DoD's $78M VLS Engineering Contract Awarded to BAE Systems for TAS Design Agent Services

Contract Overview

Contract Amount: $78,265,946 ($78.3M)

Contractor: BAE Systems Land & Armaments L.P.

Awarding Agency: Department of Defense

Start Date: 2009-08-06

End Date: 2014-09-30

Contract Duration: 1,881 days

Daily Burn Rate: $41.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TAS::17 1804::TAS DESIGN AGENT SERVICES FOR THE MK 41 VERTICAL LAUNCHING SYSTEM (VLS)

Place of Performance

Location: MINNEAPOLIS, ANOKA County, MINNESOTA, 55421

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $78.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P. for work described as: TAS::17 1804::TAS DESIGN AGENT SERVICES FOR THE MK 41 VERTICAL LAUNCHING SYSTEM (VLS) Key points: 1. Contract awarded for critical engineering services related to the MK 41 Vertical Launching System (VLS). 2. BAE Systems Land & Armaments L.P. secured the contract, indicating a significant role in defense systems. 3. The contract duration of 1881 days suggests a long-term need for these specialized engineering services. 4. Awarded under 'Full and Open Competition After Exclusion of Sources,' suggesting a competitive process with specific justifications. 5. The Cost Plus Fixed Fee (CPFF) contract type implies that costs are reimbursed, plus a fixed fee for profit. 6. The contract's value of approximately $78.3 million highlights substantial investment in naval defense technology.

Value Assessment

Rating: good

The contract value of $78.3 million for engineering services over nearly five years appears reasonable given the specialized nature of the MK 41 Vertical Launching System (VLS). Benchmarking against similar complex defense system engineering contracts suggests that this level of investment is typical for maintaining and developing advanced naval weaponry. The CPFF structure, while requiring careful oversight, is common for R&D and complex engineering efforts where final costs can be uncertain.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This specific procurement method indicates that while the competition was intended to be open, certain sources were excluded, likely due to specific technical requirements, security clearances, or existing relationships with the system. The exact number of bidders is not specified, but the exclusion of sources suggests a more tailored competition than a purely open solicitation.

Taxpayer Impact: While the exclusion of sources might limit the breadth of competition, it ensures that the awarded contractor possesses the highly specialized knowledge required for the MK 41 VLS. This focused competition aims to secure the best technical solution, potentially leading to more effective and reliable defense systems for taxpayers.

Public Impact

The primary beneficiaries are the U.S. Navy and other naval forces utilizing the MK 41 VLS. Services delivered include design agent functions, crucial for the continued development, maintenance, and modernization of the VLS. The geographic impact is national, supporting naval readiness across deployed fleets. Workforce implications include employment for highly skilled engineers and technical specialists within BAE Systems and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts require diligent oversight to manage costs and ensure fair profit margins.
The 'Exclusion of Sources' in the competition warrants understanding the specific justifications to ensure fairness and optimal value.
Long-term contracts can sometimes lead to complacency if not actively managed and reviewed for performance.

Positive Signals

Award to a single, established contractor like BAE Systems suggests a high level of trust and proven capability for this critical system.
The significant investment indicates a commitment to maintaining and advancing a key naval defense capability.
The contract duration implies a stable, long-term partnership focused on system sustainment and evolution.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on naval weapons systems engineering. The MK 41 VLS is a cornerstone of modern naval surface combatants, enabling the launch of a wide array of missiles. The market for such specialized engineering services is concentrated among a few prime defense contractors with deep expertise in complex weapon systems. Spending in this area is driven by national security requirements and the need for technological superiority in naval warfare.

Small Business Impact

The contract was not specifically set aside for small businesses, and BAE Systems is a large defense contractor. There is no explicit information provided regarding subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether BAE Systems actively seeks small business partners for specialized components or services related to the VLS engineering.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the CPFF contract terms, requiring detailed reporting and justification of costs. Transparency is facilitated through contract databases and reporting requirements, though specific technical details of the engineering work may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

MK 41 Vertical Launching System (VLS) Sustainment
Naval Surface Warfare Systems Engineering
Defense Weapon System Development
Missile Launch System Technology

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires robust oversight.
Competition method ('Full and Open Competition After Exclusion of Sources') warrants understanding the specific exclusions.
Long contract duration (1881 days) necessitates ongoing performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.3 million to BAE SYSTEMS LAND & ARMAMENTS L.P.. TAS::17 1804::TAS DESIGN AGENT SERVICES FOR THE MK 41 VERTICAL LAUNCHING SYSTEM (VLS)

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS LAND & ARMAMENTS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $78.3 million.

What is the period of performance?

Start: 2009-08-06. End: 2014-09-30.

What is the historical spending trend for TAS Design Agent Services for the MK 41 VLS?

Analyzing historical spending for TAS Design Agent Services for the MK 41 VLS requires examining contract awards over multiple fiscal years. While this specific award totals approximately $78.3 million from 2009 to 2014, understanding the trend involves looking at prior and subsequent contracts for similar services. Typically, spending on critical defense systems like the VLS is influenced by fleet modernization programs, geopolitical events, and budget allocations. Consistent, long-term investment suggests ongoing reliance on the system and its associated engineering support. Fluctuations might indicate periods of major upgrades versus routine maintenance and sustainment. A comprehensive trend analysis would involve aggregating data from various contract vehicles and task orders issued to different contractors over an extended period to identify patterns of investment and potential shifts in program priorities.

How does the awarded amount compare to the estimated value or ceiling of the contract?

The provided data indicates an 'Award Amount' (a) of $78,265,946.45. Without specific information on the contract's estimated value or ceiling, a direct comparison is not possible. However, for Cost Plus Fixed Fee (CPFF) contracts, the award amount often represents the total obligated funds at the time of award or a significant portion of the total potential value. The fixed fee component is determined as a percentage of the estimated cost. If the $78.3 million represents the total obligated amount, it suggests that the government anticipated spending up to this figure for the defined scope of work. Further analysis would require accessing the contract's full details to ascertain the initial estimate and any subsequent modifications or ceiling adjustments.

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

Key Performance Indicators (KPIs) for a contract like the TAS Design Agent Services for the MK 41 VLS would typically focus on technical performance, schedule adherence, and cost control. Technical KPIs might include the successful completion of design modifications, the accuracy and timeliness of technical documentation, and the resolution of engineering issues. Schedule KPIs would measure the contractor's ability to meet project milestones and delivery dates for engineering deliverables. Cost KPIs would involve managing project expenses within the estimated cost base and ensuring the fixed fee is earned appropriately. Performance would also be assessed against quality standards, such as the number of design defects or the effectiveness of implemented solutions. These KPIs are crucial for ensuring the continued operational readiness and technological relevance of the MK 41 VLS.

What is the track record of BAE Systems Land & Armaments L.P. with similar defense engineering contracts?

BAE Systems Land & Armaments L.P. has a substantial track record in providing complex engineering, manufacturing, and support services for a wide range of defense systems, including naval platforms and weapon systems. They are a major defense contractor globally, involved in numerous large-scale programs for the U.S. Department of Defense and allied nations. Their experience often encompasses system design, integration, sustainment, and modernization. For naval systems, BAE Systems is known for its involvement in shipbuilding, combat systems, and ordnance. Their history with critical defense infrastructure suggests a strong capability to handle demanding engineering tasks, manage complex projects, and meet stringent performance requirements, making them a logical choice for specialized roles like the TAS Design Agent for the MK 41 VLS.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for this type of service?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract structure for engineering services like those provided to the MK 41 VLS is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a set profit margin. This can create less incentive for the contractor to aggressively control costs compared to fixed-price contracts, as their profit is not directly tied to cost savings. The government bears the risk of cost increases above the estimated cost. Effective oversight is therefore critical to scrutinize incurred costs, ensure they are reasonable and allocable, and prevent scope creep that could inflate the overall project expense. The 'Exclusion of Sources' aspect also adds a layer of risk if it inadvertently limits the pool of highly competitive and cost-conscious bidders.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002409R5394

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: 4800 E RIVER RD, MINNEAPOLIS, MN, 55421

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

Financial Breakdown

Contract Ceiling: $79,425,195

Exercised Options: $79,374,342

Current Obligation: $78,265,946

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline