DoD awards $139M Engineering Services contract to BAE Systems, raising questions about competition and value
Contract Overview
Contract Amount: $139,288,179 ($139.3M)
Contractor: BAE Systems Technology Solutions & Services Inc.
Awarding Agency: Department of Defense
Start Date: 2006-12-05
End Date: 2009-12-31
Contract Duration: 1,122 days
Daily Burn Rate: $124.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES
Place of Performance
Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $139.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ENGINEERING SERVICES Key points: 1. Significant contract value of $139M awarded to a single vendor. 2. Lack of competition raises concerns about price discovery and potential overspending. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Engineering services are critical for defense operations, but oversight is key.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, coupled with a lack of competition, makes it difficult to assess value. Without competitive bids, it's hard to benchmark pricing against market rates for similar engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers compared to a competitively bid contract.
Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers than if the contract had been awarded through a competitive process.
Public Impact
Taxpayers may be paying more than necessary due to the lack of competition. The long duration and cost-plus nature of the contract could lead to escalating costs. Essential engineering services are being provided, but the procurement method warrants scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Essential service provided
- Experienced contractor
Sector Analysis
Engineering services are crucial for the Department of Defense, supporting design, development, and maintenance of complex systems. Spending in this sector can vary widely based on project scope and technological advancements.
Small Business Impact
The contract was awarded to BAE Systems Technology Solutions & Services Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The 'NOT COMPETED' status suggests potential issues with oversight or justification for avoiding competition. Further review of the contract file is needed to understand the rationale and ensure accountability.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited price discovery
- No small business participation evident
Tags
engineering-services, department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $139.3 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ENGINEERING SERVICES
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 $139.3 million.
What is the period of performance?
Start: 2006-12-05. End: 2009-12-31.
What was the justification for not competing this significant engineering services contract?
The justification for not competing this $139M contract is not provided in the data. Typically, sole-source awards require a detailed justification, such as the existence of only one responsible source or urgent and compelling needs. Without this information, it's impossible to assess if the government received fair value or if competition was improperly avoided.
What is the risk associated with a Cost Plus Fixed Fee contract for engineering services?
Cost Plus Fixed Fee (CPFF) contracts carry a risk of cost overruns because the contractor is reimbursed for all allowable costs plus a fixed fee. While the fee is fixed, the contractor has less incentive to control costs compared to fixed-price contracts. This can lead to higher overall spending, especially for complex engineering projects where costs can be difficult to predict accurately.
How effective is this contract in delivering necessary engineering services given the procurement method?
While the contract is likely effective in delivering the necessary engineering services, as indicated by its long duration and award to a known entity, the procurement method raises concerns about overall effectiveness from a taxpayer value perspective. The lack of competition means we cannot be certain that the services were obtained at the best possible price or that innovative solutions from other vendors were considered.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
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: BAE Systems PLC
Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 20850
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $675,730,393
Exercised Options: $446,620,189
Current Obligation: $139,288,179
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-12-05
Current End Date: 2009-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2022-04-02
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