DoD's $129M Engineering Services Contract for LSE with BAE Systems Raises Value Concerns
Contract Overview
Contract Amount: $129,437,634 ($129.4M)
Contractor: BAE Systems Technology Solutions & Services Inc.
Awarding Agency: Department of Defense
Start Date: 2008-09-01
End Date: 2014-07-31
Contract Duration: 2,159 days
Daily Burn Rate: $60.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: TECHNICAL SERVICES TO SUPPORT COMMUNICATIONS LIFETIME SUPPORT ENGINEERING (LSE)
Place of Performance
Location: SAINT INIGOES, SAINT MARYS County, MARYLAND, 20684
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $129.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: TECHNICAL SERVICES TO SUPPORT COMMUNICATIONS LIFETIME SUPPORT ENGINEERING (LSE) Key points: 1. Contract awarded via full and open competition, suggesting potential for competitive pricing. 2. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns. 3. Long contract duration (2159 days) may lead to scope creep and price escalation. 4. Lack of small business participation noted. 5. The 'Engineering Services' NAICS code is broad, making direct benchmarking difficult.
Value Assessment
Rating: questionable
The CPFF contract type, coupled with a long duration, presents a risk of costs exceeding initial estimates. Without specific performance metrics or comparable contract data, assessing the value for money is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically facilitates price discovery. However, the CPFF structure might mitigate some of the competitive pressure on costs.
Taxpayer Impact: The potential for cost overruns inherent in CPFF contracts could lead to higher taxpayer expenditure than a fixed-price arrangement.
Public Impact
Supports critical communications lifetime support engineering for the Department of the Navy. Long-term nature of the contract implies ongoing reliance on these services. Potential for cost overruns impacts overall defense budget allocation. Absence of small business involvement limits opportunities for smaller enterprises in this sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type
- Long contract duration
- No small business participation
Positive Signals
- Awarded under full and open competition
- Supports critical defense infrastructure
Sector Analysis
This contract falls under Engineering Services, a broad category. Spending in this sector can vary widely based on project complexity and duration. Benchmarking is difficult without more specific service details.
Small Business Impact
The contract data indicates no small business participation. This suggests that larger prime contractors are fulfilling the requirements, potentially missing opportunities to leverage specialized small business capabilities.
Oversight & Accountability
The CPFF contract type requires diligent oversight to manage costs and ensure performance aligns with the fixed fee. Regular reviews of expenditures and progress are crucial for accountability.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost overruns due to CPFF structure
- Potential for price escalation over the long contract term
- Limited flexibility to adopt new technologies
- Lack of small business participation
- Difficulty in benchmarking due to broad service category
Tags
engineering-services, department-of-defense, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $129.4 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. TECHNICAL SERVICES TO SUPPORT COMMUNICATIONS LIFETIME SUPPORT ENGINEERING (LSE)
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $129.4 million.
What is the period of performance?
Start: 2008-09-01. End: 2014-07-31.
What specific engineering services were provided under this contract, and how did their complexity justify the CPFF structure?
The contract supported 'Lifetime Support Engineering (LSE)' for communications. The complexity likely involved maintaining and upgrading intricate communication systems over an extended period. CPFF is often used for R&D or services where cost estimation is difficult due to evolving requirements or unforeseen technical challenges, aiming to cover all allowable costs plus a fixed fee.
How did the long contract duration impact the final cost and the government's ability to adapt to technological changes?
A long duration (2159 days) increases the risk of cost escalation due to inflation, potential scope creep, and the need for contract modifications. It also limits the government's flexibility to adopt newer technologies or switch providers if more cost-effective or advanced solutions emerge during the contract period.
Were there opportunities missed by not including small businesses, and could alternative contracting strategies have yielded better value?
Excluding small businesses may have limited access to innovative solutions or specialized expertise they offer. Exploring set-asides or subcontracting requirements could have fostered competition and potentially reduced costs. Evaluating fixed-price or performance-based contracts might have offered better value control.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N0002408R3215
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $135,385,362
Exercised Options: $135,385,362
Current Obligation: $129,437,634
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4018
IDV Type: IDC
Timeline
Start Date: 2008-09-01
Current End Date: 2014-07-31
Potential End Date: 2014-07-31 00:00:00
Last Modified: 2021-02-19
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