DoD's $134M Engineering Services Contract Awarded to BAE Systems for Naval Support
Contract Overview
Contract Amount: $134,316,756 ($134.3M)
Contractor: BAE Systems Technology Solutions & Services Inc.
Awarding Agency: Department of Defense
Start Date: 2016-08-29
End Date: 2020-09-03
Contract Duration: 1,466 days
Daily Burn Rate: $91.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::CT::IGF
Place of Performance
Location: SAINT INIGOES, SAINT MARYS County, MARYLAND, 20684
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $134.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IGF::CT::IGF Key points: 1. Contract value of $134.3M over 4 years indicates significant investment in engineering services. 2. Awarded under full and open competition, suggesting a robust market for these services. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 4. Performance period of 1466 days highlights the long-term nature of the support required. 5. The specific NAICS code (541330) points to a focus on specialized engineering expertise. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.
Value Assessment
Rating: fair
The contract's value of $134.3 million over approximately four years for engineering services is substantial. Benchmarking this against similar large-scale engineering support contracts for naval operations is difficult without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as contractor profit is guaranteed regardless of efficiency, potentially leading to higher overall costs compared to fixed-price contracts if not rigorously overseen. The fixed fee component, while providing some cost certainty for the contractor's profit, still allows for variable cost reimbursement.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that the Department of the Navy solicited bids from all responsible sources. While the number of bidders is not specified, this approach generally fosters a competitive environment, which can lead to better pricing and service offerings. The open competition suggests that the market has multiple capable providers for these engineering services, allowing the government to select the best value proposition.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the pool of potential offerors, increasing the likelihood of receiving competitive pricing and innovative solutions, thereby optimizing the use of public funds.
Public Impact
The primary beneficiaries are the Department of the Navy and its operational readiness, receiving critical engineering support. Services delivered likely encompass a range of engineering disciplines essential for naval systems and platforms. The geographic impact is centered around naval operations and potentially BAE Systems' facilities in Maryland. Workforce implications include employment opportunities for engineers and technical staff at BAE Systems and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can incentivize higher spending if not closely monitored.
- Lack of small business participation may limit broader economic impact and innovation.
- The long duration of the contract could lead to scope creep or evolving requirements that increase costs.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- BAE Systems is a large, established defense contractor with a track record in similar services.
- The contract addresses critical engineering needs for naval operations, supporting national security.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for design, development, testing, and sustainment of complex military systems. Spending in this sector is often characterized by long-term relationships, specialized expertise, and significant government investment. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the DoD to prime contractors.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. This means that opportunities for small businesses to directly participate as prime contractors were limited. While BAE Systems may engage small businesses as subcontractors, the absence of a formal set-aside or explicit subcontracting goals suggests that the primary focus was on securing the most capable large-scale provider through open competition.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable, and that the fixed fee is earned appropriately. Transparency is generally maintained through contract reporting mechanisms, though specific details of ongoing oversight activities are often internal to the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Naval Sea Systems Command (NAVSEA) Contracts
- Department of Defense Engineering Services
- BAE Systems Defense Contracts
- Cost-Plus-Fixed-Fee Contracts
- Engineering and Technical Services
Risk Flags
- Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
- Long contract duration may lead to outdated services or scope creep.
- Lack of small business participation noted.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, cost-plus-fixed-fee, full-and-open-competition, delivery-order, maryland, large-contract, professional-services, naval-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $134.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IGF::CT::IGF
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 $134.3 million.
What is the period of performance?
Start: 2016-08-29. End: 2020-09-03.
What is BAE Systems' track record with similar Cost Plus Fixed Fee (CPFF) contracts within the Department of Defense?
BAE Systems, as a major defense contractor, has a extensive history of performing on CPFF contracts across various branches of the Department of Defense. These contracts often involve complex research, development, and sustainment efforts where the final costs are difficult to predict upfront. While CPFF contracts offer flexibility, they also carry a higher risk of cost overruns if not managed with stringent oversight. BAE Systems' performance on such contracts would typically be evaluated based on their ability to manage costs within the 'cost' portion while achieving the project objectives, and their historical data would likely show a mix of successful outcomes and instances requiring close monitoring by the government to control expenditures and ensure value for money.
How does the $134.3 million contract value compare to typical engineering services spending for the Department of the Navy?
The $134.3 million contract value represents a significant, but not extraordinary, investment for the Department of the Navy, particularly for multi-year engineering support services. The Navy procures a vast array of services, and large-scale engineering contracts are common, especially for major platforms like ships and submarines, or for system-wide technical support. To provide a precise comparison, one would need to analyze historical spending data for similar NAICS codes (like 541330) and contract types (like CPFF) awarded by the Navy over comparable durations. However, this figure suggests a substantial commitment to acquiring specialized engineering expertise, likely for critical operational or developmental needs.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific engineering services award?
The primary risk with a CPFF contract for engineering services is the potential for cost escalation. While the 'fixed fee' provides a defined profit margin for BAE Systems, the 'cost plus' element means the government reimburses allowable costs incurred by the contractor. If cost controls are weak, or if project requirements expand without adequate adjustments to the fee structure, the total cost to the government can significantly exceed initial estimates. This necessitates robust government oversight to scrutinize incurred costs, ensure efficiency, and manage scope creep effectively. For engineering services, unforeseen technical challenges or evolving requirements are common, making diligent management crucial to mitigate financial risks.
What does the 'full and open competition' designation imply about the availability of qualified engineering service providers for the Navy?
The 'full and open competition' designation signifies that the Department of the Navy actively sought bids from all responsible sources capable of meeting the contract requirements. This implies that the market for the specific engineering services required is sufficiently robust, with multiple companies possessing the necessary expertise, resources, and security clearances. It suggests that the Navy did not encounter significant barriers to entry or limitations that would necessitate restricting the competition (e.g., through sole-sourcing or limited competition). This approach is generally favored as it maximizes the potential for competitive pricing and allows the government to select the offer that provides the best overall value, rather than being limited to a pre-selected few.
How might the long performance period (1466 days) impact the overall cost-effectiveness and relevance of the engineering services provided?
A long performance period of 1466 days (approximately 4 years) for engineering services can have mixed impacts on cost-effectiveness and relevance. On the positive side, it allows for continuity of support, deepens the contractor's understanding of the systems, and can reduce transition costs associated with frequent contract changes. This stability can lead to greater efficiency and potentially better long-term solutions. However, it also increases the risk of the services becoming outdated if technology or operational needs evolve rapidly. Furthermore, long-term CPFF contracts can be susceptible to cumulative cost increases over time if not managed with vigilant oversight and mechanisms for periodic review and adjustment. Ensuring the contract includes provisions for adapting to new technologies or requirements is key to maintaining relevance and cost-effectiveness.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N0002416R3418
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Compagnie DE Developpement DE L'eau S.A.
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: $136,253,125
Exercised Options: $136,253,125
Current Obligation: $134,316,756
Subaward Activity
Number of Subawards: 467
Total Subaward Amount: $45,644,211
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4018
IDV Type: IDC
Timeline
Start Date: 2016-08-29
Current End Date: 2020-09-03
Potential End Date: 2020-09-03 00:00:00
Last Modified: 2024-06-11
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