start: 2006-02-23. End: 2024-01-26.

What is the historical spending trend for this specific contract vehicle?

The data indicates an initial award in February 2006 with a value of $103,933,345.3. Over time, through various modifications, the contract's total obligated amount has increased to $137,229,520. The period of performance has been significantly extended, with the original end date of February 2007 being superseded by a new estimated completion date of January 26, 2024. This suggests a sustained need for the services and ongoing funding allocations, with incremental increases in obligated funds likely tied to task orders or contract modifications for evolving requirements.

How does the per-unit cost of BAE Systems' simulation services compare to industry benchmarks?

Determining a precise per-unit cost benchmark for this contract is challenging without specific details on the units of service provided (e.g., hours of simulation, number of training modules, specific system configurations). The contract type, Cost Plus Fixed Fee (CPFF), means that the 'cost' component can vary based on actual labor and material expenses incurred by BAE Systems, while the 'fee' is fixed. Benchmarking would require comparing the effective hourly rates or costs per simulation hour against similar contracts for comparable simulation technologies and complexity levels. Given the specialized nature of defense simulation, costs can vary widely, but the overall $137M value suggests a significant investment.

What are the key performance indicators (KPIs) used to evaluate BAE Systems' performance on this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, for simulation and training services contracts, typical KPIs often include factors such as system uptime and availability, simulation fidelity (accuracy and realism), training effectiveness (measured through trainee performance metrics), adherence to schedules, and user satisfaction. The agency likely monitors these aspects, and performance feedback would inform future contract decisions and award terms, although these specific metrics are not detailed in the summary data.

What is the track record of BAE Systems Applied Technology in delivering similar simulation services?

BAE Systems is a major global defense, aerospace, and security company with a significant track record in developing and integrating complex systems, including simulation and training solutions. While this specific contract data points to BAE Systems Applied Technology, the broader BAE Systems entity has extensive experience in areas like combat systems, electronic warfare, and platform integration, which often involve sophisticated simulation components. Their history suggests a capability to handle large, technologically advanced contracts, though specific performance details for this particular contract are not elaborated upon in the provided data.

What is the risk associated with the Cost Plus Fixed Fee (CPFF) contract type for this simulation requirement?

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks, primarily related to cost control. While the 'fee' is fixed, the 'cost' component is reimbursable, meaning the government pays for the contractor's allowable costs plus a predetermined profit (the fee). If the contractor's costs exceed initial estimates, the total contract value can increase significantly. This necessitates robust government oversight to ensure costs are reasonable, allocable, and necessary. For complex simulation projects where requirements might evolve or technical challenges arise, CPFF can be appropriate but requires diligent management to prevent cost overruns and ensure value for money.

How has the scope of work evolved since the initial contract award in 2006?

The data indicates the contract was initially awarded in 2006 with an end date of February 2007. However, the 'Estimated Completion Date' is listed as January 26, 2024, and the 'Total Obligated Amount' is $137,229,520, significantly higher than the initial award value implied by the 'Award Amount' field ($103,933,345.3). This substantial extension in performance period and increase in obligated funds strongly suggests that the scope of work has evolved considerably through contract modifications and task orders. These changes likely reflect updated requirements, technological advancements, or expanded use cases for the simulation services over the years.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 21

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

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

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0017804D4018

IDV Type: IDC

Timeline